Prospectus
March
29,
2024
GOLDMAN
SACHS ENERGY INFRASTRUCTURE 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 THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED BY THE
FEDERAL DEPOSIT
INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE FUND
INVOLVES
INVESTMENT RISKS, AND YOU MAY LOSE MONEY IN THE
FUND. |
◼
Goldman Sachs
MLP Energy Infrastructure Fund
◼
Class A
Shares: GLPAX
◼
Class C
Shares: GLPCX
◼
Institutional
Shares: GMLPX
◼
Investor
Shares: GLPIX
◼
Class R
Shares: GLPRX
◼
Class R6
Shares: GLPSX
◼
Goldman Sachs
Energy Infrastructure Fund
◼
Class A
Shares: GLEAX
◼
Class C
Shares: GLECX
◼
Institutional
Shares: GLEPX
◼
Investor
Shares: GLEIX
◼
Class R
Shares: GLERX
◼
Class R6
Shares: GLESX
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Class
A |
Class
C |
Institutional |
Investor |
Class
R |
Class
R6 |
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Maximum
Sales Charge (Load) Imposed on Purchases (as a
percentage
of offering price) |
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Maximum
Deferred Sales Charge (Load) (as a percentage of the
lower
of original purchase price or sale proceeds)1
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Class
A |
Class
C |
Institutional |
Investor |
Class
R |
Class
R6 |
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Management
Fees |
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Distribution
and/or Service (12b-1) Fees |
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Other
Expenses |
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Service
Fees |
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All
Other Expenses |
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Deferred/Current
Income Tax Expenses2 |
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Total
Annual Fund Operating Expenses |
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1
2
|
|
1
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
A Shares |
$ |
$ |
$ |
$ |
|
Class
C Shares |
$ |
$ |
$ |
$ |
|
Institutional
Shares |
$ |
$ |
$ |
$ |
|
Investor
Shares |
$ |
$ |
$ |
$ |
|
Class
R Shares |
$ |
$ |
$ |
$ |
|
Class
R6 Shares |
$ |
$ |
$ |
$ |
|
|
$ |
$ |
$ |
$ |
|
|
|
|
2
|
|
3
4
5
|
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|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
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|
1
Year |
5
Years |
10
Years |
Inception
Date | |
|
Class
A Shares |
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|
|
|
|
Returns
Before Taxes |
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|
- |
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Returns
After Taxes on Distributions |
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|
- |
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|
Returns
After Taxes on Distributions and Sale of Fund Shares |
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|
- |
|
|
Class
C Shares |
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|
|
|
|
Returns
Before Taxes |
|
|
- |
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|
Institutional
Shares |
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|
|
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|
Returns
Before Taxes |
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|
|
|
|
Investor
Shares |
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|
|
|
|
Returns
Before Taxes |
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|
|
|
|
Class
R Shares |
|
|
|
|
|
Returns |
|
|
|
|
|
Class
R6 Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Alerian
MLP Index (Total Return, Unhedged, USD) (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: Kyri
Loupis, Managing Director, has managed the Fund since 2013; Matthew Cooper, Vice
President, has managed the Fund since 2014; and Christopher A. Schiesser, Vice
President, has managed the Fund since 2023.
|
Buying
and Selling Fund Shares |
The minimum
initial investment for Class A and Class C Shares is, generally, $1,000. The
minimum initial investment for Institutional Shares is, generally, $1,000,000
for individual or certain institutional investors, alone or in combination with
other assets under the management of the Investment Adviser and its affiliates.
There is no minimum for initial purchases of Investor, Class R and Class R6
Shares, except for certain institutional investors who purchase Class R6 Shares
directly with the Fund’s transfer agent for which the minimum initial investment
is $5,000,000. Those share classes with a minimum initial investment requirement
do not impose it on certain employee benefit plans, and Institutional Shares do
not impose it on certain investment advisers investing on behalf of other
accounts.
The minimum
subsequent investment for Class A and Class C shareholders is $50, except for
certain employee benefit plans, for which there is no minimum. There is no
minimum subsequent investment for Institutional, Investor, Class R or Class R6
shareholders.
You may
purchase and redeem (sell) shares of the Fund on any business day through
certain intermediaries that have a relationship with Goldman Sachs & Co. LLC
(“Goldman Sachs”), including banks, trust companies, brokers, registered
investment advisers and other financial institutions
(“Intermediaries”).
|
Tax
Information |
The Fund is
treated as a regular corporation, or “C” corporation, for U.S. federal, state
and local income tax purposes. The Fund will make distributions that will be
treated for U.S. federal income tax purposes as (i) first, taxable dividends to
the extent of your allocable share of the Fund’s earnings and profits, (ii)
second, non-taxable returns of capital to the extent of your tax basis in your
shares of the Fund (for the portion of those distributions that exceed the
Fund’s earnings and profits) and (iii) third, taxable gains (for the balance of
those distributions). Dividend income will be treated as “qualified dividends”
for federal income tax purposes, subject to favorable
7
capital
gain tax rates, provided that certain requirements are met. Unlike a regulated
investment company, the Fund will not be able to pass-through the character of
its recognized net capital gain by paying “capital gain dividends.” Although the
Fund expects that a significant portion of its distributions will be treated as
nontaxable return of capital and gains, combined, no assurance can be given in
this regard. Additionally, a sale of Fund shares is a taxable event for shares
held in a taxable account.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
If you
purchase the Fund through an Intermediary, the Fund and/or its related companies
may pay the Intermediary for the sale of Fund shares and related services. These
payments may create a conflict of interest by influencing the Intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your Intermediary’s website for more
information.
8
|
|
|
|
|
|
Class
A |
Class
C |
Institutional |
Investor |
Class
R |
Class
R6 |
|
Maximum
Sales Charge (Load) Imposed on Purchases (as a
percentage
of offering price) |
|
|
|
|
|
|
|
Maximum
Deferred Sales Charge (Load) (as a percentage of the
lower
of original purchase price or sale proceeds)1
|
|
|
|
|
|
|
|
|
Class
A |
Class
C |
Institutional |
Investor |
Class
R |
Class
R6 |
|
Management
Fees |
|
|
|
|
|
|
|
Distribution
and/or Service (12b-1) Fees |
|
|
|
|
|
|
|
Other
Expenses |
|
|
|
|
|
|
|
Service
Fees |
|
|
|
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|
All
Other Expenses |
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|
Acquired
Fund Fees and Expenses |
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Total
Annual Fund Operating Expenses |
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|
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|
Fee
Waiver and Expense Limitation2 |
( |
( |
( |
( |
( |
( |
|
Total
Annual Fund Operating Expenses After Fee Waiver and
Expense
Limitation |
|
|
|
|
|
|
1
2
|
|
9
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
A Shares |
$ |
$ |
$ |
$ |
|
Class
C Shares |
$ |
$ |
$ |
$ |
|
Institutional
Shares |
$ |
$ |
$ |
$ |
|
Investor
Shares |
$ |
$ |
$ |
$ |
|
Class
R Shares |
$ |
$ |
$ |
$ |
|
Class
R6 Shares |
$ |
$ |
$ |
$ |
|
|
$ |
$ |
$ |
$ |
|
|
|
|
10
|
|
11
12
|
|
13
|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
1
Year |
5
Years |
Since
Inception |
Inception
Date | |
|
Class
A Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Returns
After Taxes on Distributions |
|
|
|
|
|
Returns
After Taxes on Distributions and Sale of Fund Shares |
|
|
|
|
|
Class
C Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Institutional
Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Investor
Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Class
R Shares |
|
|
|
|
|
Returns |
|
|
|
|
|
Class
R6 Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Alerian
Midstream Energy Select Index (Total Return, Unhedged, USD) (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: Kyri
Loupis, Managing Director, has managed the Fund since 2017; Matthew Cooper, Vice
President, has managed the Fund since 2017; and Akif Irfan, Vice President, has
managed the Fund since 2023.
|
Buying
and Selling Fund Shares |
The minimum
initial investment for Class A and Class C Shares is, generally, $1,000. The
minimum initial investment for Institutional Shares is, generally, $1,000,000
for individual or certain institutional investors, alone or in combination with
other assets under the management of the Investment Adviser and its affiliates.
There is no minimum for initial purchases of Investor, Class R and Class R6
Shares, except for certain institutional investors who purchase Class R6 Shares
directly with the Fund’s transfer agent for which the minimum initial investment
is $5,000,000. Those share classes with a minimum initial investment requirement
do not impose it on certain employee benefit plans, and Institutional Shares do
not impose it on certain investment advisers investing on behalf of other
accounts.
14
The minimum
subsequent investment for Class A and Class C shareholders is $50, except for
certain employee benefit plans, for which there is no minimum. There is no
minimum subsequent investment for Institutional, Investor, Class R or Class R6
shareholders.
You may
purchase and redeem (sell) shares of the Fund on any business day through
certain intermediaries that have a relationship with Goldman Sachs & Co. LLC
(“Goldman Sachs”), including banks, trust companies, brokers, registered
investment advisers and other financial institutions
(“Intermediaries”).
|
Tax
Information |
The Fund’s
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 through
tax-deferred arrangements may become taxable upon withdrawal from such
arrangements.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
If you
purchase the Fund through an Intermediary, the Fund and/or its related companies
may pay the Intermediary for the sale of Fund shares and related services. These
payments may create a conflict of interest by influencing the Intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your Intermediary’s website for more
information.
15
Investment
Management Approach
|
INVESTMENT
OBJECTIVE |
The Goldman
Sachs MLP Energy Infrastructure Fund and Goldman Sachs Energy Infrastructure
Fund each seek total return through current income and capital appreciation. The
Funds’ investment objectives may be changed without shareholder approval upon 60
days’ notice.
|
PRINCIPAL
INVESTMENT STRATEGIES |
Goldman Sachs MLP
Energy Infrastructure Fund
The Fund
invests, under normal circumstances, at least 80% of its Net Assets in U.S. and
non-U.S. equity or fixed income securities issued by energy infrastructure
companies, including MLPs and C-Corps. The Fund’s investments in MLPs will
consist of at least 25% of the Fund’s total assets as measured at the time of
purchase. The Fund intends to concentrate its investments in the energy sector.
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.
For
purposes of the Fund’s 80% policy discussed above, the Fund’s investments in
energy infrastructure companies include U.S. and non-U.S. issuers that: (i) are
classified by a third party as operating within the oil and gas storage and
transportation subindustries; (ii) are part of the Fund’s stated benchmark; or
(iii) have at least 50% of their assets, income, sales or profits committed to,
or derived from, traditional or alternative midstream (energy infrastructure)
businesses, which include businesses that are engaged in the treatment,
gathering, compression, processing, transportation, transmission, fractionation,
storage, terminalling, wholesale marketing, liquefaction/regasification of
natural gas, natural gas liquids, crude oil, refined products or other energy
sources as well as businesses engaged in owning, storing and transporting
alternative energy sources, such as renewables (wind, solar, hydrogen,
geothermal, biomass) and alternative fuels (ethanol, hydrogen,
biodiesel).
The Fund’s
MLP investments may include MLPs structured as LPs or LLCs; MLPs that are taxed
as C-Corps; I-Units issued by MLP affiliates; PIPEs issued by MLPs; and other
U.S. and non-U.S. equity and fixed income securities and derivative instruments,
including pooled investment vehicles and ETNs that provide exposure to
MLPs.
MLPs formed
as LPs or LLCs are generally treated as partnerships for U.S. federal income tax
purposes. To be treated as a partnership for U.S. federal income tax purposes,
an MLP must derive at least 90% of its gross income for each taxable year from
qualifying sources, including activities such as the exploration, development,
mining, production, processing, refining, transportation, storage and certain
marketing of mineral or natural resources. MLPs are generally publicly traded,
are regulated by the SEC and must make public filings like any publicly traded
corporation.
The Fund
may also invest up to 20% of its Net Assets in non-energy infrastructure
investments, including equity and fixed income securities of U.S. and non-U.S.
companies. Such investments may include issuers in the upstream and downstream
sectors of the energy value chain. Upstream energy companies are primarily
engaged in the exploration, recovery, development and production of crude oil,
natural gas and natural gas liquids. Downstream energy companies are primarily
engaged in the refining and retail distribution of natural gas liquids and crude
oil.
The Fund’s
investments may be of any credit quality, duration or capitalization size. The
Fund may also invest in derivatives, including options, futures, forwards,
swaps, options on swaps, structured securities and other derivative instruments.
While the Fund may invest in derivatives for hedging purposes, the Fund
generally does not intend to hedge its exposures. The Fund’s investments in
derivatives, pooled investment vehicles, and other investments are counted
towards the Fund’s 80% policy to the extent they have economic characteristics
similar to the investments included within that policy. The Fund may also invest
in privately held companies and companies that only recently began to trade
publicly. The Fund may invest in stock, warrants and other securities of special
purpose acquisition companies (“SPACs”).
The
Fund is treated as a regular corporation, or “C” corporation, for U.S. federal
income tax purposes. Accordingly, unlike traditional open-end mutual funds, the
Fund is subject to U.S. federal income tax on its taxable income at the rates
applicable to corporations (at a rate of 21%) as well as state and local income
taxes.
THE FUND IS NON-DIVERSIFIED
UNDER THE INVESTMENT COMPANY ACT, AND MAY INVEST A LARGER PERCENTAGE OF ITS
ASSETS IN FEWER ISSUERS THAN DIVERSIFIED MUTUAL FUNDS.
The Fund’s
benchmark index is the Alerian MLP Index (Total Return, Unhedged, USD). The
Alerian MLP Index (Total Return, Unhedged, USD) is the leading gauge of energy
infrastructure MLPs and is a capped, float-adjusted, capitalization-weighted
index, whose constituents earn the majority of their cash flow from midstream
activities involving energy commodities.
16
Investment
Management Approach
Goldman Sachs Energy
Infrastructure Fund
The Fund
invests, under normal circumstances, at least 80% of Net Assets in U.S. and
non-U.S. equity or fixed income securities issued by energy infrastructure
companies, including MLPs and C-Corps. The Fund’s investments in MLPs will not
exceed 25% of the Fund’s total assets as measured at the time of purchase. The
Fund intends to concentrate its investments in the energy sector. 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.
For
purposes of the Fund’s 80% policy discussed above, the Fund’s investments in
energy infrastructure companies include U.S. and non-U.S. issuers that: (i) are
classified by a third party as operating within the oil and gas storage and
transportation subindustries; (ii) are part of the Fund’s stated benchmark; or
(iii) have at least 50% of their assets, income, sales or profits committed to,
or derived from, traditional or alternative midstream (energy infrastructure)
businesses, which include businesses that are engaged in the treatment,
gathering, compression, processing, transportation, transmission, fractionation,
storage, terminalling, wholesale marketing, liquefaction/regasification of
natural gas, natural gas liquids, crude oil, refined products or other energy
sources as well as businesses engaged in owning, storing and transporting
alternative energy sources, such as renewables (wind, solar, hydrogen,
geothermal, biomass) and alternative fuels (ethanol, hydrogen,
biodiesel).
The Fund’s
MLP investments may include MLPs structured as LPs or LLCs; MLPs that are taxed
as C-Corps; I-Units issued by MLP affiliates; PIPEs issued by MLPs; and other
U.S. and non-U.S. equity and fixed income securities and derivative instruments,
including pooled investment vehicles and ETNs that provide exposure to
MLPs.
The Fund
may also invest up to 20% of its Net Assets in non-energy infrastructure
investments, including equity and fixed income securities of U.S. and non-U.S.
companies. Such investments may include issuers in the upstream and downstream
sectors of the energy value chain. Upstream energy companies are primarily
engaged in the exploration, recovery, development and production of crude oil,
natural gas and natural gas liquids. Downstream energy companies are primarily
engaged in the refining and retail distribution of natural gas liquids and crude
oil.
The Fund’s
investments may be of any credit quality, duration or capitalization size. The
Fund may also invest in derivatives, including options, futures, forwards,
swaps, options on swaps, structured securities and other derivative instruments.
While the Fund may invest in derivatives for hedging purposes, the Fund
generally does not intend to hedge its exposures. The Fund’s investments in
derivatives, pooled investment vehicles, and other investments are counted
towards the Fund’s 80% policy to the extent they have economic characteristics
similar to the investments included within that policy. The Fund may also invest
in privately held companies and companies that only recently began to trade
publicly. The Fund may invest in stock, warrants and other securities of
SPACs.
THE FUND IS
NON-DIVERSIFIED UNDER THE INVESTMENT COMPANY, AND MAY INVEST A LARGER PERCENTAGE
OF ITS ASSETS IN FEWER ISSUERS THAN DIVERSIFIED MUTUAL FUNDS.
The Fund’s
benchmark index is the Alerian Midstream Energy Select Index (Total Return,
Unhedged, USD). The Alerian Midstream Energy Select Index (Total Return,
Unhedged, USD) is a composite of North American energy infrastructure companies
and is a capped, float-adjusted, capitalization-weighted index, whose
constituents are engaged in midstream activities involving energy
commodities.
ALL FUNDS
The Funds
may, from time to time, take temporary defensive positions that are inconsistent
with the Funds’ principal investment strategies in attempting to respond to
adverse market, political or other conditions. For temporary defensive purposes,
each Fund may invest up to 100% of its total assets in securities issued or
guaranteed by the U.S. government, its agencies, instrumentalities or sponsored
enterprises (“U.S. Government Securities”), commercial paper rated at least A-2
by S&P Global Ratings (“Standard & Poor’s”), P-2 by Moody’s Investors
Service, Inc. (“Moody’s”) or having a comparable credit rating by another
nationally recognized statistical rating organization (“NRSRO”) (or if unrated,
determined by the Investment Adviser to be of comparable credit quality),
certificates of deposit, bankers’ acceptances, repurchase agreements,
non-convertible preferred stocks and non-convertible corporate bonds with a
remaining maturity of less than one year, ETFs and other investment companies
and cash items. When
a Fund’s assets are invested in such instruments, the Fund may not be achieving
its investment objective.
References
in the Prospectus to a Fund’s benchmark are for informational purposes only, and
unless otherwise noted are not an indication of how a particular Fund is
managed.
Investment
Philosophy
Evaluate Overall
Energy Trends
The Goldman
Sachs Energy & Infrastructure Team examines the capital spending patterns of
the upstream oil and gas industry to identify areas with growing oil and gas
production and to identify those areas that are out of favor. Through this
process, the team aims to understand potential shifts in regional supply and
demand balances. In particular, the team monitors supply and demand trends
17
across
multiple commodities, including crude oil, refined products, natural gas,
natural gas liquids, and coal, identifying short-term and long-term trends and
potential impacts across the entire energy value chain. The upstream oil and gas
industry encompasses exploration, recovery, development and production of crude
oil, natural gas and natural gas liquids. This may include searching for
potential underground or underwater oil and gas fields, drilling of exploratory
wells, and operation of wells that recover and bring the crude oil and/or raw
natural gas to the surface.
Establish
Implications for Energy Infrastructure
Having
identified supply and demand trends, the team then assesses the implications of
these trends across the energy value chain for the purposes of:
◼
Product
or Commodity Exposure Selection
Depending upon which product or commodity the upstream oil and gas industry is directing the majority of its investment dollars towards, the team determines the sub-sectors in the midstream oil and gas industry.
Depending upon which product or commodity the upstream oil and gas industry is directing the majority of its investment dollars towards, the team determines the sub-sectors in the midstream oil and gas industry.
◼
Functional
Exposure Selection
Even for a given commodity, different parts of the infrastructure value chain experience varying demand over time. For instance, in the early stages of development of oil and gas fields, “gathering” infrastructure is most in demand. As development accelerates, other parts of the infrastructure value chain such as “long-haul pipelines” and “storage” infrastructure experience greater demand. Understanding the development cycle enables the team to focus on assets with the appropriate functional exposure.
Even for a given commodity, different parts of the infrastructure value chain experience varying demand over time. For instance, in the early stages of development of oil and gas fields, “gathering” infrastructure is most in demand. As development accelerates, other parts of the infrastructure value chain such as “long-haul pipelines” and “storage” infrastructure experience greater demand. Understanding the development cycle enables the team to focus on assets with the appropriate functional exposure.
◼
Regional
Exposure Selection
Identifying areas experiencing production growth and regions that are out favor helps the team:
— Determine which regions are more likely to demonstrate increased demand for energy infrastructure
— Identify regions with redundant infrastructure that may eventually manifest in lower cash flows due to the shifts in supply and demand balances
Identifying areas experiencing production growth and regions that are out favor helps the team:
— Determine which regions are more likely to demonstrate increased demand for energy infrastructure
— Identify regions with redundant infrastructure that may eventually manifest in lower cash flows due to the shifts in supply and demand balances
Identify Specific
Companies for Investment
Having
established an understanding of how supply and demand patterns could shift over
time and their implications for energy infrastructure, the team undertakes
detailed bottom-up analysis of individual companies with exposure to the trends
identified. This process helps identify companies with potential for
above-average distribution growth over multiple years and also helps isolate
potential trouble spots. Specifically, the team:
◼
Creates and
maintains proprietary financial models on companies within the investment
universe and develops independent income and cash flow estimates which are then
used to benchmark companies’ actual results
◼
Spends
considerable time engaging in dialogue with management teams to gain a better
understanding of companies’ strategic direction, attitude towards capital
stewardship, and other aspects such as propensity for acquisitions,
etc.
◼
Employs
multiple valuation methodologies including discounted cash flow analysis,
yield-based valuation, and other cash flow-based metrics to estimate fair value
of target companies
◼
Monitors
the health of target companies’ balance sheets, availability of liquidity,
access to debt and equity markets, and other similar factors
Buy/Sell
Discipline
The team
believes in balancing growth with other important attributes, including
reliability of current distributions, credit ratings and leverage and considers
those factors when evaluating potential investments.
Similarly,
deterioration in growth prospects, falling distribution coverage, limited
liquidity in the face of increasing capital expenditure commitments, and rising
leverage are examples of signals that the team relies on in deciding whether or
not to sell a position.
|
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.
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 |
Note that
the “Best Quarter” and “Worst Quarter” figures shown in the “Performance”
section of a Fund’s Summary section are applicable only to the time period
covered by the bar chart.
18
Investment
Management Approach
These
definitions apply to the after-tax returns shown in the “Performance” section of
a Fund’s Summary section.
Average
Annual Total Returns Before Taxes. These
returns do not reflect taxes on distributions on a Fund’s Class A 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
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 and Investment Management Approach—Principal
Investment Strategies sections 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. 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, each Fund publishes on its
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.
19
|
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 |
MLP
Energy
Infrastructure
Fund |
Energy
Infrastructure
Fund |
|
Investment
Practices |
|
|
|
Borrowings |
33 1∕3 |
33 1∕3 |
|
Credit,
Equity, Index, Interest Rate and Total Return Swaps and Options on
Swaps |
• |
• |
|
Custodial
Receipts and Trust Certificates |
• |
• |
|
Futures
Contracts and Options and Swaps on Futures Contracts |
• |
• |
|
Illiquid
Investments* |
15 |
15 |
|
Interest
Rate Caps, Floors and Collars |
• |
• |
|
Investment
Company Securities (including ETFs)1
|
10 |
10 |
|
Mortgage
Dollar Rolls |
• |
• |
|
Options2
|
• |
• |
|
Preferred
Stock, Warrants and Stock Purchase Rights |
• |
• |
|
Repurchase
Agreements |
• |
• |
|
Securities
Lending3
|
|
33 1∕3 |
|
Short
Sales Against the Box |
25 |
25 |
|
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
investments.
1
This
percentage limitation does not apply to the Funds’ investments in investment
companies (including ETFs) where a higher percentage limitation is permitted
under the Investment Company Act or rules, regulations or exemptive relief
thereunder.
2
Each
Fund may sell call and put options and purchase call and put options on
securities and securities indices in which it may invest.
3
The
Energy Infrastructure Fund may engage in securities lending.
20
Investment
Management Approach
|
10 Percent
of total assets (including securities lending collateral) (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 |
MLP
Energy
Infrastructure
Fund |
Energy
Infrastructure
Fund |
|
Investment
Securities |
|
|
|
Bank
Obligations1
|
• |
• |
|
Commodity-Linked
Derivatives Instruments |
• |
• |
|
Convertible
Securities |
• |
• |
|
Corporate
Debt Obligations |
• |
• |
|
Depository
Receipts |
• |
• |
|
Derivatives |
• |
• |
|
Emerging
Country Securities |
• |
• |
|
Equity
Investments |
• |
• |
|
Fixed
Income Securities |
• |
• |
|
Foreign
Securities |
• |
• |
|
Master
Limited Partnerships (“MLPs”) Investments |
• |
25 |
|
Non-Investment
Grade Fixed Income Securities2 |
• |
• |
|
Pre-IPO
Investments (including late-stage private equity
securities) |
• |
• |
|
Private
Investment in Public Equities (“PIPEs”) |
• |
• |
|
Real
Estate Investment Trusts (“REITs”) |
• |
• |
|
Special
Purpose Acquisition Companies (“SPACs”) |
• |
• |
|
Structured
Securities (which may include equity linked notes)3 |
• |
• |
|
Swaps
and Options on Swaps |
• |
• |
|
Temporary
Investments |
• |
• |
|
U.S.
Government Securities |
• |
• |
1
The
Funds may invest in bank obligations issued by U.S. or foreign
banks.
2
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.
3
Structured
securities are not subject to the same minimum credit quality requirements as
the Fund’s investments in fixed income securities.
21
Risks of
the Funds
Loss of
money is a risk of investing in the Fund (which, for the remainder of this
Prospectus, refers to one or more of the Funds offered in this Prospectus). An
investment in the Fund is not a bank deposit and is not insured or guaranteed by
the FDIC or any other governmental agency. The principal risks of the Fund are
discussed in the Summary section of the Prospectus. The following section
provides additional information on the risks that apply to the Fund, which may
result in a loss of your investment. The risks applicable to the Fund are
presented below in alphabetical order, and not in the order of importance or
potential exposure. The Fund should not be relied upon as a complete investment
program. There can be no assurance that the Fund will achieve its investment
objective.
|
✓ Principal
Risk
• Additional
Risk |
MLP
Energy
Infrastructure
Fund |
Energy
Infrastructure
Fund |
|
Commodity
Sector |
• |
• |
|
Credit/Default |
✓ |
✓ |
|
Cybersecurity |
• |
• |
|
Derivatives |
✓ |
✓ |
|
Dividend-Paying
Investments |
✓ |
✓ |
|
Emerging
Countries |
• |
• |
|
Energy
Sector |
✓ |
✓ |
|
Foreign |
✓ |
✓ |
|
Infrastructure
Company |
✓ |
✓ |
|
Initial
Public Offering (“IPO”) |
• |
• |
|
Interest
Rate |
✓ |
✓ |
|
Investment
Style |
✓ |
✓ |
|
Large
Shareholder Transactions |
✓ |
✓ |
|
Liquidity |
✓ |
✓ |
|
Management |
• |
• |
|
Market |
✓ |
✓ |
|
Master
Limited Partnership |
✓ |
✓ |
|
Mid-Cap
and Small-Cap |
✓ |
✓ |
|
Natural
Resources |
• |
• |
|
NAV |
• |
• |
|
Non-Diversification |
✓ |
✓ |
|
Non-Investment
Grade Fixed Income Securities |
• |
• |
|
Other
Investment Companies |
• |
✓ |
|
Portfolio
Turnover Rate Risk |
✓ |
|
|
Pre-IPO
Investments |
• |
• |
|
Private
Investment in Public Equities |
✓ |
✓ |
|
Special
Purpose Acquisition Companies (“SPACs”) |
✓ |
✓ |
|
Stock |
✓ |
✓ |
|
Strategy |
✓ |
|
|
Tax |
✓ |
✓ |
|
U.S.
Government Securities |
• |
• |
◼
Commodity
Sector Risk—Exposure to
the commodities markets may subject the Fund to greater volatility than
investments in more traditional securities. The value of commodity-linked
investments may be affected by changes in overall market movements, commodity
index volatility, changes in interest rates, or sectors affecting a particular
industry or commodity, such as drought, floods, weather, livestock disease,
embargoes, tariffs and international economic, business, political and
regulatory developments. The prices of energy, industrial metals, precious
metals, agriculture and livestock sector commodities may fluctuate widely due to
factors such as changes in value, supply and demand and governmental regulatory
policies. The energy sector can be significantly affected by changes in the
prices and supplies of oil and other energy fuels, energy conservation, the
success of exploration projects, and tax and other government regulations,
policies of the Organization of Petroleum Exporting Countries (“OPEC”) and
relationships among OPEC members and between OPEC and oil-importing nations. The
metals sector can be affected by sharp price volatility over short periods
caused by global economic, financial and political factors, resource
availability, government regulation, economic cycles, changes in inflation or
expectations about inflation in various countries, interest rates, currency
fluctuations, metal sales by governments, central banks or international
agencies, investment speculation and fluctuations in industrial and commercial
supply and demand. Commodity-linked investments are often offered by companies
in the financial
22
Risks
of the Funds
services
sector, including the banking, brokerage and insurance sectors. As a result,
events affecting issuers in the financial services sector may cause the Fund’s
share value to fluctuate. Although investments in commodities typically move in
different directions than traditional equity and debt securities, when the value
of those traditional securities is declining due to adverse economic conditions,
there is no guarantee that these investments will perform in that manner, and at
certain times the price movements of commodity-linked investments have been
parallel to those of debt and equity securities.
◼
Credit/Default
Risk—An issuer
or guarantor of fixed income securities or instruments held by the Fund (which
may have low credit ratings) may default on its obligation to pay interest and
repay principal or default on any other obligation. The credit quality of the
Fund’s portfolio securities or instruments may meet the Fund’s credit quality
requirements at the time of purchase but then deteriorate thereafter, and such a
deterioration can occur rapidly. In certain instances, the downgrading or
default of a single holding or guarantor of the Fund’s holdings may impair the
Fund’s liquidity and have the potential to cause significant NAV deterioration.
These risks are heightened in market environments where interest rates are
rising as well as in connection with the Fund’s investments in non-investment
grade fixed income securities.
◼
Cybersecurity
Risk—The Fund
may be susceptible to operational and information security risks resulting from
cyber-attacks. Cyber-attacks include, among others, stealing or corrupting
confidential information and other data that is maintained online or digitally
for financial gain, denial-of-service attacks on websites causing operational
disruption, and the unauthorized release of confidential information and other
data. Cyber-attacks have the ability to cause significant disruptions and impact
business operations; to result in financial losses; to prevent shareholders from
transacting business; to interfere with the Fund’s calculation of NAV; and to
lead to violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs and/or
additional compliance costs. Cyber-attacks affecting the Fund or its Investment
Adviser, custodian, Transfer Agent, or other third-party service providers may
adversely impact the Fund and its shareholders.
◼
Derivatives
Risk—The Fund’s
use of options, futures, options on futures, forwards, swaps, options on swaps,
structured securities and other similar instruments (collectively referred to in
this paragraph as “derivatives”) may result in losses, including due to adverse
market movements. Derivatives, which may pose risks in addition to and greater
than those associated with investing directly in securities, currencies or other
assets and instruments, may increase market exposure and be illiquid or less
liquid, volatile, difficult to price and leveraged so that small changes in the
value of the underlying assets or instruments may produce disproportionate
losses to the Fund. Certain derivatives are also subject to counterparty risk,
which is the risk that the other party in the transaction will not fulfill, or
lacks the capacity or authority to fulfill, its contractual obligations,
liquidity risk, which includes the risk that the Fund will not be able to close
its derivatives position when it is advantageous to do so, and risks arising
from margin requirements, which include the risk that the Fund will be required
to pay additional margin or set aside additional collateral to maintain open
derivative positions. The Funds may use derivatives for both hedging and
non-hedging purposes.
The use of
derivatives is a highly specialized activity that involves investment techniques
and risks different from those associated with investments in more traditional
securities and instruments, and there is no guarantee that the use of
derivatives will achieve their intended result. If the Investment Adviser is
incorrect in its expectation of the timing or level of fluctuation in securities
prices, interest rates, currency prices or other variables, the use of
derivatives could result in losses, which in some cases may be significant. A
lack of correlation between changes in the value of derivatives and the value of
the portfolio assets (if any) being hedged could also result in losses. In
addition, there is a risk that the performance of the derivatives or other
instruments used by the Investment Adviser to replicate the performance of a
particular asset class may not accurately track the performance of that asset
class.
The use of
derivatives is also subject to operational and legal risks. Operational risks
generally refer to risks related to potential operational issues, including
documentation issues, settlement issues, system failures, inadequate controls,
and human error. Legal risks generally refer to risks of loss resulting from
insufficient documentation or legality or enforceability of a
contract.
◼
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.
23
◼
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 exchange controls (including
repatriation restrictions). The legal remedies for investors in emerging and
frontier markets may be more limited than the remedies available in the U.S.,
and the ability of U.S. authorities (e.g., SEC and the U.S. Department of
Justice) to bring actions against bad actors may be limited. These risks are not
normally associated with investments in more developed countries. For more
information about these risks, see Appendix A.
◼
Energy
Sector Risk—The Fund
concentrates its investments in the energy sector, and will therefore be
susceptible to adverse economic, business, social, political, environmental,
regulatory or other occurrences affecting that sector. The energy sector has
historically experienced substantial price volatility. At times, the performance
of these investments may lag the performance of other sectors or the market as a
whole. MLPs, energy infrastructure companies and other companies operating in
the energy sector are subject to specific risks, including, among others:
fluctuations in commodity prices and/or interest rates; increased governmental
or environmental regulation; reduced availability of natural gas or other
commodities for transporting, processing, storing or delivering; declines in
domestic or foreign production; slowdowns in new construction; extreme weather
or other natural disasters; and threats of attack by terrorists on energy
assets. Energy companies can be significantly affected by the supply of, and
demand for, particular energy products (such as oil and natural gas), which may
result in overproduction or underproduction. Additionally, changes in the
regulatory environment for energy companies may adversely impact their
profitability. Over time, depletion of natural gas reserves and other energy
reserves may also affect the profitability of energy companies.
During
periods of heightened volatility, energy producers that are burdened with debt
may seek bankruptcy relief. Bankruptcy laws may permit the revocation or
renegotiation of contracts between energy producers and MLPs/energy
infrastructure companies, which could have a dramatic impact on the ability of
MLPs/energy infrastructure companies to pay distributions to its investors,
including the Fund, which in turn could impact the ability of the Fund to pay
dividends and dramatically impact the value of the Fund’s
investments.
MLPs may
incur environmental costs and liabilities due to the nature of their businesses
and the substances they handle. Changes in existing laws, regulations or
enforcement policies governing the energy sector could significantly increase
the compliance costs of MLPs. Certain MLPs could, from time to time, be held
responsible for implementing remediation measures, the cost of which may not be
recoverable from insurance. The Fund will select its investments in MLPs from
the current small pool of issuers. Demand for investment opportunities in MLPs
that operate energy-related businesses may exceed supply, which could make it
difficult to operate the Fund.
◼
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 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
24
Risks
of the Funds
property,
expropriation or nationalization. Geopolitical developments in certain countries
in which a Fund may invest have caused, or may in the future cause, significant
volatility in financial markets. These and other geopolitical developments,
including regional armed conflict in Europe and elsewhere, could negatively
impact the value of the Fund’s investments.
The Fund's
investments in foreign securities may also be subject to foreign currency risk,
the risk of negative foreign currency rate fluctuations, which may cause the
value of securities denominated in such foreign currency (or other instruments
through which the Fund may have exposure to foreign currencies) to decline in
value. Foreign risks will normally be greatest when the Fund invests in
securities of issuers located in emerging countries. For more information about
these risks, see Appendix A.
◼
Infrastructure
Company Risk—Infrastructure
companies are susceptible to various factors that may negatively impact their
businesses or operations, including costs associated with compliance with and
changes in environmental, governmental and other regulations, rising interest
costs in connection with capital construction and improvement programs,
government budgetary constraints that impact publicly funded projects, the
effects of general economic conditions throughout the world, surplus capacity
and depletion concerns, increased competition from other providers of services,
uncertainties regarding the availability of fuel and other natural resources at
reasonable prices, the effects of energy conservation policies, unfavorable tax
laws or accounting policies and high leverage.
Infrastructure
companies will also be affected by innovations in technology that could render
the way in which a company delivers a product or service obsolete, significant
changes to the number of ultimate end-users of a company’s products,
inexperience with and potential losses resulting from a developing deregulatory
environment, increased susceptibility to terrorist attacks and natural or
man-made disasters and other natural risks (including earthquakes, floods,
lightning, hurricanes, tsunamis and wind). Infrastructure companies also face
operating risks, including the risk of fire, explosions, leaks, mining and
drilling accidents or other catastrophic events.
◼
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.
When the 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.
◼
Interest
Rate Risk—When
interest rates increase, fixed income securities or instruments held by the Fund
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.
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 as well as investor sentiment. The Fund may
outperform or underperform other funds that invest in similar asset classes but
employ different investment styles. The Fund intends to employ a blend of growth
and value investment styles depending on market conditions, either of which may
fall out of favor from time to time. 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, since growth companies usually
invest a high portion of earnings in their business, growth stocks may lack the
dividends of some value stocks that can cushion stock prices in a falling
market. Growth oriented funds will typically underperform when value investing
is in favor. Value stocks are those that are undervalued in comparison to their
peers due to adverse business developments or other factors.
◼
Large
Shareholder Transactions Risk—The Fund
may experience adverse effects when certain large shareholders, such as other
funds, institutional investors (including those trading by use of
non-discretionary mathematical formulas), financial intermediaries (who may make
investment decisions on behalf of underlying clients and/or include the Fund in
their investment model),
25
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 the
Fund and shareholders if such sales of investments resulted in gains, and may
also increase transaction costs. In addition, a large redemption could result in
the Fund’s current expenses being allocated over a smaller asset base, leading
to an increase in the Fund’s expense ratio.
◼
Liquidity
Risk—The Fund
may invest in securities or instruments that trade in lower volumes, that are
less liquid than other investments and/or that may become illiquid or less
liquid in response to market developments or adverse investor perceptions.
Investments that are illiquid or that trade in lower volumes may be more
difficult to value. When there is no willing buyer and investments cannot be
readily sold at the desired time or price, the Fund may have to accept a lower
price or may not be able to sell the security or instrument at all. An inability
to sell one or more portfolio positions can adversely affect the Fund’s value or
prevent the Fund from being able to take advantage of other investment
opportunities.
Illiquidity
can be caused by a drop in overall market trading volume, an inability to find a
willing buyer, or legal restrictions on the securities’ resale. To the extent
that the traditional dealer counterparties that engage in fixed income trading
do not maintain inventories of bonds (which provide an important indication of
their ability to “make markets”) that keep pace with the growth of the bond
markets over time, relatively low levels of dealer inventories could lead to
decreased liquidity and increased volatility in the fixed income markets.
Additionally, market participants other than 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.
During
certain periods, the liquidity of particular issuers or industries, or all
securities within particular investment categories, may shrink or disappear
suddenly and without warning as a result of adverse economic, market or
political events (including periods of rapid interest rate changes), or adverse
investor perceptions, whether or not accurate.
Liquidity
risk may also refer to the risk that the Fund will not be able to pay redemption
proceeds within the allowable time period 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. The Fund reserves the right to meet redemption requests
through in-kind distributions. While a Fund may pay redemptions in kind in the
future, the Fund may instead choose to raise cash to meet redemption requests
through sales of portfolio securities or permissible borrowings. If a Fund is
forced to sell securities at an unfavorable time and/or under unfavorable
conditions, such sales may adversely affect the Fund’s NAV and dilute remaining
investors’ interests.
Certain
shareholders, including clients or affiliates of the Investment Adviser and/or
other funds managed by the Investment Adviser, may from time to time own or
control a significant percentage of a Fund’s shares. Redemptions by these
shareholders of their shares of a 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 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, rapid
interest rate changes, supply chain disruptions, sanctions, the spread of
infectious illness or other public health threats could also adversely impact
issuers, markets and economies, including in ways that cannot necessarily be
foreseen. The Fund could be negatively impacted if the value of a portfolio
holding were harmed by such political or economic conditions or events. In
addition, governmental and quasi-governmental organizations have taken a number
of unprecedented actions designed to support the markets. Such conditions,
events and actions may result in greater market risk.
◼
Master
Limited Partnership Risk—
Investments in securities of an MLP involve risks that differ from investments
in common stock, including risks related to limited control and limited rights
to vote on matters affecting the MLP, risks related to potential conflicts of
interest between the MLP and the MLP’s general partner, cash flow risks,
dilution risks and risks related to the general partner’s right to require
unit-holders to sell their common units at an undesirable time or price,
resulting from regulatory changes or other reasons. Certain MLP securities may
trade in lower volumes due to their smaller capitalizations. Accordingly, those
MLPs
26
Risks
of the Funds
may be
subject to more abrupt or erratic price movements and may lack sufficient market
liquidity to enable a Fund to effect sales at an advantageous time or without a
substantial drop in price. Investment in those MLPs may restrict a Fund’s
ability to take advantage of other investment opportunities. MLPs are generally
considered interest-rate sensitive investments that generally rely on capital
markets to finance capital expenditures and growth opportunities. During periods
of interest rate volatility, limited capital markets access and/or low
commodities pricing, these investments may not provide attractive
returns.
To the
extent a distribution received by a Fund from an MLP is treated as a return of
capital, the Fund’s adjusted tax basis in the interests of the MLP may be
reduced, which will result in an increase in an amount of income or gain (or
decrease in the amount of loss) that will be recognized by the Fund for tax
purposes upon the sale of any such interests or upon subsequent distributions in
respect of such interests. Furthermore, any return of capital distribution
received from the MLP may require a Fund to restate the character of its
distributions and amend any shareholder tax reporting previously issued.
Moreover, a change in current tax law, or a change in the underlying business
mix of a given MLP, could result in an MLP being treated as a corporation for
U.S. federal income tax purposes, which could result in a reduction of the value
of a Fund’s investment in the MLP and lower income to the
Fund.
◼
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.
◼
Natural
Resources Risk—The Fund
may invest in MLPs and companies principally engaged in owning or developing
non-energy natural resources (including timber and minerals) and industrial
materials, or supplying goods or services to such companies. The Fund’s
investments in natural resources issuers (including MLPs) will be subject to the
risk that prices of these investments may fluctuate widely in response to the
level and volatility of commodity prices; exchange rates; import controls;
domestic and global competition; environmental regulation and liability for
environmental damage; mandated expenditures for safety or pollution control; the
success of exploration projects; depletion of resources; tax policies; and other
governmental regulation. Investments in natural resources issuers can be
significantly affected by changes in the supply of or demand for natural
resources. The value of investments in natural resources issuers may be
adversely affected by a change in inflation.
◼
NAV
Risk—The NAV of
the Fund and the value of your investment will fluctuate.
◼
Non-Diversification
Risk—The Fund is
non-diversified, which means it is permitted to invest a larger percentage of
its assets in one or more issuers or in fewer issuers than diversified mutual
funds. As a result of the relatively small number of issuers in which the Fund
generally invests, it may be subject to greater risks than a more diversified
fund. A change in the value of any single investment held by the Fund may have a
greater effect on the overall value of the Fund than it would on a diversified
mutual fund that holds more investments. In particular, the Fund may be more
susceptible to adverse developments affecting any single issuer held in its
portfolio and may be susceptible to greater losses because of these
developments.
◼
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. These securities structured as zero-coupon bonds or pay-in-kind
securities may require the Fund to make taxable distributions of imputed income
without receiving any corresponding cash. Investments in these types of
instruments may present special tax issues for the Fund. U.S. federal income tax
rules are not entirely clear about issues such as when the Fund may cease to
accrue interest, original issue discount or market discount, when and to what
extent deductions may be taken for bad debts or worthless instruments, how
payments received on obligations in default should be allocated between
principal and income and whether exchanges of debt obligations in a bankruptcy
or workout context are taxable. These and other issues will be addressed by the
Fund to the extent necessary in order to seek to ensure that it distributes
sufficient income that it does not become subject to U.S. federal income or
excise tax.
◼
Other
Investment Companies Risk—By
investing in other investment companies (including ETFs) indirectly through the
Fund, investors will incur a proportionate share of the expenses of the other
investment companies held by the Fund (including operating costs and investment
management fees) in addition to the fees and expenses regularly borne by the
Fund. In addition, the Fund will be affected by the investment policies,
practices and performance of such investment companies in direct proportion to
the amount of assets the Fund invests therein.
◼
Portfolio
Turnover Rate Risk— A high
rate of portfolio turnover involves correspondingly greater expenses which must
be borne by the Fund and its shareholders, and is also likely to result in
short-term capital gains taxable to shareholders.
27
◼
Pre-IPO
Investments Risk—The Fund
may invest in privately held companies, including companies that may issue
shares in IPOs. Investments in pre-IPO shares involve greater risks than
investments in shares of companies that have traded publicly on an exchange for
extended periods of time. Investments in these companies are less liquid and
difficult to value, and there is significantly less information available about
these companies’ business models, quality of management, earnings growth
potential, and other criteria used to evaluate their investment prospects.
Although there is a potential the pre-IPO shares that the Fund buys may increase
in value if the company does issue shares in an IPO, IPOs are risky and volatile
and may cause the value of the Fund’s investments to decrease significantly.
Moreover, because pre-IPO shares are generally not freely or publicly tradeable,
the Fund may not have access to purchase or the ability to sell these shares in
the amounts or at the prices the Fund desires. The companies that the Fund
anticipates holding successful IPOs may not ever issue shares in an IPO and a
liquid market for their shares may never develop, which may negatively affect
the price at which the Fund can sell these shares and make it more difficult to
sell these shares, which could also adversely affect the Fund’s
liquidity.
◼
Private
Investment in Public Equities Risk—The Fund
may make private investments in public equities (“PIPE”). PIPE transactions
typically involve the purchase of securities directly from a publicly traded
company or its affiliates in a private placement transaction, typically at a
discount to the market price of the company’s common stock. In a PIPE
transaction, the Fund may bear the price risk from the time of pricing until the
time of closing. Equity issued in this manner is often subject to transfer
restrictions and is therefore relatively less liquid than equity issued through
a registered public offering. In a PIPE transaction, the Fund may bear the price
risk from the time of pricing until the time of closing. The Fund may be subject
to lock-up agreements that prohibit transfers for a fixed period of time. In
addition, because the sale of the securities in a PIPE transaction is not
registered under the Securities Act, the securities are “restricted” and cannot
be immediately resold by the investors into the public markets. The Fund may
enter into a registration rights agreement with the issuer pursuant to which the
issuer commits to file a resale registration statement allowing the Fund to
publicly resell its securities. Accordingly, PIPE securities may be deemed
illiquid. However, the ability of the Fund to freely transfer the shares is
conditioned upon, among other things, the SEC’s preparedness to declare the
resale registration statement effective covering the resale, from time to time,
of the shares sold in the private financing and the issuer’s right to suspend
the Fund’s use of the resale registration statement if the issuer is pursuing a
transaction or some other material non-public event is occurring. Accordingly,
PIPE securities may be subject to risks associated with illiquid
investments.
◼
Special
Purpose Acquisition Companies Risk—The Fund
may invest in stock, warrants, and other securities of SPACs. A SPAC is
typically a publicly traded company that raises funds through an IPO for the
purpose of acquiring or merging with another company to be identified subsequent
to the SPAC’s IPO. Because SPACs and similar entities are in essence blank check
companies without operating history or ongoing business other than seeking
acquisitions, the value of their securities is particularly dependent on the
ability of the entity’s management to identify and complete a profitable
acquisition. An investment in a SPAC is subject to a variety of risks, including
that (i) prior to any acquisition or merger, a SPAC’s assets are typically
invested in U.S. government securities, money market funds and similar
investments whose returns or yields may be significantly lower than those of the
Fund’s other investments; (ii) the Fund generally will not receive significant
income from its investments in SPACs (both prior to and after any acquisition or
merger) and, therefore, the Fund’s investments in SPACs will not significantly
contribute to the Fund’s distributions to shareholders; (iii) attractive
acquisition or merger targets may become scarce if the number of SPACs seeking
to acquire operating businesses increases; (iv) an attractive acquisition or
merger target may not be identified at all, in which case the SPAC will be
required to return any remaining monies to shareholders (unless such
shareholders approve alternative arrangements), and the Fund may be subject to
opportunity costs to the extent that alternative investments would have produced
higher returns; (v) if an acquisition or merger target is identified, the Fund
may elect not to participate in, or vote to approve, the proposed transaction or
the Fund may be required to divest its interests in the SPAC, due to regulatory
or other considerations, in which case the Fund may not reap any resulting
benefits; (vi) an acquisition or merger once effected may prove unsuccessful and
an investment in the SPAC may lose value; (vii) an investment in a SPAC may be
diluted by additional, later offerings of securities by the SPAC or by other
investors exercising existing rights to purchase securities of the SPAC; (viii)
a significant portion of the funds raised by the SPAC may be expended during the
search for a target acquisition or merger; (ix) only a thinly traded market for
shares of or interests in a SPAC may develop, or there may be no market at all,
leaving the Fund unable to sell its interest in a SPAC or to sell its interest
only at a lower price; and (x) the values of investments in SPACs may be highly
volatile and may depreciate significantly over time. In addition, the Fund may
obtain certain private rights and other interests issued by a SPAC (commonly
referred to as “founder shares”), which may be subject to forfeiture or expire
worthless and which generally have more limited liquidity than SPAC shares
issued in an IPO.
◼
Stock
Risk—Stock
prices have historically risen and fallen in periodic cycles. U.S. and
foreign stock markets have experienced periods of substantial price volatility
in the past and may do so again in the future. Stock prices may fluctuate from
time to time in response to the activities of individual companies and in
response to general market and economic conditions. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments, and the stock prices of such companies may suffer a decline in
response.
28
Risks
of the Funds
◼
Strategy
Risk—The MLP
Energy Infrastructure Fund’s strategy of investing primarily in MLPs, resulting
in its being taxed as a corporation, or a “C” corporation, rather than as a
regulated investment company for U.S. federal income tax purposes, is a
relatively new investment strategy for funds. This strategy involves complicated
accounting, tax and valuation issues. Volatility in the NAV may be experienced
because of the use of estimates at various times during a given year that may
result in unexpected and potentially significant consequences for the Fund and
its shareholders. To the extent that accounting, tax or valuation practices
change, there could be a material adverse consequence on the Fund and its
shareholders.
◼
Tax
Risk—Tax risks
associated with investments in the Fund include but are not limited to the
following:
MLP
Tax Risk. Much of
the benefit that a Fund may derive from its investment in equity securities of
MLPs is a result of MLPs generally being treated as partnerships for U.S.
federal income tax purposes. Partnerships do not pay U.S. federal income tax at
the partnership level. Rather, each partner is allocated a share of the
partnership’s income, gains, losses, deductions and expenses. A change in
current tax law or a change in the underlying business mix of a given MLP could
result in an MLP being treated as a corporation for U.S. federal income tax
purposes, which would result in the MLP being required to pay U.S. federal
income tax (as well as state and local income taxes) on its taxable income. The
classification of an MLP as a corporation for U.S. federal income tax purposes
would have the effect of reducing the amount of cash available for distribution
by the MLP. If any MLP in which a Fund invests were treated as a corporation for
U.S. federal income tax purposes, it could result in a reduction of the value of
the Fund’s investment in the MLP and lower income to the Fund.
Distributions from an MLP
in excess of the Fund’s basis in the MLP will generally be treated as capital
gain. However, a portion of the gain may instead be treated as ordinary income
to the extent attributable to certain assets held by the MLP the sale of which
would produce ordinary income. To the extent a distribution received by a Fund
from an MLP is treated as a return of capital, the Fund’s adjusted tax basis in
the interests of the MLP may be reduced, which will result in an increase in an
amount of income or gain (or decrease in the amount of loss) that will be
recognized by the Fund for tax purposes upon the sale of any such interests or
upon subsequent distributions in respect of such interests. Furthermore, any
return of capital distribution received from the MLP may require a Fund to
restate the character of its distributions and amend any shareholder tax
reporting previously issued.
Investment
in MLP C Corporations. As
discussed above, the MLP Energy Infrastructure Fund may invest in MLPs taxed as
C corporations. Such MLPs are obligated to pay federal income tax on their
taxable income at the corporate tax rate and the amount of cash available for
distribution by such MLPs would generally be reduced by any such tax.
Additionally, distributions received by the Fund would be taxed under federal
income tax laws applicable to corporate dividends (as dividend income,
potentially subject to the corporate dividends received deduction, return of
capital, or capital gain). Thus, investment in MLPs taxed as C corporations
could result in a reduction of the value of your investment in the Fund and
lower income, as compared to investments in MLPs that are classified as
partnerships for tax purposes.
Fund
Structure Risk. Unlike
traditional mutual funds that are structured as regulated investment companies
for U.S. federal income tax purposes, the MLP Energy Infrastructure Fund will be
taxable as a regular corporation, or “C” corporation, for U.S. federal income
tax purposes. This means the Fund generally will be subject to U.S. federal
income tax on its taxable income at the rates applicable to corporations (at a
rate of 21%), and will also be subject to state and local income
taxes.
Tax
Estimation/NAV Risk. In
calculating the MLP Energy Infrastructure Fund’s NAV, the Fund will, among other
things, account for its current taxes and deferred tax liability and/or asset
balances. The Fund will accrue a deferred income tax liability balance, at the
then effective statutory U.S. federal income tax rate (at a rate of 21%) plus an
estimated state and local income tax rate, for its future tax liability
associated with the capital appreciation of its investments and the
distributions received by the Fund on interests of MLPs considered to be return
of capital and for any net operating gains. Any deferred tax liability balance
will reduce the Fund’s NAV. The Fund may also accrue a deferred tax asset
balance, which reflects an estimate of the Fund’s future tax benefit associated
with net operating losses and unrealized losses. Any deferred tax asset balance
will increase the Fund’s NAV. To the extent the Fund has a deferred tax asset
balance, consideration is given as to whether or not a valuation allowance,
which would offset the value of some or all of the deferred tax asset balance,
is required. The Fund will rely to some extent on information provided by MLPs,
which may not be provided to the Fund on a timely basis, to estimate current
taxes and deferred tax liability and/or asset balances for purposes of financial
statement reporting and determining its NAV. The daily estimate of the Fund’s
current taxes and deferred tax liability and/or asset balances used to calculate
the Fund’s NAV could vary significantly from the Fund’s actual tax liability or
benefit, and, as a result, the determination of the Fund’s actual tax liability
or benefit may have a material impact on the Fund’s NAV. From time to time, the
Fund may modify its estimates or assumptions regarding its current taxes and
deferred tax liability and/or asset balances as new information becomes
available, which modifications in estimates or assumptions may have a material
impact on the Fund’s NAV. Shareholders who redeem their shares at a NAV that is
based on estimates of the Fund’s current taxes and deferred tax liability and/or
asset balances may benefit at the expense of remaining shareholders (or
remaining shareholders may benefit at the expense of redeeming shareholders) if
the estimates are later revised or ultimately differ from the Fund’s actual
current taxes and tax liability and/or asset balances.
29
◼
U.S.
Government Securities Risk—The U.S.
government may not provide financial support to U.S. government agencies,
instrumentalities or sponsored enterprises if it is not obligated to do so by
law. U.S. Government Securities issued by those agencies,
instrumentalities and sponsored enterprises, including those issued by the
Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage
Corporation (“Freddie Mac”) and the Federal Home Loan Banks, are neither issued
nor guaranteed by the U.S. Treasury and, therefore, are not backed by the full
faith and credit of the United States. The maximum potential liability of the
issuers of some U.S. Government Securities held by the Fund may greatly exceed
their current resources, including any legal right to support from the U.S.
Treasury. It is possible that issuers of U.S. Government Securities will not
have the funds to meet their payment obligations in the future. Fannie Mae and
Freddie Mac have been operating under conservatorship, with the Federal Housing
Finance Agency (“FHFA”) acting as their conservator, since September 2008. The
entities are dependent upon the continued support of the U.S. Department of the
Treasury and FHFA in order to continue their business operations. These factors,
among others, could affect the future status and role of Fannie Mae and Freddie
Mac and the value of their securities and the securities which they guarantee.
Additionally, the U.S. government and its agencies and instrumentalities do not
guarantee the market values of their securities, which may
fluctuate.
More
information about the Fund’s portfolio securities and investment techniques, and
its associated risks, is provided in Appendix A. You should consider the
investment risks discussed in this section and in Appendix A. Both are important
to your investment choice.
30
Service
Providers
|
INVESTMENT
ADVISER |
|
Investment
Adviser |
Funds |
|
Goldman
Sachs Asset Management, L.P. (“GSAM”)
200
West Street
New
York, NY 10282 |
MLP
Energy Infrastructure Fund
Energy
Infrastructure Fund |
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 the
U.S. and foreign markets. As permitted by applicable law, these orders may be
directed to any executing brokers, dealers, futures commission merchants or
other counterparties, including Goldman Sachs and its affiliates. While the
Investment Adviser is ultimately responsible for the management of the Fund, it
is able to draw upon the research and expertise of its asset management
affiliates for portfolio decisions and management with respect to certain
portfolio securities. In addition, the Investment Adviser has access to the
research and certain proprietary technical models developed by Goldman Sachs
(subject to legal, internal, regulatory and Chinese Wall restrictions), and will
apply quantitative and qualitative analysis in determining the appropriate
allocations among categories of issuers and types of
securities.
The
Investment Adviser also performs the following additional services for the Fund
(to the extent not performed by others pursuant to agreements with the
Fund):
◼
Supervises
all non-advisory operations of the Fund
◼
Provides
personnel to perform necessary executive, administrative and clerical services
to the Fund
◼
Arranges
for the preparation of all required tax returns, reports to shareholders,
prospectuses and statements of additional information and other reports filed
with the SEC and other regulatory authorities
◼
Maintains
the records of the Fund
◼
Provides
office space and all necessary office equipment and services
An
investment in the Fund may be negatively impacted because of the operational
risks arising from factors such as processing errors and human errors,
inadequate or failed internal or external processes, failures in systems and
technology, changes in personnel, and errors caused by third-party service
providers or trading counterparties. 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.
31
|
MANAGEMENT
FEES AND OTHER EXPENSES |
As
compensation for its services and its assumption of certain expenses, the
Investment Adviser is entitled to the following fees, computed daily and payable
monthly, at the annual rates listed below (as a percentage of each respective
Fund’s average daily net assets):
|
Fund |
Contractual
Management
Fee
Annual
Rate |
Average
Daily
Net
Assets |
Actual
Rate
For
the Fiscal
Period
Ended
November
30, 2023* |
|
MLP
Energy Infrastructure Fund |
1.00% |
First $1
Billion |
0.97% |
|
|
0.90% |
Next $1
Billion |
|
|
|
0.86% |
Next $3
Billion |
|
|
|
0.84% |
Next $3
Billion |
|
|
|
0.82% |
Over $8
Billion |
|
|
Energy
Infrastructure Fund |
1.00% |
First $1
Billion |
1.00% |
|
|
0.90% |
Next $1
Billion |
|
|
|
0.86% |
Next $3
Billion |
|
|
|
0.84% |
Next $3
Billion |
|
|
|
0.82% |
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 equal to any management fees it
earns as an investment adviser to any of the affiliated funds in which the
Energy Infrastructure Fund invests, except those management fees it earns from
the Fund’s investments of cash collateral received in connection with securities
lending transactions in affiliated funds. This arrangement will remain in effect
through at least March 29, 2025, and prior to such date, the Investment Adviser
may not terminate this arrangement without the approval of the Board of
Trustees.
In addition
to the management fee waiver described above, the Investment Adviser may (i)
waive an additional portion of its management fee with respect to the Energy
Infrastructure Fund; and (ii) waive a portion of its management fee with respect
to the MLP Energy Infrastructure Fund, including fees earned as an investment
adviser to any affiliated funds in which the MLP Energy Infrastructure Fund may
invest, from time to time, and may discontinue or modify any such waivers in the
future, consistent with the terms of any fee waiver arrangements that may be in
place.
A discussion regarding the
basis for the Board of Trustees’ approval of the Management Agreement for the
Funds is available in each Fund’s respective annual report for the period ended
November 30, 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 0.064% and 0.064% of average daily net assets for the
MLP Energy Infrastructure Fund and the Energy Infrastructure Fund, respectively,
through at least March 29, 2025, and prior to such date, the Investment Adviser
may not terminate these 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. A
Fund’s “Other Expenses” may be further reduced by any custody and transfer
agency fee credits received by the Fund.
32
Service
Providers
|
FUND
MANAGERS |
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.
Energy &
Infrastructure Team
|
Name
and Title |
Fund
Responsibility |
Years
Primarily
Responsible |
Five
Year Employment History |
|
Kyri
Loupis
Managing
Director |
Portfolio
Manager—
MLP
Energy Infrastructure
Energy
Infrastructure |
Since
2013
2017 |
Mr.
Loupis joined the Investment Adviser in 2009 and is a portfolio
manager
and head of the Energy & Infrastructure Team. |
|
Matthew
Cooper
Vice
President |
Portfolio
Manager—
MLP
Energy Infrastructure
Energy
Infrastructure |
Since
2014
2017 |
Mr.
Cooper joined the Investment Adviser in 2013 and is a portfolio
manager
for the Energy & Infrastructure Team. |
|
Christopher
A. Schiesser
Vice
President |
Portfolio
Manager—
MLP
Energy Infrastructure |
Since
2023 |
Mr.
Schiesser joined the Investment Adviser in 2015 and is a
portfolio
manager for the Energy & Infrastructure Team. |
|
Akif
Irfan
Vice
President |
Portfolio
Manager—
Energy
Infrastructure |
Since
2023 |
Mr.
Irfan joined the Investment Adviser in 2011 and is a portfolio
manager
for the Energy & Infrastructure
Team. |
For
information about portfolio manager compensation, other accounts managed by the
portfolio managers 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
R6 Shares, 0.04% of average daily net assets with respect to the Institutional
Shares and 0.15% of average daily net assets with respect to the Class A, Class
C, Investor and Class R Shares.
From time
to time, Goldman Sachs or any of its affiliates may purchase and hold shares of
the Funds. 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 a Fund and
will, under certain circumstances, limit a 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 Funds, 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 a Fund may directly and indirectly invest. Thus, it is expected that
each 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 Funds. Although management fees paid by the Funds 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 a Fund even if
33
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 a
Fund and/or which engage in and compete for transactions in the same types of
securities, currencies and instruments as a Fund. Goldman Sachs and its
affiliates will not have any obligation to make available any information
regarding their proprietary activities or strategies, or the activities or
strategies used for other accounts managed by them, for the benefit of the
management of a Fund. The results of a 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 a Fund could sustain
losses during periods in which Goldman Sachs and its affiliates and other
accounts achieve significant profits on their trading for Goldman Sachs or other
accounts. In addition, a Fund may enter into transactions in which Goldman Sachs
and its affiliates or their other clients have an adverse interest. For example,
a 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 a
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 a Fund. A 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 a 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 a Fund or who engage in
transactions with or for a Fund. For more information about conflicts of
interest, see the section entitled “Potential Conflicts of Interest” in the
SAI.
The Funds
will, from time to time, make brokerage and other payments to Goldman Sachs and
its affiliates in connection with the Funds’ portfolio investment transactions,
in accordance with applicable law.
Under a
securities lending program, the Energy Infrastructure 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
an affiliated lending agent has acted as lending agent.
34
Distributions
The MLP
Energy Infrastructure Fund pays distributions from its investment income. The
Energy Infrastructure Fund pays distributions from its net 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 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 Authorized Institution) 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. If cash
distributions are elected with respect to the Fund’s distributions from net
investment income, then cash distributions must also be elected with respect to
the net short-term capital gains component, if any, of the Fund’s 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.
Distributions
from investment income of the MLP Energy Infrastructure Fund, if any, are
normally declared and paid quarterly. Distributions from net investment income
and from net capital gains of the Energy Infrastructure Fund, if any, are
normally declared and paid at least semi-annually and annually, respectively. In
addition, the Funds may occasionally make a distribution at a time when it is
not normally made.
MLP Energy
Infrastructure Fund
The MLP
Energy Infrastructure Fund currently anticipates making distributions to its
shareholders each fiscal quarter (February, May, August, November) of
substantially all of the Fund’s distributable cash flow received as cash
distributions from MLPs, interest payments received on debt securities owned by
the Fund and other payments on securities owned by the Fund. For additional
information about the tax treatment of distributions made by the MLP Energy
Infrastructure Fund, please see the discussion in the “Taxation”
section.
Energy Infrastructure
Fund
In addition
to the net investment income dividends declared and paid at least semi-annually,
the Energy Infrastructure Fund may also earn additional net investment income
throughout the year. Any additional net investment income will be distributed
annually as a declared event and paid to shareholders of record for such
events.
From time
to time a portion of the Fund’s distributions may constitute a return of capital
for tax purposes, and/or may include amounts in excess of the Fund’s net
investment income for the period calculated in accordance with generally
accepted accounting principles (GAAP).
When you
purchase shares of the Fund, part of the NAV per share may be represented by
undistributed income and/or realized gains that have previously been earned by
the Fund. Therefore, subsequent distributions on such shares from such income
and/or realized gains may be taxable to you even if the NAV of the shares is, as
a result of the distributions, reduced below the cost of such shares and the
distributions (or portions thereof) represent a return of a portion of the
purchase price.
35
Shareholder
Guide
The
following section will provide you with answers to some of the most frequently
asked questions regarding buying and selling the Funds' shares.
|
How
To Buy Shares |
Shares
Offering
Shares of
the Funds are continuously offered through the Distributor. The Funds 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 Funds?
You may
purchase shares of the Funds through certain intermediaries that have a
relationship with Goldman Sachs, including banks, trust companies, brokers,
registered investment advisers and other financial institutions
(“Intermediaries”). Certain Intermediaries have been authorized by Goldman Sachs
Trust (the “Trust”) to accept purchase, redemption or exchange orders on behalf
of the Funds for their customers (“Authorized Institutions”), and if approved by
the Funds, may designate other financial intermediaries to accept such orders.
You should contact your Intermediary to learn whether it is authorized to accept
orders on behalf of the Funds (i.e., an
Authorized Institution). In order to make an initial investment in a Fund you
must furnish to your Intermediary the information in the account
application.
The
decision as to which class to purchase depends on the amount you invest, the
intended length of the investment and your personal situation. You should
contact your Intermediary to discuss which share class option is right for
you.
Note:
Intermediaries may receive different compensation for selling different share
classes.
To open an
account, contact your Intermediary. Customers of an Intermediary will normally
give their order instructions to the Intermediary, and the Intermediary will, in
turn, place the order with the Transfer Agent. Intermediaries are 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 their customers. 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 by an
Intermediary on a timely basis.
A 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 the Transfer Agent (or, if
applicable, by an Authorized Institution) on a business day, and the order will
be priced at the Fund’s current NAV per share (adjusted for any applicable sales
charge) next determined after acceptance by the Transfer Agent (or, if
applicable, by an Authorized Institution). For shareholders that place trades
directly with a Fund’s Transfer Agent, 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. Intermediaries of the Funds
may have different requirements regarding what constitutes proper form for trade
instructions. Please contact your Intermediary for more information.
For
purchases by check, the Funds will not accept checks drawn on foreign banks,
third party checks, temporary checks, cash or cash equivalents; e.g., cashier’s
checks, official bank checks, money orders, traveler’s cheques or credit card
checks. In limited situations involving the transfer of retirement assets, a
Fund may accept cashier’s checks or official bank checks.
Investor
and Class R Shares are not sold directly to the public. Instead, Investor and
Class R Shares generally are available only to Section 401(k), 403(b), 457,
profit sharing, money purchase pension, tax-sheltered annuity, defined benefit
pension, non-qualified deferred compensation plans and non-qualified pension
plans or other employee benefit plans (including health savings accounts) or
SIMPLE plans that are sponsored by one or more employers (including governmental
or church employers) or employee organizations (“Employee Benefit Plans”).
Investor Shares may also be sold to accounts established under a fee-based
program that is sponsored and maintained by an Intermediary that has entered
into a contractual relationship with Goldman Sachs to offer such shares through
such programs (“Eligible Fee-Based Program”). Investor and Class R Shares are
not available to traditional and Roth Individual Retirement Accounts (“IRAs”),
SEPs and SARSEPs; except that Investor Shares are available to such accounts or
plans to the extent they are purchased through an Eligible Fee-Based Program.
Employee Benefit Plans and Eligible Fee-Based Programs must purchase Investor or
Class R Shares through an Intermediary using a plan level or omnibus
account.
Employee
Benefit Plans generally may open an account and purchase Investor and/or Class R
Shares through Intermediaries, financial planners, Employee Benefit Plan
administrators and other financial intermediaries. Investor and/or Class R
Shares may not be available through certain Intermediaries.
36
Shareholder
Guide
Class R6
Shares are generally available to the following investors who purchase shares of
the Funds through certain Intermediaries that have a contractual relationship
with Goldman Sachs, including banks, trust companies, brokers, registered
investment advisers and other financial institutions, using a plan level or
omnibus account, unless otherwise noted below.
◼
Investors
who purchase Class R6 Shares through an Eligible Fee-Based Program;
◼
Employee
Benefit Plans;
◼
Registered
investment companies or bank collective trusts investing directly with the
Transfer Agent;
◼
Institutional
investors, including companies, foundations, endowments, municipalities, trusts
and other entities, investing at least $5,000,000 directly with the Transfer
Agent; and
◼
Other
investors at the discretion of the Trust’s officers.
Class R6
Shares may not be available through certain Intermediaries. For the purposes of
Class R6 Shares eligibility, the term “Intermediary” does not include Goldman
Sachs or its affiliates and Class R6 Shares will not be available to clients of
Goldman Sachs Private Wealth Management, The Goldman Sachs Trust Company, N.A.,
The Goldman Sachs Trust Company of Delaware or The Ayco Company,
L.P.
What Is My Minimum
Investment In The Funds?
For each of
your accounts investing in Class A or Class C Shares, the following investment
minimums must be met:
|
|
Initial |
Additional* |
|
Regular
Accounts |
$1,000 |
$50 |
|
Employee
Benefit Plans |
No
Minimum |
No
Minimum |
|
Uniform
Gift/Transfer to Minors Accounts (UGMA/UTMA) |
$250 |
$50 |
|
Individual
Retirement Accounts and Coverdell ESAs |
$250 |
$50 |
|
Automatic
Investment Plan Accounts |
$250 |
$50 |
*
No
minimum additional investment requirements are imposed with respect to investors
trading through Intermediaries who aggregate shares in omnibus or similar
accounts (e.g., employee benefit plan accounts, wrap program accounts or
traditional brokerage house accounts). A maximum purchase limitation of
$1,000,000 in the aggregate normally applies to purchases of Class C Shares
across all Goldman Sachs Funds.
For
Institutional Shares, the minimum initial investment is $1,000,000 for
individual or Institutional Investors, alone or in combination with other assets
under the management of the Investment Adviser and its affiliates, except that
no initial minimum will be imposed on (i) Employee Benefit Plans that hold their
Institutional Shares through plan-level or omnibus accounts; or (ii) investment
advisers investing for accounts for which they receive asset-based fees where
the investment adviser or its Intermediary purchases Institutional Shares
through an omnibus account. For this purpose, “Institutional Investors” shall
include “wrap” account sponsors (provided they have an agreement covering the
arrangement with the Distributor); corporations; qualified non-profit
organizations, charitable trusts, foundations and endowments; any state, county
or city, or any instrumentality, department, authority or agency thereof; and
banks, trust companies or other depository institutions investing for their own
account or on behalf of their clients.
No minimum
amount is required for initial purchases in Investor, Class R and Class R6
Shares (except as provided below) or additional investments in Institutional,
Investor, Class R or Class R6 Shares.
For Class
R6 Shares, the minimum initial investment is $5,000,000 for institutional
investors, including companies, foundations, endowments, municipalities, trusts
and other entities who purchase Class R6 Shares directly with the Transfer
Agent.
The minimum
investment requirement for Class A, Class C and Institutional Shares may be
waived for (i) Goldman Sachs, its affiliates (including the Trust) or their
respective Trustees, officers, partners, directors or employees (including
retired employees and former partners), as well as certain individuals related
to such investors, including spouses or domestic partners, minor children
including those of their domestic partners, other family members residing in the
same household, and/or financial dependents, provided that all of the above are
designated as such with an Intermediary or the Funds’ Transfer Agent; (ii)
advisory clients of Goldman Sachs Private Wealth Management and accounts for
which The Goldman Sachs Trust Company, N.A. acts in a fiduciary capacity (i.e.,
as agent or trustee); (iii) certain mutual fund “wrap” programs at the
discretion of the Trust’s officers; and (iv) other investors at the discretion
of the Trust’s officers. No minimum amount is required for additional
investments in such accounts.
What Should I Know
When I Purchase Shares Through An Intermediary?
If shares
of a Fund are held in an account maintained and serviced by your Intermediary,
all recordkeeping, transaction processing and payments of distributions relating
to your account will be performed by your Intermediary, and not by a Fund and
its Transfer Agent. Since the Funds will have no record of your transactions,
you should contact your Intermediary to purchase, redeem or exchange shares, to
make changes in or give instructions concerning your account or to obtain
information about your account. The transfer of shares from an account with one
Intermediary to an account with another Intermediary involves special procedures
and may require
37
you to
obtain historical purchase information about the shares in the account from your
Intermediary. If your Intermediary’s relationship with Goldman Sachs is
terminated, and you do not transfer your account to another Intermediary, the
Trust reserves the right to redeem your shares. The Trust will not be
responsible for any loss in an investor’s account or tax liability resulting
from a redemption.
Intermediaries
that invest in shares on behalf of their customers may charge brokerage
commissions or other fees directly to their customer accounts in connection with
their investments. You should contact your Intermediary for information
regarding such charges, as these fees, if any, may affect the return such
customers realize with respect to their investments.
The
Investment Adviser, Distributor and/or their affiliates may make payments or
provide services to Intermediaries and other persons to promote the sale,
distribution and/or servicing of shares of the Funds and other Goldman Sachs
Funds, except that the Investment Adviser, Distributor and their affiliates do
not make such payments on behalf of Class R6 Shares. These payments are made out
of the Investment Adviser’s, Distributor’s and/or their affiliates’ own assets,
and are not an additional charge to the Funds. The payments are in addition to
the distribution and service fees and sales charges described in the Prospectus.
Such payments are intended to compensate Intermediaries and other persons for,
among other things: marketing shares of the Funds and other Goldman Sachs Funds,
which may consist of payments relating to the Funds’ inclusion on preferred or
recommended fund lists or in certain sales programs sponsored by the recipients;
access to the Intermediaries’ registered representatives or salespersons,
including at conferences and other meetings; assistance in training and
education of personnel; marketing support; the provision of analytical or other
data to the Investment Adviser or its affiliates relating to sales of shares of
the Funds and other Goldman Sachs Funds; the support or purchase of technology
platforms/software; and/or other specified services intended to assist in the
distribution and marketing of the Funds and other Goldman Sachs Funds, including
provision of consultative services to the Investment Adviser or its affiliates
relating to marketing and/or sale of shares of the Funds and other Goldman Sachs
Funds. The payments may also, to the extent permitted by applicable regulations,
sponsor various trainings and educational programs. The payments by the
Investment Adviser, Distributor and/or their affiliates, which are in addition
to the fees paid for these services by the Funds, may also compensate
Intermediaries and other persons for sub-accounting, sub-transfer agency,
administrative, shareholder processing and/or recordkeeping services. These
additional payments may exceed amounts earned on these assets by the Investment
Adviser, Distributor and/or their affiliates for the performance of these or
similar services. The amount of these additional payments is normally not
expected to exceed 0.50% (annualized) of the amount sold or invested through the
recipients. In addition, certain Intermediaries may have access to certain
services from the Investment Adviser, Distributor and/or their affiliates,
including research reports, economic analysis, and portfolio analysis, portfolio
construction and similar tools and software. In certain cases, the
Intermediaries may not pay for these products. Please refer to the “Payments to
Intermediaries” section of the SAI for more information about these and similar
payments and services.
The
payments made by the Investment Adviser, Distributor and/or their affiliates and
the services provided by an Intermediary or other person may differ for
different Intermediaries and other persons. The presence of these and similar
payments, receipt of these services and the basis on which an Intermediary
compensates its registered representatives or salespersons may create an
incentive for a particular Intermediary, registered representative, salesperson
or other person to highlight, feature or recommend Funds based, at least in
part, on the level of compensation paid. You should contact your Intermediary,
or any other person that provides services to you, for more information about
the payments it receives and any potential conflicts of interest.
You may be
required to pay a commission directly to a broker or financial intermediary for
effecting transactions in Institutional Shares. In addition to Institutional
Shares, each Fund also offers other classes of shares to investors. These other
share classes are subject to different fees and expenses (which affect
performance) and are entitled to different services than Institutional Shares.
Information regarding these other share classes is included in the Prospectus
for the applicable share class and may also be obtained from your Intermediary
or from Goldman Sachs by calling the number on the back cover of the
Prospectus.
What Else Should I
Know About Share Purchases?
The Trust
reserves the right to:
◼
Refuse to
open an account or require an Intermediary 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 a 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 a Fund.
◼
Close a
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.
38
Shareholder
Guide
◼
Modify the
manner in which shares are offered.
◼
Modify the
sales charge rate applicable to future purchases of shares.
Shares of
the Funds are only registered for sale in the United States and certain of its
territories. Generally, shares of the Funds 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”).
A Fund may
allow you to purchase shares through an Intermediary 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 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.
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 a 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 Funds 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 Funds. Applications without the required information
may not be accepted by the Funds. Throughout the life of your account, the Funds
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 Funds 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 Funds; or (iii)
involuntarily redeem an investor’s shares and close an account in the event that
the Funds are unable to verify an investor’s identity or are unable to obtain
all required information. The Funds and their 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 a Fund’s next-determined NAV per share (as
adjusted for any applicable sales charge) after the Transfer Agent (or, if
applicable, an Authorized Institution) has received and accepted your order in
proper form. The price you receive when you sell shares is a Fund’s
next-determined NAV per share (adjusted for any applicable CDSCs) after the
Transfer Agent (or, if applicable, an Authorized Institution) has received and
accepted your order in proper form, with the redemption proceeds reduced by any
applicable charges (e.g., CDSCs). 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 |
A Fund’s
investments for which market quotations are readily available are valued at
market value on the basis of quotations provided by pricing sources. If accurate
quotations are not readily available, if the Funds’ fund accounting agent is
unable for other reasons to facilitate pricing of individual securities or
calculate a Fund’s NAV, or if the Investment Adviser believes that such
quotations do not accurately reflect fair value, the fair value of the Funds’
investments may be determined in good faith under valuation procedures approved
by the Board of Trustees. Thus, such pricing may be based on subjective
judgments and it is possible that the prices resulting from such valuation
procedures may differ materially from the value realized on a sale. Cases where
there is no clear indication of the value of a 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 a 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.
39
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 a 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 a Fund’s NAV. Significant events that
could affect a large number of securities in a particular market may include,
but are not limited to: situations relating to one or more single issuers in a
market sector; significant fluctuations in U.S. or foreign markets; market
dislocations; market disruptions or unscheduled market closings; equipment
failures; natural or man made disasters or acts of God; armed conflicts;
governmental actions or other developments; as well as the same or similar
events which may affect specific issuers or the securities markets even though
not tied directly to the securities markets. Other significant events that could
relate to a single issuer may include, but are not limited to: corporate actions
such as reorganizations, mergers and buy-outs; corporate announcements,
including those relating to earnings, products and regulatory news; significant
litigation; ratings downgrades; bankruptcies; and trading limits or
suspensions.
One effect
of using an independent third-party pricing (fair value) service and fair
valuation may be to reduce stale pricing arbitrage opportunities presented by
the pricing of Fund shares. However, it involves the risk that the values used
by a 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 a 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 a 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 a Fund for
purchase, redemption and exchange transactions if the Federal Reserve wire
payment system is open. To learn whether a 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 a Fund is closed. As a
result, if a Fund holds foreign securities, its NAV may be impacted on days when
investors may not purchase or redeem Fund shares.
Each Fund
relies on various sources to calculate its NAV. The ability of a 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 a Fund’s NAV and/or the inability to
calculate NAV over extended time periods. A Fund may be unable to recover any
losses associated with such failure. In addition, if the third-party service
providers and/or data sources upon which a 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.
40
Shareholder
Guide
|
Common
Questions Applicable to the Purchase of
Class
A Shares |
What Is The Offering
Price Of Class A Shares?
The
offering price of Class A Shares of each Fund is the next determined NAV per
share plus an initial sales charge paid to Goldman Sachs at the time of purchase
of shares. The sales
charge varies depending upon the amount you purchase. In some cases, described
below, the initial sales charge may be eliminated altogether, and the offering
price will be the NAV per share. The current sales charges and commissions paid
to Intermediaries for Class A Shares of the Funds are as follows:
|
Amount
of Purchase
(including
sales charge, if any) |
Sales
Charge as
Percentage
of
Offering
Price |
Sales
Charge
as
Percentage
of
Net Amount
Invested |
Maximum
Dealer
Allowance
as
Percentage
of
Offering
Price* |
|
Less
than $50,000 |
5.50% |
5.82% |
5.00% |
|
$50,000
up to (but less than) $100,000 |
4.75 |
4.99 |
4.00 |
|
$100,000
up to (but less than) $250,000 |
3.75 |
3.90 |
3.00 |
|
$250,000
up to (but less than) $500,000 |
2.75 |
2.83 |
2.25 |
|
$500,000
up to (but less than) $1 million |
2.00 |
2.04 |
1.75 |
|
$1
million or more |
0.00** |
0.00** |
*** |
*
Dealer’s
allowance may be changed periodically. During special promotions, the entire
sales charge may be reallowed to Intermediaries. Intermediaries to whom
substantially the entire sales charge is reallowed may be deemed to be
“underwriters” under the Securities Act.
**
No
sales charge is payable at the time of purchase of Class A Shares of $1 million
or more, but a CDSC of 1.00% may be imposed in the event of certain redemptions
within 18 months. For more information about Class A Shares’ CDSCs, please see
“What Else Do I Need To Know About Class A Shares’ CDSC?” below.
***
The
Distributor may pay a one-time commission to Intermediaries who initiate or are
responsible for purchases of $1 million or more of shares of the Funds equal to
1.00% of the amount under $3 million, 0.50% of the next $2 million, and 0.25%
thereafter. In instances where this one-time commission is not paid to a
particular Intermediary (including Goldman Sachs’ Private Wealth Management
Unit), the CDSC on Class A Shares, generally, will be waived. The Distributor
may also pay, with respect to all or a portion of the amount purchased, a
commission in accordance with the foregoing schedule to Intermediaries who
initiate or are responsible for purchases by Employee Benefit Plans investing in
the MLP Energy Infrastructure Fund which satisfy the criteria set forth below in
“When Are Class A Shares Not Subject To A Sales Load?” or $1 million or more by
certain “wrap” accounts. Purchases by such plans will be made at NAV with no
initial sales charge, but if shares are redeemed within 18 months, a CDSC of
1.00% may be imposed upon the plan, the plan sponsor or the third-party
administrator. In addition, Intermediaries will remit to the Distributor such
payments received in connection with “wrap” accounts in the event that shares
are redeemed within 18 months.
Different
Intermediaries may impose different sales charges. These variations are
described in Appendix C—Additional Information About Sales Charge Variations,
Waivers and Discounts.
You should
note that the actual sales charge that appears in your mutual fund transaction
confirmation may differ slightly from the rate disclosed above in the Prospectus
due to rounding calculations.
As
indicated in the preceding chart, and as discussed further below and in the
section titled “How Can The Sales Charge On Class A Shares Be Reduced?” and in
Appendix C—Additional Information About Sales Charge Variations, Waivers and
Discounts, you may, under certain circumstances, be entitled to pay reduced
sales charges on your purchases of Class A Shares or have those charges waived
entirely. To take advantage of these discounts, your Intermediary must notify
the Funds’ Transfer Agent at the time of your purchase order that a discount may
apply to your current purchases. You may also be required to provide appropriate
documentation to receive these discounts, including:
(i)
Information
or records regarding shares of the Funds or other Goldman Sachs Funds held in
all accounts (e.g., retirement accounts) of the shareholder at all
Intermediaries; or
(ii)
Information
or records regarding shares of the Funds or other Goldman Sachs Funds held at
any Intermediary by related parties of the shareholder, such as members of the
same family or household.
What Else Do I Need
To Know About Class A Shares’ CDSC?
Purchases
of $1 million or more of Class A Shares will be made at NAV with no initial
sales charge. However, if you redeem shares within 18 months after the beginning
of the month in which the purchase was made, a CDSC of 1.00% may be imposed. The
CDSC may not be imposed if your Intermediary agrees with the Distributor to
return all or an applicable prorated portion of its commission to the
Distributor. The CDSC is waived on redemptions in certain circumstances. See “In
What Situations May The CDSC On Class A Or C Shares Be Waived Or Reduced?” below
and, if you hold shares through an Intermediary, see Appendix C—Additional
Information About Sales Charge Variations, Waivers and Discounts.
41
When Are Class A
Shares Not Subject To A Sales Load?
Class A
Shares of the Funds may be sold at NAV without payment of any sales charge to
the following individuals and entities:
◼
Goldman
Sachs, its affiliates or their respective officers, partners, directors or
employees (including retired employees and former partners), any partnership of
which Goldman Sachs is a general partner, any Trustee or officer of the Trust
and designated family members of any of these individuals;
◼
Qualified
employee benefit plans of Goldman Sachs;
◼
Trustees or
directors of investment companies for which Goldman Sachs or an affiliate acts
as sponsor;
◼
Any
employee or registered representative of any Intermediary (or such
Intermediaries’ affiliates and subsidiaries) or their respective spouses or
domestic partners, children and parents;
◼
Banks,
trust companies or other types of depository institutions;
◼
Any state,
county or city, or any instrumentality, department, authority or agency thereof,
which is prohibited by applicable investment laws from paying a sales charge or
commission in connection with the purchase of shares of a Fund;
◼
Employee
Benefit Plans other than Employee Benefit Plans that purchase Class A Shares
through brokerage relationships in which sales charges are customarily imposed.
Under such circumstances, Plans will be assessed sales charges as described
further in “Shareholder Guide—Common Questions Applicable to the Purchase of
Class A Shares;”
◼
Investors
who purchase Class A Shares through an omnibus account sponsored by an
Intermediary that has an agreement with the Distributor covering such investors
to offer Class A Shares without charging an initial sales charge;
◼
Insurance
company separate accounts that make the Funds available as an underlying
investment in certain group annuity contracts;
◼
“Wrap”
accounts for the benefit of clients of broker-dealers, financial institutions or
financial planners, provided they have entered into an agreement with GSAM
specifying aggregate minimums and certain operating policies and
standards;
◼
Investment
advisers investing for accounts for which they receive asset-based
fees;
◼
Accounts
over which GSAM or its advisory affiliates have investment
discretion;
◼
Shareholders
who roll over distributions from any tax-qualified Employee Benefit Plan or
tax-sheltered annuity to an IRA which invests in the Goldman Sachs Funds if the
tax-qualified Employee Benefit Plan or tax-sheltered annuity receives
administrative services provided by certain third party administrators that have
entered into a special service arrangement with Goldman Sachs relating to such
plan or annuity;
◼
State
sponsored 529 college savings plans;
◼
Investors
that purchase Class A Shares through the GS Retirement Plan Plus and Goldman
Sachs 401(k) Programs;
◼
Former
shareholders of certain funds who (i) received shares of a Goldman Sachs Fund in
connection with a reorganization of an acquired fund into a Goldman Sachs Fund,
(ii) had previously qualified for purchases of Class A Shares of the acquired
funds without the imposition of a sales load under the guidelines of the
applicable acquired fund family, and (iii) as of August 24, 2012 held their
Goldman Sachs Fund shares directly with the Goldman Sachs Funds’ Transfer Agent,
as long as they continue to hold the shares directly at the Transfer
Agent.
◼
Investors
who purchase Class A Shares in accounts that are no longer associated with an
Intermediary and held direct at the Transfer Agent, including retirement
accounts.
You
must certify eligibility for any of the above exemptions on your account
application and notify your Intermediary and the Funds if you no longer are
eligible for the exemption. You may be eligible for different or additional
exemptions based on your Intermediary; see Appendix C—Additional Information
About Sales Charge Variations, Waivers and Discounts.
A Fund will
grant you an exemption subject to confirmation of your eligibility by your
Intermediary. You may be charged a fee by your Intermediary.
How Can The Sales
Charge On Class A Shares Be Reduced?
◼
Right
of Accumulation: When buying
Class A Shares in Goldman Sachs Funds, your current aggregate investment
determines the initial sales load you pay. You may qualify for reduced sales
charges when the current market value of holdings across Class A Shares and/or
Class C Shares, plus new purchases, reaches $50,000 or more. Class A Shares
and/or Class C Shares of any of the Goldman Sachs Funds may be combined under
the Right of Accumulation. If a Fund’s Transfer Agent is properly notified, the
“Amount of Purchase” in the chart in the section “What Is The Offering Price Of
Class A Shares?” will be deemed to include all Class A Shares and/or Class C
Shares of the Goldman Sachs Funds that were held at the time of purchase by any
of the following persons: (i) you, your spouse or domestic partner, your parents
and your children; and (ii) any trustee, guardian or other fiduciary of a single
trust estate or a single fiduciary account. This includes, for example, any
Class A Shares and/or Class C Shares held at an Intermediary other than the one
handling your current purchase. For purposes of applying the Right of
Accumulation, shares of the Funds and any other Goldman Sachs Funds purchased by
an existing client of Goldman Sachs Private Wealth Management or GS Ayco Holding
LLC will be combined with Class A Shares and/or Class C Shares and other assets
held by all other Goldman Sachs Private Wealth Management accounts or accounts
of GS Ayco Holding LLC, respectively. In addition, under some circumstances,
Class A Shares and/or Class C Shares of the Funds and Class A Shares and/or
Class C Shares of any other Goldman Sachs Fund
42
Shareholder
Guide
purchased
by partners, directors, officers or employees of certain organizations may be
combined for the purpose of determining whether a purchase will qualify for the
Right of Accumulation and, if qualifying, the applicable sales charge level. To
qualify for a reduced sales load, you or your Intermediary must notify the
Funds’ Transfer Agent at the time of investment that a quantity discount is
applicable. If you do not notify your Intermediary at the time of your current
purchase or a future purchase that you qualify for a quantity discount, you may
not receive the benefit of a reduced sales charge that might otherwise apply.
Use of this option is subject to a check of appropriate records.
In some
circumstances, other Class A Shares and/or Class C Shares may be aggregated with
your current purchase under the Right of Accumulation as described in the SAI.
For purposes of determining the “Amount of Purchase,” all Class A Shares and/or
Class C Shares currently held will be valued at their current market
value.
◼
Statement
of Intention: You may
obtain a reduced sales charge by means of a written Statement of Intention which
expresses your non-binding commitment to invest (not counting reinvestments of
dividends and distributions) in the aggregate $50,000 or more within a period of
13 months in Class A Shares of one or more of the Goldman Sachs Funds. Any
investments you make during the period will receive the discounted sales load
based on the full amount of your investment commitment. Purchases made during
the previous 90 days may be included; however, capital appreciation does not
apply toward these combined purchases. If the investment commitment of the
Statement of Intention is not met prior to the expiration of the 13-month
period, the entire amount will be subject to the higher applicable sales charge
unless the failure to meet the investment commitment is due to the death of the
investor. By selecting the Statement of Intention, you authorize the Transfer
Agent to escrow and redeem Class A Shares in your account to pay this additional
charge if the Statement of Intention is not met. You must, however, inform the
Transfer Agent (either directly or through your Intermediary) that the Statement
of Intention is in effect each time shares are purchased. Each purchase will be
made at the public offering price applicable to a single transaction of the
dollar amount specified on the Statement of Intention. The SAI has more
information about the Statement of Intention, which you should read
carefully.
Different
Intermediaries may have different policies regarding Rights of Accumulation and
Statements of Intention. These variations are described in Appendix C—Additional
Information About Sales Charge Variations, Waivers and Discounts.
|
Common
Questions Applicable to the Purchase Of Class C
Shares |
What Is The Offering
Price Of Class C Shares?
You may
purchase Class C Shares of the Fund at the next determined NAV without paying an
initial sales charge. However, if you redeem Class C Shares within 12 months of
purchase, a CDSC of 1.00% will normally be deducted from the redemption
proceeds. In connection with purchases by Employee Benefit Plans, where Class C
Shares are redeemed within 12 months of purchase, a CDSC of 1.00% may be imposed
upon the plan sponsor or third party administrator. Class C Shares acquired in
exchange for shares subject to a CDSC will be subject to the CDSC, if any, of
the shares originally held. No CDSC is imposed in connection with an exchange of
Class C Shares at the time of such exchange. When Class C Shares are exchanged
for Class C Shares of another fund, the period of time that such shares will be
subject to a CDSC (if any) will be measured as of the date of the original
purchase. With respect to such shares held by Employee Benefit Plans, the CDSC
may be imposed on the plan sponsor or third party administrator.
Different
Intermediaries may impose different sales charges. These variations are
described in “Appendix C—Additional Information About Sales Charge Variations,
Waivers and Discounts.”
Proceeds
from the CDSC are payable to the Distributor and may be used in whole or in part
to defray the Distributor’s expenses related to providing distribution-related
services to the Fund in connection with the sale of Class C Shares, including
the payment of compensation to Intermediaries. A commission equal to 1% of the
amount invested is normally paid by the Distributor to
Intermediaries.
What Should I Know
About The Automatic Conversion Of Class C Shares?
Class C
Shares of the Fund will automatically convert into Class A Shares (which bear
lower distribution and service (12b-1) fees and do not bear additional personal
and account maintenance services fees) of the same Fund on or about the
fifteenth day of the last month of the quarter that is eight years after the
purchase date. No sales charges or other charges will apply in connection with
any conversion.
If you
acquire Class C Shares of the Fund by exchange from Class C Shares of another
Goldman Sachs Fund, your Class C Shares will convert into Class A Shares of such
Fund based on the date of the initial purchase. If you acquire Class C Shares
through reinvestment of distributions, your Class C Shares will convert into
Class A Shares based on the date of the initial purchase of the shares on which
the distribution was paid.
43
Shareholders
will not recognize a gain or loss for federal income tax purposes upon the
conversion of Class C Shares for Class A Shares of the same Fund. The automatic
conversion of Class C Shares to Class A Shares will not apply to shares held
through group retirement plan recordkeeping platforms of certain Intermediaries
who hold such shares in an omnibus account and do not track participant level
share lot aging to facilitate such a conversion.
New
employee benefit plans are not eligible to purchase Class C Shares. Employee
benefit plans which had this share class of the Fund available to participants
on or before September 18, 2018, may continue to open accounts for new
participants in such share class of the Fund and purchase additional shares in
existing participant accounts.
If you
purchased your shares through an Intermediary, it is the responsibility of your
Intermediary to work with the Transfer Agent to effect the conversion and to
ensure that Class C Shares are automatically converted after the appropriate
period of time. In addition, if your shares are no longer subject to a CDSC, you
may be able to exchange your Class C Shares for Class A Shares without the
payment of a sales charge prior to the automatic conversion subject to the
policies and procedures of the Intermediary through whom you have purchased your
shares. Please contact your Intermediary with questions regarding your
eligibility to exchange Class C Shares for Class A Shares.
|
Common
Questions Applicable to the Purchase Of
Class
A and C Shares |
What Else Do I Need
To Know About The CDSC On Class A Or C Shares?
◼
The CDSC is
based on the lesser of the NAV of the shares at the time of redemption or the
original offering price (which is the original NAV).
◼
No CDSC is
charged on shares acquired from reinvested dividends or capital gains
distributions.
◼
No CDSC is
charged on the per share appreciation of your account over the initial purchase
price.
◼
When
counting the number of months since a purchase of Class A or Class C Shares was
made, all purchases made during a month will be combined and considered to have
been made on the first day of that month.
◼
To keep
your CDSC as low as possible, each time you place a request to sell shares, the
Fund will first sell any shares in your account that do not carry a CDSC and
then the shares in your account that have been held the longest.
In What Situations
May The CDSC On Class A Or C Shares Be Waived Or Reduced?
The CDSC on
Class A and Class C Shares that are subject to a CDSC may be waived or reduced
if the redemption relates to:
◼
Mandatory
retirement distributions or loans to participants or beneficiaries from Employee
Benefit Plans;
◼
Hardship
withdrawals by a participant or beneficiary in an Employee Benefit
Plan;
◼
The
separation from service by a participant or beneficiary in an Employee Benefit
Plan;
◼
Excess
contributions distributed from an Employee Benefit Plan;
◼
Distributions
from a qualified Employee Benefit Plan invested in the Goldman Sachs Funds which
are being rolled over to an IRA in the same share class of a Goldman Sachs
Fund;
◼
The death
or disability (as defined in Section 72(m)(7) of the Internal Revenue Code of
1986, as amended (the “Code”)) of a shareholder, participant or beneficiary in
an Employee Benefit Plan;
◼
Satisfying
the minimum distribution requirements of the Code;
◼
Establishing
“substantially equal periodic payments” as described under Section 72(t)(2) of
the Code;
◼
Redemption
proceeds which are to be reinvested in accounts or non-registered products over
which GSAM or its advisory affiliates have investment discretion;
◼
A
systematic withdrawal plan. The Fund reserves the right to limit such
redemptions, on an annual basis, to 12% of the value of your Class C Shares and
10% of the value of your Class A Shares;
◼
Redemptions
or exchanges of Fund shares held through an Employee Benefit Plan using the Fund
as part of a qualified default investment alternative or “QDIA”; or
◼
Other
redemptions, at the discretion of the Trust’s officers, relating to shares
purchased through Employee Benefit Plans.
You
may be eligible for different or additional exemptions based on your
Intermediary; see “Appendix C—Additional Information About Sales Charge
Variations, Waivers and Discounts.”
44
Shareholder
Guide
|
How
To Sell Shares |
How Can I Sell Shares
Of The Fund?
Generally,
Shares may be sold (redeemed) only through Intermediaries. Customers of an
Intermediary will normally give their redemption instructions to the
Intermediary, and the Intermediary will, in turn, place the order with 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 (subject
to any applicable CDSC) after the Transfer Agent (or, if applicable, the
Authorized Institution) 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
(through your Intermediary), in writing or by telephone (unless the Intermediary
opts out of the telephone redemption privilege on the account application). You
should contact your Intermediary to discuss redemptions and redemption proceeds.
The Fund may transfer redemption proceeds to an account with your Intermediary.
In the alternative, your Intermediary may request that redemption proceeds be
sent to you by check or wire (if the wire instructions are designated in the
current records of the Transfer Agent).
When Do I Need A
Medallion Signature Guarantee To Redeem Shares?
Generally,
a redemption request must be in writing and signed by an authorized person with
a Medallion signature guarantee if:
◼
A request
is made in writing to redeem Class A, Class C, Investor or Class R Shares in an
amount over $50,000 via check;
◼
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 Intermediary to
verify instructions. Additional documentation may be required.
What Do I Need To
Know About Telephone Redemption Requests?
The Trust,
the Distributor and the Transfer Agent will not be liable for any loss 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. Thus, you risk possible losses if a telephone redemption is not
authorized by you.
In an
effort to prevent unauthorized or fraudulent redemption and exchange requests by
telephone, Goldman Sachs and 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 Intermediary. If your Shares are held in an
account with an Intermediary, 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.
◼
The Fund
may allow redemptions via check up to $50,000 in Class A, Class C, Investor and
Class R Shares requested via telephone.
Note:
It may be difficult to make telephone redemptions in times of unusual economic
or market conditions.
45
How Are Redemption
Proceeds Paid?
By
Wire: You may
arrange for your redemption proceeds to be paid as federal funds to an account
with your Intermediary 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 your
Intermediary. 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 your
Intermediary) 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 or purchased by Automated Clearing
House (“ACH”), the Fund will pay you when your check or ACH has cleared, which
may take up to 15 days.
◼
If the
Federal Reserve Bank is closed on the day that the redemption proceeds would
ordinarily be wired, wiring the redemption proceeds may be delayed until the
Federal Reserve Bank reopens.
◼
To change
the bank wiring instructions designated in the current records of the Transfer
Agent, you must send written instructions signed by an authorized person
designated in the current records of the Transfer Agent. A Medallion signature
guarantee may be required if you are requesting a redemption in conjunction with
the change.
◼
None of the
Trust, the Investment Adviser or Goldman Sachs assumes any responsibility for
the performance of your bank or Intermediary in the transfer process. If a
problem with such performance arises, you should deal directly with your bank or
Intermediary.
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 Intermediary)
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
or ACH, the Fund will pay you when your check or ACH 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.
◼
Intermediaries
are responsible for the timely transmittal of redemption requests by their
customers to the Transfer Agent. In order to facilitate the timely transmittal
of redemption requests, Intermediaries may set times by which they must receive
redemption requests. Intermediaries may also require additional documentation
from you.
The Trust
reserves the right to:
◼
Redeem your
shares in the event your Intermediary’s relationship with Goldman Sachs is
terminated, and you do not transfer your account to another Intermediary or in
the event that the Fund is no longer an option in your Employee Benefit Plan or
no longer available through your Eligible Fee-Based Program.
◼
Redeem your
shares if your account balance is below the required Fund minimum. The Fund will
not redeem your shares on this basis if the value of your account falls below
the minimum account balance solely as a result of market conditions. The Fund
will give you 60 days prior written notice to allow you to purchase sufficient
additional shares of the Fund in order to avoid such redemption. Different rules
may apply to investors who have established brokerage accounts with Goldman
Sachs in accordance with the terms and conditions of their account
agreements.
◼
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
46
Shareholder
Guide
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.
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 or Goldman Sachs will be responsible for any loss
in an investor’s account or tax liability resulting from an involuntary
redemption.
Can I Reinvest
Redemption Proceeds In The Same Or Another Goldman Sachs Fund?
You may
redeem shares of the Fund and reinvest a portion or all of the redemption
proceeds in the same share class of another Goldman Sachs Fund at NAV. To be
eligible for this privilege, you must have held the shares you want to redeem
for at least 30 days and you must reinvest the share proceeds within 90 days
after you redeem. You should obtain and read the applicable prospectus before
investing in any other Goldman Sachs Fund.
You may
reinvest redemption proceeds as follows:
◼
If you pay
a CDSC upon redemption of Class A or Class C Shares and then reinvest in Class A
or Class C Shares of another Goldman Sachs Fund as described above, your account
will be credited with the amount of the CDSC you paid. The reinvested shares
will, however, continue to be subject to a CDSC. The holding period of the
shares acquired through reinvestment will include the holding period of the
redeemed shares for purposes of computing the CDSC payable upon a subsequent
redemption.
◼
The
reinvestment privilege may be exercised at any time in connection with
transactions in which the proceeds are reinvested at NAV in a tax-sheltered
Employee Benefit Plan. In other cases, the reinvestment privilege may be
exercised once per year upon receipt of a written request.
◼
You may be
subject to tax as a result of a redemption. You should consult your tax adviser
concerning the tax consequences of a redemption and reinvestment.
Can I Exchange My
Investment From One Goldman Sachs Fund To Another Goldman Sachs
Fund?
You may
exchange shares of a Goldman Sachs Fund at NAV without the imposition of an
initial sales charge or CDSC, if applicable, at the time of exchange for certain
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 your Intermediary to arrange for exchanges of shares of the Fund for
shares of another Goldman Sachs Fund.
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.
◼
The
exchanged shares of the new Goldman Sachs Fund may later be exchanged for shares
of the same class of the original Fund held at the next determined NAV without
the imposition of an initial sales charge or CDSC. However, if additional shares
of the new Goldman Sachs Fund were purchased after the initial exchange, and
that Fund’s shares do not impose a sales charge or CDSC, then the applicable
sales charge or CDSC of the original Fund’s shares will be imposed upon the
exchange of those shares.
◼
When you
exchange shares subject to a CDSC, no CDSC will be charged at that time.
However, for purposes of determining the amount of CDSC applicable to those
shares acquired in the exchange, the length of time you have owned the shares
will be measured from the date you acquired the original shares subject to a
CDSC, and the amount and terms of the CDSC will be those applicable to the
original shares acquired and will not be affected by a subsequent
exchange.
◼
Eligible
investors may exchange certain classes of shares for another class of shares of
the same Fund. For further information, contact your Intermediary.
◼
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.
47
◼
Goldman
Sachs 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. Exchanges within Employee Benefit Plan accounts will not result in
capital gains or loss for federal or state income tax purposes. You should
consult your tax adviser concerning the tax consequences of an
exchange.
|
Shareholder
Services |
Can I Arrange To Have
Automatic Investments Made On A Regular Basis?
You may be
able to make automatic investments in Class A and Class C Shares through your
bank via ACH transfer or via bank draft or through your Intermediary each month.
The minimum dollar amount for this service is $250 for the initial investment
and $50 per month for additional investments. Forms for this option are
available online at www.gsamfunds.com and from your Intermediary, or you may
check the appropriate box on the account application.
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.
Can I Arrange To Have
Automatic Exchanges Made On A Regular Basis?
You may
elect to exchange automatically a specified dollar amount of Class A or Class C
Shares of the Fund for shares of the same class of other Goldman Sachs
Funds.
◼
Shares will
be purchased at NAV if a sales charge had been imposed on the initial
purchase.
◼
You may
elect to exchange into an identically registered account or a similarly
registered account provided that at least one name on the account is registered
identically.
◼
Shares
subject to a CDSC acquired under this program may be subject to a CDSC at the
time of redemption from the Goldman Sachs Fund into which the exchange is made
depending upon the date and value of your original purchase.
◼
Automatic
exchanges are made monthly on the 15th day of each month or the first business
day thereafter.
◼
Minimum
dollar amount: $50 per month.
◼
You cannot
make automatic exchanges 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 automatic
exchanges are made.
◼
An exchange
is considered a redemption and a purchase and therefore may be a taxable
transaction.
Can I Have Systematic
Withdrawals Made On A Regular Basis?
You may
redeem from your Class A or Class C Share account systematically via check or
ACH transfer or through your Intermediary in any amount of $50 or
more.
◼
It is
normally undesirable to maintain a systematic withdrawal plan at the same time
that you are purchasing additional Class A or Class C Shares because of the
sales charges that are imposed on certain purchases of Class A Shares and
because of the CDSCs that are imposed on certain redemptions of Class A and
Class C Shares.
◼
Checks are
normally mailed within two business days after your selected systematic
withdrawal date of either the 15th or 25th of the month. ACH payments may take
up to three business days to post to your account after your selected systematic
withdrawal date between, and including, the 3rd and 26th of the
month.
◼
Each
systematic withdrawal is a redemption and therefore may be a taxable
transaction.
48
Shareholder
Guide
◼
The CDSC
applicable to Class A or Class C Shares redeemed under the systematic withdrawal
plan may be waived. The Fund reserves the right to limit such redemptions, on an
annual basis, to 12% each of the value of your Class C Shares and 10% of the
value of your Class A Shares.
What Types Of Reports
Will I Be Sent Regarding My Investment?
Intermediaries
are 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 their customers for such services.
You will be
provided with a printed confirmation of each transaction in your account and a
quarterly account statement if you invest in Class A, Class C, Investor or Class
R Shares and a monthly account statement if you invest in Institutional or Class
R6 Shares. If your account is held through your Intermediary, you will receive
this information from your Intermediary.
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 your Intermediary
or Goldman Sachs Funds at the appropriate phone number or address found on the
back cover of the Prospectus. The Fund will begin sending individual copies to
you within 30 days after receipt of your revocation. If your account is held
through an Intermediary, please contact the Intermediary to revoke your
consent.
|
Distribution
and Service Fees |
What Are The
Different Distribution And/Or Service Fees Paid By The Fund’s
Shares?
The Trust
has adopted distribution and service plans (each a “Plan”) under which Class A,
Class C and Class R Shares bear distribution and/or service fees paid to Goldman
Sachs, some of which Goldman Sachs may pay to Intermediaries. Intermediaries
seek distribution and/or servicing fee revenues to, among other things, offset
the cost of servicing small and medium sized plan investors and providing
information about the Fund. If the fees received by Goldman Sachs pursuant to
the Plans exceed its expenses, Goldman Sachs may realize a profit from these
arrangements. Goldman Sachs generally receives and pays the distribution and
service fees on a quarterly basis.
Under the
Plans, Goldman Sachs is entitled to a monthly fee from the Fund for distribution
services equal, on an annual basis, to 0.25%, 0.75% and 0.50% of the Fund’s
average daily net assets attributed to Class A, Class C and Class R Shares,
respectively. Because these fees are paid out of the Fund’s assets on an ongoing
basis, over time, these fees will increase the cost of your investment and may
cost you more than paying other types of such charges.
The
distribution fees are subject to the requirements of Rule 12b-1 under the
Investment Company Act, and may be used (among other things) for:
◼
Compensation
paid to and expenses incurred by Intermediaries, Goldman Sachs and their
respective officers, employees and sales representatives;
◼
Commissions
paid to Intermediaries;
◼
Allocable
overhead;
◼
Telephone
and travel expenses;
◼
Interest
and other costs associated with the financing of such compensation and
expenses;
◼
Printing of
prospectuses for prospective shareholders;
◼
Preparation
and distribution of sales literature or advertising of any type; and
◼
All other
expenses incurred in connection with activities primarily intended to result in
the sale of Class A, Class C and Class R Shares.
In
connection with the sale of Class C Shares, Goldman Sachs normally begins paying
the 0.75% distribution fee as an ongoing commission to Intermediaries after the
shares have been held for one year. Goldman Sachs normally begins accruing the
annual 0.25% and 0.50% distribution fees for the Class A and Class R Shares,
respectively, as ongoing commissions to Intermediaries, immediately. Goldman
Sachs generally pays the distribution fee on a quarterly basis.
49
|
Class
C Personal And Account Maintenance
Services
And Fees |
Under the
Class C Plan, Goldman Sachs is also entitled to receive a separate fee equal on
an annual basis to 0.25% of the Fund’s average daily net assets attributed to
Class C Shares. This fee is for personal and account maintenance services, and
may be used to make payments to Goldman Sachs, Intermediaries and their
officers, sales representatives and employees for responding to inquiries of,
and furnishing assistance to, shareholders regarding ownership of their shares
or their accounts or similar services not otherwise provided on behalf of the
Fund. If the fees received by Goldman Sachs pursuant to the Plan exceed its
expenses, Goldman Sachs may realize a profit from this arrangement.
In
connection with the sale of Class C Shares, Goldman Sachs normally begins paying
the 0.25% ongoing service fee to Intermediaries after the shares have been held
for one year.
|
Restrictions
on Excessive Trading
Practices |
Policies
and Procedures on Excessive Trading Practices. In
accordance with the policy adopted by the Board of Trustees, the Trust
discourages frequent purchases and redemptions of Fund shares and does not
permit market timing or other excessive trading practices. Purchases and
exchanges should be made with a view to longer-term investment purposes only
that are consistent with the investment policies and practices of the respective
Fund. Excessive, short-term (market timing) trading practices may disrupt
portfolio management strategies, increase brokerage and administrative costs,
harm Fund performance and result in dilution in the value of Fund shares held by
longer-term shareholders. The Trust and Goldman Sachs reserve the right to
reject or restrict purchase or exchange requests from any investor. The Trust
and Goldman Sachs will not be liable for any loss resulting from rejected
purchase or exchange orders. To minimize harm to the Trust and its shareholders
(or Goldman Sachs), the Trust (or Goldman Sachs) will exercise this right if, in
the Trust’s (or Goldman Sachs’) judgment, an investor has a history of excessive
trading or if an investor’s trading, in the judgment of the Trust (or Goldman
Sachs), has been or may be disruptive to the Fund. In making this judgment,
trades executed in multiple accounts under common ownership or control may be
considered together to the extent they can be identified. No waivers of the
provisions of the policy established to detect and deter market timing and other
excessive trading activity are permitted that would harm the Trust or its
shareholders or would subordinate the interests of the Trust or its shareholders
to those of Goldman Sachs or any affiliated person or associated person of
Goldman Sachs.
As a
deterrent to excessive trading, many foreign equity securities held by the
Goldman Sachs Funds are priced by an independent pricing service using fair
valuation. For more information on fair valuation, please see “How To Buy
Shares—How Are Shares Priced?”
Pursuant to
the policy adopted by the Board of Trustees of the Trust, Goldman Sachs has
developed criteria that it uses to identify trading activity that may be
excessive. Excessive trading activity in the Fund is measured by the number of
“round trip” transactions in a shareholder’s account. A “round trip” includes a
purchase or exchange into the Fund followed or preceded by a redemption or
exchange out of the same Fund. If the Fund detects that a shareholder has
completed two or more round trip transactions in a single Fund within a rolling
90-day period, the Fund may reject or restrict subsequent purchase or exchange
orders by that shareholder permanently. In addition, the Fund may, in its sole
discretion, permanently reject or restrict purchase or exchange orders by a
shareholder if the Fund detects other trading activity that is deemed to be
disruptive to the management of the Fund or otherwise harmful to the Fund. For
purposes of these transaction surveillance procedures, the Fund may consider
trading activity in multiple accounts under common ownership, control, or
influence. A shareholder that has been restricted from participation in the Fund
pursuant to this policy will be allowed to apply for re-entry after one year. A
shareholder applying for re-entry must provide assurances acceptable to the Fund
that the shareholder will not engage in excessive trading activities in the
future.
Goldman
Sachs may modify its surveillance procedures and criteria from time to time
without prior notice regarding the detection of excessive trading or to address
specific circumstances. Goldman Sachs will apply the criteria in a manner that,
in Goldman Sachs’ judgment, will be uniform.
Fund shares
may be held through omnibus arrangements maintained by 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,
50
Shareholder
Guide
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.
51
Taxation
MLP Energy
Infrastructure Fund
Certain
U.S. Federal Income Tax Matters. The
following is a general summary of certain U.S. federal income tax considerations
affecting the Fund and investors in the Fund. This discussion does not purport
to be complete or to deal with all aspects of federal income taxation that may
be relevant to you in light of your particular circumstances or to investors who
are subject to special rules, such as banks, thrift institutions and certain
other financial institutions, real estate investment trusts, regulated
investment companies, insurance companies, brokers and dealers in securities or
currencies, certain securities traders, S corporations, individual retirement
accounts, certain tax-deferred accounts or foreign investors.
Unless
otherwise noted, this discussion assumes that you are a U.S. Shareholder and
that you hold Fund shares as capital assets. For purposes of this summary, a
“U.S. Shareholder” means a beneficial owner of the Fund’s shares that, for U.S.
federal income tax purposes, is (i) an individual who is a citizen or resident
of the U.S., (ii) a corporation or other entity taxable as a corporation created
in or organized under the laws of the U.S. or any state of the U.S., (iii) an
estate the income of which is subject to U.S. federal income tax regardless of
its source, or (iv) a trust if (A) a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more U.S. persons
have the authority to control all substantial decisions of such trust or (B) the
trust has a valid election in effect under applicable Treasury regulations to be
treated as a U.S. person. If a partnership holds shares, the U.S. federal income
tax treatment of a partner in such partnership generally will depend upon the
status of the partner and the activities of the partnership. Partners of
partnerships that hold shares should consult their tax advisors.
The
following discussion is based upon the Code, Treasury Regulations, judicial
authorities, published positions of the IRS and other applicable authorities,
all as in effect on the date of the Prospectus and all of which are subject to
change or differing interpretations (possibly with retroactive effect). No
ruling has been or will be sought from the IRS regarding any matter discussed in
the Prospectus. Counsel to the Fund has not rendered any legal opinion regarding
any tax consequences relating to the Fund or your investment in the Fund. No
assurance can be given that the IRS would not assert, or that a court would not
sustain, a position contrary to any of the tax information set out
below.
Tax matters
are complicated, and the tax consequences of an investment in and holding of the
Fund’s shares will depend on the particular facts of each investor’s situation.
You are advised to consult your own tax advisors with respect to the application
to your own circumstances of the general federal income tax rules described
below and with respect to other federal, state, local or foreign tax
consequences to you before making an investment in the Fund’s
shares.
Federal
Income Taxation of the Fund. Although
the Code generally provides that a regulated investment company does not pay an
entity-level income tax, provided that it distributes all or substantially all
of its income, the Fund does not meet current tests for qualification as a
regulated investment company under Subchapter M of the Code because of the fact
that most or substantially all of the Fund’s investments will consist of
investments in certain MLPs intended to be treated as partnerships for federal
income tax purposes. The regulated investment company tax rules therefore do not
apply to the Fund or to its shareholders. As a result, the Fund is treated as a
corporation for federal and state income tax purposes, and will pay federal and
state income tax on its taxable income.
The Fund
invests primarily in MLPs, which generally are intended to be treated as
partnerships for federal income tax purposes. As a partner in the MLPs, the Fund
must report its allocable share of the MLPs’ taxable income or loss in computing
the Fund’s taxable income or loss, regardless of the extent (if any) to which
the MLPs make distributions. In addition, sales of MLP investments will result
in allocations to the Fund of taxable ordinary income or loss and capital gain
or loss, each in amounts that will not be reported to the Fund until the
following year, in magnitudes often not readily estimable before such reporting
is made. Based upon a review of the historic results of the type of MLPs in
which the Fund intends to invest, the Fund expects that the cash flow received
by the Fund with respect to its MLP investments will generally exceed the
taxable income allocated to the Fund (and this excess generally will not be
currently taxable to the Fund but, rather, will result in a reduction of the
Fund’s adjusted tax basis in each MLP as described in the following paragraph).
This is the result of a variety of factors, including significant non-cash
deductions, such as accelerated depreciation. Past performance is not
necessarily an indication of future results and there is no assurance that the
Fund’s expectation regarding the tax character of MLP distributions will be
realized. If this expectation is not realized and cash distributions are less
than the taxable income allocated to the Fund, there may be greater tax expense
borne by the Fund and less cash available to distribute to shareholders or to
pay to expenses.
The Fund
will be subject to U.S. federal income tax at the regular corporate income tax
rates on the Fund’s share of any taxable income from the investment in MLPs and
on gain recognized by the Fund on any sale of equity securities of an MLP. As
explained above, cash distributions from an MLP to the Fund that exceed the
Fund’s allocable share of such MLP’s net taxable income will reduce the Fund’s
adjusted tax basis in the equity securities of the MLP. These reductions in the
Fund’s adjusted tax basis in the MLP equity securities will increase the amount
of gain (or decrease the amount of loss) recognized by the Fund on a subsequent
sale of the securities of an MLP.
52
Taxation
Federal
Income Taxation of Holders of the Fund’s Shares—U.S. Shareholders.
Receipt of
Distributions. The Fund will make distributions that will be treated for U.S.
federal income tax purposes as (i) first, taxable dividends to the extent of
your allocable share of the Fund’s earnings and profits, (ii) second,
non-taxable returns of capital to the extent of your tax basis in your shares of
the Fund (for the portion of those distributions that exceed the Fund’s earnings
and profits) and (iii) third, taxable gains (for the balance of those
distributions). Dividend income will be treated as “qualified dividends” for
federal income tax purposes, subject to favorable capital gain tax rates,
provided that certain requirements are met. Unlike a regulated investment
company, the Fund will not be able to pass-through the character of its
recognized net capital gain by paying “capital gain dividends.” Although the
Fund expects that a significant portion of its distributions will be treated as
nontaxable return of capital, no assurance can be given in this regard. The
portion of the distribution received by a U.S. shareholder from the Fund that
constitutes a return of capital will decrease the U.S. shareholder’s tax basis
in his or her Fund shares (but not below zero), which will result in an increase
in the amount of gain (or decrease in the amount of loss) that will be
recognized by the U.S. shareholder for tax purposes on the later sale of such
Fund shares.
Distributions
made to you by the Fund (other than distributions in redemption of shares
subject to Section 302(b) of the Code) will generally constitute taxable
dividends to the extent of your allocable share of the Fund’s current or
accumulated earnings and profits, as calculated for federal income tax purposes.
Generally, a corporation’s earnings and profits are computed based upon taxable
income, with certain specified adjustments. As explained above, based upon the
historic performance of the types of MLPs in which the Fund intends to invest,
the Fund anticipates that the distributed cash from the MLPs generally will
exceed the Fund’s share of the MLPs’ taxable income. Consequently, the Fund
anticipates that only a portion of the Fund’s distributions will be treated as
dividend income to you. To the extent that distributions to you exceed your
allocable share of the Fund’s current and accumulated earnings and profits, your
basis in the Fund’s shares with respect to which the distribution is made will
be reduced, which will increase the amount of gain (or decrease the amount of
loss) realized upon a subsequent sale or redemption of such shares. To the
extent you hold such shares as a capital asset and have no further basis in the
shares to offset the distribution, you will report the excess as capital
gain.
Because the
Fund will invest a substantial portion of its assets in MLPs, special rules will
apply to the calculation of the Fund’s earnings and profits. For example, the
Fund’s earnings and profits will be calculated using the straight-line
depreciation method rather than the accelerated depreciation method. This
difference in treatment may, for example, result in the Fund’s earnings and
profits being higher than the Fund’s taxable income in a particular year if the
MLPs in which the Fund invests calculate their income using accelerated
depreciation. Because of these differences, the Fund may make distributions in a
particular year out of earnings and profits (treated as dividends) in excess of
the amount of the Fund’s taxable income for such year.
Distributions
to you from the Fund treated as dividends under the foregoing rules generally
will be taxable as ordinary income to you but are generally expected to be
treated as “qualified dividend income” to eligible taxpayers. Qualified dividend
income received by individuals and other noncorporate shareholders is taxed at
long-term capital gain rates, which currently reach a maximum of 15%, or, for
certain high income individuals, 20%. For a dividend to constitute qualified
dividend income, the shareholder generally must hold the shares paying the
dividend for more than 60 days during the 121-day period beginning 60 days
before the ex-dividend date, although a longer period may apply if the
shareholder engages in certain risk reduction transactions with respect to the
common stock.
In addition
to constituting qualified dividend income to noncorporate investors, such
dividends are expected to be eligible for the dividends received deduction
available to corporate shareholders of the Fund under Section 243 of the Code.
However, corporate shareholders of the Fund should be aware that certain
limitations apply to the availability of the dividends received deduction,
including rules which limit the deduction in cases where (i) certain holding
period requirements are not met, (ii) a corporate shareholder of the Fund is
obligated (e.g., pursuant to a short sale) to make related payments with respect
to positions in substantially similar or related property, or (iii) the
corporate shareholder’s investment in shares of the Fund is financed with
indebtedness. Corporate shareholders of the Fund should consult their own tax
advisors regarding the application of these limitations to their particular
situations.
If you
participate in the Fund’s automatic dividend reinvestment plan, upon the Fund’s
payment of a dividend to you, you will be treated for federal income tax
purposes as receiving a taxable distribution from the Fund in an amount equal to
the fair market value of the shares issued to you under the plan. The portion of
such a distribution that is treated as dividend income will be determined under
the rules described above.
Individuals and certain
other noncorporate entities are generally eligible for a 20% deduction with
respect to certain taxable income from MLPs as well as taxable ordinary
dividends from REITs through 2025. The Fund will not be eligible for the 20%
deduction and will not pass through the 20% deduction to Fund shareholders. As a
result, in comparison, investors investing directly in MLPs or REITs generally
would be eligible for the 20% deduction for such taxable income from these
investments while investors investing in MLPs or REITs held indirectly if any
through the Fund would not be eligible for the 20% deduction for their share of
such taxable income.
53
Redemptions
and Sales of Shares. A
redemption of common shares will be treated as a sale or exchange of such
shares, provided the redemption either: (i) is not essentially equivalent to a
dividend; (ii) is a substantially disproportionate redemption; (iii) is a
complete redemption of a shareholder’s entire interest in the Fund; or (iv) is
in partial liquidation of the Fund. Redemptions that do not qualify for sale or
exchange treatment will be treated as described in “Receipt of Distributions”
above.
Upon a
redemption treated as a sale or exchange under the foregoing rules, or upon a
sale of your shares to a third party, you generally will recognize capital gain
or loss equal to the difference between the cost of your shares and the amount
you receive when you sell them. Any such capital gain or loss will be a
long-term capital gain or loss if you held the shares for more than one year at
the time of disposition. Long-term capital gains of noncorporate shareholders of
the Fund (including individuals) are currently subject to U.S. federal income
taxation at a maximum rate of 15%, or, for certain high income individuals, 20%.
The deductibility of capital losses for both corporate and noncorporate
shareholders of the Fund is subject to limitations under the Code.
A federal excise tax on
stock repurchases is expected to apply to the Fund with respect to share
redemptions occurring on or after January 1, 2023 in accordance with the
provisions of the Inflation Reduction Act of 2022. The excise tax is one-percent
(1%) of the fair market value of Fund share redemptions less the fair market
value of Fund share issuances (in excess of $1 million of fair market value)
annually on a taxable year basis.
Investment
by Tax-Exempt Investors and Regulated Investment Companies. Employee
benefit plans and most other organizations exempt from federal income tax,
including individual retirement accounts and other retirement plans, are subject
to federal income tax on their unrelated business taxable income, or UBTI.
Because the Fund is a corporation for federal income tax purposes, an owner of
the Fund’s shares will not report on its federal income tax return any items of
income, gain, loss and deduction that are allocated to the Fund from the MLPs in
which the Fund invests. Moreover, dividend income from, and gain from the sale
of, corporate stock generally does not constitute UBTI unless the corporate
stock is debt-financed. Therefore, a tax-exempt investor will not have UBTI
attributable to its ownership, sale, or the redemption of the Fund’s shares
unless its ownership is debt-financed. In general, shares are considered to be
debt-financed if the tax-exempt owner of the shares incurred debt to acquire the
shares or otherwise incurred a debt that would not have been incurred if the
shares had not been acquired. Similarly, the income and gain realized from an
investment in the Fund’s shares by an investor that is a regulated investment
company will constitute qualifying income for the regulated investment
company.
Foreign,
State and Local Taxes. It is
possible that the Fund may be liable for foreign, state and local taxes payable
in the country, state or locality in which it is a resident or doing business or
in a country, state or locality in which an MLP in which the Fund invests
conducts or is deemed to conduct business.
Medicare
Tax. An
additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends 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.
Cost
Basis Reporting. 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 their cost basis. Cost
basis will generally be calculated using the Fund’s default method of first-in,
first-out, unless you instruct the Fund to use a different methodology. If you
would like to use the first-in, first-out 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.
Because
your tax situation is unique, you should consult your tax professional about
federal, state and local tax consequences.
Federal
Income Taxation of Holders of the Fund’s Shares—Non-U.S.
Shareholders.
For
purposes of this summary, the term “Non-U.S. Shareholder” means a beneficial
owner of the Fund’s shares that is not a U.S. Shareholder.
Distributions
to Non-U.S. Shareholders that are treated as dividends generally will be subject
to U.S. federal withholding tax at the rate of 30% unless the tax is reduced or
eliminated pursuant to a tax treaty or the distributions are effectively
connected with a U.S. trade or business of the shareholder.
Any capital
gain realized by a Non-U.S. Shareholder upon a sale or redemption of shares of
the Fund will generally not be subject to U.S. federal income or withholding tax
unless (i) the gain is effectively connected with the shareholder’s trade or
business in the U.S., or in the case of a shareholder who is a nonresident alien
individual, the shareholder is present in the U.S. for 183 days or more during
the taxable year and certain other conditions are met or (ii) the Fund is or has
been a U.S. real property holding corporation, as defined below, at any time
within the five-year period preceding the date of disposition of the Fund’s
shares or, if shorter, within the period during which the Non-U.S. Shareholder
has held the common shares. Generally, a corporation is a U.S. real property
holding
54
Taxation
corporation
if the fair market value of its U.S. real property interests, as defined in the
Code and applicable regulations, equals or exceeds 50% of the aggregate fair
market value of its worldwide real property interests and its other assets used
or held for use in a trade or business. The Fund may be, or may prior to a
Non-U.S. Shareholder’s disposition of shares become, a U.S. real property
holding corporation.
Any
Non-U.S. Shareholder who is described in one of the foregoing cases is urged to
consult his, her or its own tax advisor regarding the U.S. federal income tax
consequences of the redemption, sale, exchange or other disposition of shares of
the Fund.
Non-U.S.
shareholders of the Fund may also be subject to U.S. estate tax with respect to
their shares of the Fund.
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.
Each
Non-U.S. Shareholder should consult his, her or its tax adviser regarding the
U.S. and non-U.S. tax consequences of ownership of the Fund’s shares and receipt
of distributions from the Fund.
Backup
Withholding
Federal
regulations generally require the Fund to withhold and remit to the U.S.
Treasury a “backup withholding” tax with respect to dividends and the proceeds
of any redemption paid to you if you fail to furnish the Fund or the Fund’s
paying agent with a properly completed and executed IRS Form W-9, W-8BEN,
W-8BEN-E or other applicable form. Furthermore, the Service may notify the Fund
to institute backup withholding if the Service determines that your TIN is
incorrect or if you have failed to properly report taxable dividends or interest
on a federal tax return. A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax withheld as a
result of backup withholding does not constitute an additional tax imposed on
the record owner of the account and may be claimed as a credit on the record
owner’s federal income tax return. The backup withholding rate is currently
24%.
Energy Infrastructure
Fund
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 a Retirement 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
qualified dividend income and long-term capital gains is either 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 long-term capital gain rate, as long as certain other
requirements are met. For these lower rates to apply, the non-corporate
shareholder must own their 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 activity
or high portfolio turnover rate.
Distributions
in excess of the Fund’s current and accumulated earnings and profits are treated
as a tax-free return of capital, to the extent of your basis in your 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. The
Fund may invest up to 25% of its total assets in MLPs and all or a portion of
the cash distributions received by the Fund from such MLPs may be characterized
as return of capital. Thus, depending on the circumstances, a portion of the
distributions made by the Fund may also be characterized as a return of capital
when paid to shareholders.
55
An
additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from the
Fund and net gains from redemptions or other taxable dispositions of Fund
shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds certain threshold
amounts.
The Fund’s
transactions in derivatives (such as futures contracts and swaps) will be
subject to special tax rules, the effect of which may be to accelerate income to
the Fund, defer losses to the Fund, cause adjustments in the holding periods of
the Fund’s securities and convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount, timing and
character of distributions to you. The Fund’s use of derivatives may result in
the Fund realizing more short-term capital gains and ordinary income subject to
tax at ordinary income tax rates than it would if it did not use
derivatives.
Although
distributions are generally treated as taxable to you in the year they are paid,
distributions declared in October, November or December but paid in January are
taxable as if they were paid in December. A percentage of the Fund’s dividends
paid to corporate shareholders may be eligible for the corporate
dividends-received deduction. This percentage may, however, be reduced as a
result of the Fund’s securities lending activities or by a high portfolio
turnover rate. Character and tax status of all distributions will be available
to shareholders after the close of each calendar year.
Individuals and certain
other noncorporate entities are generally eligible for a 20% deduction with
respect to ordinary dividends received from REITs (“qualified REIT dividends”)
and certain taxable income from MLPs through 2025. Applicable Treasury
regulations permit a regulated investment company to pass through to its
shareholders qualified REIT dividends eligible for the 20% deduction. However,
the regulations do not provide a mechanism for a regulated investment company to
pass through to its shareholders income from MLPs that would be eligible for
such deduction if received directly by the shareholders. As a result, in
comparison, investors investing directly in MLPs would generally be eligible for
the 20% deduction for such taxable income from these investments while investors
investing in MLPs held indirectly if any through the fund would not be eligible
for the 20% deduction for their share of such taxable income.
Each
Fund may be
subject to foreign withholding or other foreign taxes on income or gain from
certain foreign securities. In general, the Fund may deduct these taxes in
computing its taxable income.
If you buy
shares before a distribution, you will be subject to tax on the entire amount of
the taxable distribution you receive. Distributions are taxable to you even if
they are paid from income or gain earned by the Fund before your investment (and
thus were included in the price you paid for your Fund shares).
|
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 will be
long-term or short-term depending on whether your holding period for the shares
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 date of disposition (such as pursuant
to a dividend reinvestment in shares of the Fund). If disallowed, the loss will
be reflected in an adjustment to the basis of the shares acquired.
|
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.
56
Taxation
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
reported
distributions
to non-U.S. investors of long-term capital gains. Non-U.S.
investors
generally are not subject to U.S.
federal income
tax withholding on properly reported distributions of certain qualified interest
income and short-term capital gains.
Although the
Fund generally will report distributions of long-term and short-term capital
gains, the Fund does not anticipate reporting any distributions of
qualified
interest income. Therefore, all 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 taxable 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.
57
Appendix
A
Additional
Information on Portfolio Risks, Securities and
Techniques
|
A. General
Portfolio Risks |
The Funds
will be subject to the risks associated with MLPs and other equity investments,
including common stocks, preferred stocks, interests in REITs, common shares and
preferred shares of energy infrastructure companies, convertible debt
obligations, convertible preferred stocks, equity interests in trusts,
partnerships, joint ventures, limited liability companies and similar
enterprises, PIPEs, other investment companies (including ETFs), warrants, stock
purchase rights and synthetic and derivative instruments (such as swaps and
futures contracts) that have economic characteristics similar to equity
securities.
In general,
the values of equity investments fluctuate in response to the activities of
individual companies and in response to general market and economic conditions.
Accordingly, the values of the equity investments that a Fund holds may decline
over short or extended periods. The stock markets tend to be cyclical, with
periods when stock prices generally rise and periods when prices generally
decline. This volatility means that the value of your investment in 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 performances 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, the 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. 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. A rising
interest rate environment could cause the value of a Fund’s fixed income
securities, if any, to decrease, and fixed income markets to experience
increased volatility in addition to heightened levels of liquidity risk.
Additionally, decreases in the value of fixed income securities could lead to
increased shareholder redemptions, which could impair a Fund’s ability to
achieve its investment objective. The risks associated with increasing rates are
heightened given that interest rates are near historic lows, but may be expected
to increase in the future with unpredictable effects on the markets and the
Fund’s investments.
Non-investment
grade fixed income securities (commonly known as “junk bonds”) are rated below
investment grade (or determined to be of comparable credit quality, if not
rated) 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 the 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 for taxable shareholders. High portfolio turnover may
result in a Fund’s recognition of gains (losses) that will increase (decrease)
the Fund’s tax liability and thereby impact the amount of the Fund’s after-tax
distributions. In addition, high portfolio turnover may increase a Fund’s
current and accumulated earnings and profits, resulting in a greater portion of
the Fund’s distributions being treated as taxable dividends for federal income
tax purposes. 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.
A Fund 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 a Fund, 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
58
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 the Fund remains an appropriate
investment in light of your then current financial position and
needs.
|
B. Other
Portfolio Risks |
Risks
of Private Investments in Public Equities. A Fund may
make private investments in public equities (“PIPE”). PIPE transactions
typically involve the purchase of securities directly from a publicly traded
company or its affiliates in a private placement transaction, typically at a
discount to the market price of the company’s common stock. In a PIPE
transaction, a Fund may bear the price risk from the time of pricing until the
time of closing. Equity issued in this manner is often subject to transfer
restrictions and is therefore relatively less liquid than equity issued through
a registered public offering. For example, a Fund may be subject to lock-up
agreements that prohibit transfers for a fixed period of time. In addition,
because the sale of the securities in a PIPE transaction is not registered under
the Securities Act, the securities are “restricted” and cannot be immediately
resold into the public markets. A Fund may enter into a registration rights
agreement with the issuer pursuant to which the issuer commits to file a resale
registration statement allowing the Fund to publicly resell its securities.
However, the ability of a Fund to freely transfer the shares is conditioned
upon, among other things, the SEC’s preparedness to declare the resale
registration statement effective and the issuer’s right to suspend the Fund’s
use of the resale registration statement if the issuer is pursuing a transaction
or some other material non-public event is occurring. Accordingly, PIPE
securities may be subject to risks associated with illiquid
investments.
Risks
of Pre-IPO Investments. Privately
held companies typically have limited operating histories, narrower, less
established product lines and smaller market shares than larger businesses,
which tend to render them more vulnerable to competitors’ actions, market
conditions and consumer sentiment in respect of their products or services, as
well as general economic downturns. Such companies may experience operating
losses, which may be substantial, and there can be no assurance when or if such
companies will operate at a profit. At the time of a Fund’s investment, there is
generally little publicly available information about these companies since they
are primarily privately owned and the Fund may only have access to the company’s
actual financial results as of and for the most recent quarter end or, in
certain cases, the quarter end preceding the most recent quarter end. There can
be no assurance that the information that a Fund does obtain with respect to any
investment is reliable. Privately held companies may have limited financial
resources and may be unable to meet their obligations under their existing
credit facilities (to the extent that such facilities exist), which may lead to
equity financings, possibly at discounted valuations, in which a Fund could be
substantially diluted if the Fund does not or cannot participate, bankruptcy or
liquidation and the corresponding reduction in value or loss of the Fund’s
investment. Privately held companies are more likely to depend on the management
talents and efforts of a small group of persons; therefore, the death,
disability, resignation or termination of one or more of these persons could
have a material adverse impact on the company and, in turn, on a Fund. Continued
global economic uncertainty could also result in investors becoming more
risk-averse, which in turn could reduce the amount of growth capital available
to the companies from both existing and new investors, could adversely affect
their operating performance, and could delay liquidity paths (for example, an
IPO or strategic sale/merger) for the companies. It may be difficult for a Fund
to sell these investments, subjecting the Fund to liquidity risk. Shares of
privately held companies are relatively less liquid (and may be illiquid) and
difficult to value, and the inability of these portfolio companies to complete
an IPO within the targeted time frame will extend the holding period of a Fund’s
investments and may adversely affect the value of these investments.
Risks
of Investing in Mid-Capitalization and Small-Capitalization
Companies. A 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.
59
Risks
of Investing in Master Limited Partnerships.
Investments in securities of an MLP involve risks that differ from investments
in common stock, including risks related to limited control and limited rights
to vote on matters affecting the MLP, risks related to potential conflicts of
interest between the MLP and the MLP’s general partner, cash flow risks,
dilution risks and risks related to the general partner’s right to require
unit-holders to sell their common units at an undesirable time or price,
resulting from regulatory changes or other reasons. Many of a Fund’s investments
in MLPs will be subject to legal and other restrictions on resale or will
otherwise be less liquid than publicly traded securities. Certain MLP securities
may trade in lower volumes due to their smaller capitalizations. Accordingly,
those MLPs may be subject to more abrupt or erratic price movements and may lack
sufficient market liquidity to enable a Fund to effect sales at an advantageous
time or without a substantial drop in price. Investment in those MLPs may
restrict a Fund’s ability to take advantage of other investment opportunities.
If a Fund is one of the largest investors in certain MLPs, it may be more
difficult for the Fund to buy and sell significant amounts of such investments
without an unfavorable impact on prevailing market prices. Larger purchases or
sales of MLP investments by a Fund in a short period of time may cause abnormal
movements in the market price of these investments. As a result, these
investments may be difficult to dispose of at a fair price at the times when a
Fund believes it is desirable to do so. MLPs are generally considered
interest-rate sensitive investments. During periods of interest rate volatility,
these investments may not provide attractive returns. Depending on the state of
interest rates in general, the use of MLPs could enhance or harm the overall
performance of a Fund.
A Fund’s
ability to meet its investment objective will depend in part, sometimes largely,
on the amount of the distributions it receives from the MLPs (in relation to the
taxable income, gains, losses, and deductions allocated to it). The amount and
tax characterization of cash available for distribution by an MLP depends upon
the amount of cash generated by such entity’s operations. Cash available for
distribution by MLPs will vary widely from quarter to quarter and is affected by
various factors affecting the entity’s operations. In addition to the risks
described herein, operating costs, capital expenditures, acquisition costs,
construction costs, exploration costs and borrowing costs may reduce the amount
of cash that an MLP has available for distribution in a given period. MLPs have
the ability to modify their distribution policies from time to time without
input from or approval of a Fund.
Conflicts
of interest may arise from incentive distribution payments paid to the general
partner, or referral of business opportunities by the general partner or one of
its affiliates to an entity other than the MLP. Holders of general partner or
managing member interests typically receive incentive distribution rights, which
provide them with an increasing share of the entity’s aggregate cash
distributions upon the payment of per common unit distributions that exceed
specified threshold levels above the minimum quarterly distribution (“MQD”). Due
to the incentive distribution rights, general partners of MLPs have higher
distribution growth prospects than their underlying MLPs, but quarterly
incentive distribution payments would also decline at a greater rate than the
decline rate in quarterly distributions to common and subordinated unit holders
in the event of a reduction in the MLP’s quarterly distribution. The ability of
the limited partners or members to remove the general partner or managing member
without cause is typically very limited. In addition, some MLPs permit the
holder of incentive distribution rights to reset, under specified circumstances,
the incentive distribution levels and receive compensation in exchange for the
distribution rights given up in the reset.
MLPs are
subject to various risks related to the underlying operating companies they
control, including dependence upon specialized management skills and the risk
that those operating companies may lack or have limited operating histories. The
success of a Fund’s investments in an MLP will vary depending on the underlying
industry represented by the MLP’s portfolio. Certain MLPs in which a Fund may
invest depend upon their parent or sponsor entities for the majority of their
revenues. If the parent or sponsor entities fail to make payments or satisfy
their obligations to an MLP, the revenues and cash flows of that MLP and ability
of that MLP to make distributions to unit holders such as a Fund would be
adversely affected.
Certain
MLPs in which a Fund may invest depend upon a limited number of customers for
substantially all of their revenue. Similarly, certain MLPs in which a Fund may
invest depend upon a limited number of suppliers of goods or services to
continue their operations. The loss of those customers or suppliers could have a
material adverse effect on an MLP’s results of operations and cash flow, and on
its ability to make distributions to unit holders such as a Fund.
The Funds
are not responsible for operating MLPs and similar entities and cannot control
or monitor their compliance with applicable tax, securities and other laws and
regulations necessary for the profitability of such investments. Furthermore,
the structures and terms of the MLPs and other entities described in the
Prospectus may not be indicative of the structure and terms of every entity in
which a Fund invests. Although the MLP sector has grown significantly in recent
years, such market trends may not continue due to economic conditions, which are
not predictable, or other factors.
Market
prices generally will be unavailable for some of the Funds’ investments,
including MLP subordinated units, direct ownership of general partner or
managing member interests and restricted or unregistered securities of certain
MLPs and private companies. The value of such securities will be determined by
fair valuations determined by the Board of Trustees or its designee in
accordance with procedures governing the valuation of portfolio securities
adopted by the Board of Trustees. Proper valuation of such securities may
require more reliance on the judgment of GSAM than for valuation of securities
for which an active trading market exists.
60
Appendix
A
Tax
Risks. Tax risks
associated with investments in the Funds include but are not limited to the
following:
◼
MLP Tax
Risk. Much of
the benefit that a Fund may derive from its investment in equity securities of
MLPs is a result of MLPs generally being treated as partnerships for U.S.
federal income tax purposes. Partnerships do not pay U.S. federal income tax at
the partnership level. Rather, each partner is allocated a share of the
partnership’s income, gains, losses, deductions and expenses. A change in
current tax law, or a change in the underlying business mix of a given MLP,
could result in an MLP being treated as a corporation for U.S. federal income
tax purposes, which would result in the MLP being required to pay U.S. federal
income tax (as well as state and local income taxes) on its taxable income. The
classification of an MLP as a corporation for U.S. federal income tax purposes
would have the effect of reducing the amount of cash available for distribution
by the MLP. If any MLP in which the Fund invests were treated as a corporation
for U.S. federal income tax purposes, it could result in a reduction of the
value of the Fund’s investment in the MLP and lower income to the
Fund.
◼
Distributions from an MLP
in excess of the Fund’s basis in the MLP will generally be treated as capital
gain. However, a portion of the gain may instead be treated as ordinary income
to the extent attributable to certain assets held by the MLP the sale of which
would produce ordinary income. To the extent a distribution received by the Fund
from an MLP is treated as a return of capital, the Fund’s adjusted tax basis in
the interests of the MLP may be reduced, which will result in an increase in an
amount of income or gain (or decrease in the amount of loss) that will be
recognized by the Fund for tax purposes upon the sale of any such interests or
upon subsequent distributions in respect of such interests. Furthermore, any
return of capital distribution received from the MLP may require the Fund to
restate the character of its distributions and amend any shareholder tax
reporting previously issued.
Additional
tax risks associated with investments in the MLP Energy Infrastructure Fund
include but are not limited to the following:
To the
extent that the Fund invests in the equity securities of an MLP classified as a
partnership, the Fund will be required to include in its taxable income the
Fund’s allocable share of the income, gains, losses and deductions recognized by
each such MLP and take into account its allocable share of the MLP’s tax
credits, regardless of whether the MLP distributes cash to the Fund. Based upon
a review of the historic results of the type of MLPs in which the Fund intends
to invest, the Fund expects that the cash distributions it will receive with
respect its investments in equity securities of MLPs will exceed the taxable
income allocated to the Fund from such MLPs. No assurance, however, can be given
in this regard. If this expectation is not realized, the Fund will have a larger
corporate income tax expense than expected, which will result in less cash
available to distribute to shareholders.
The portion
of an MLP’s distributions to the Fund which are not derived from the MLP’s
taxable income (return of capital distributions) generally will not be taxable
to the Fund unless the amount distributed exceeds the Fund’s basis in its
interest in the MLP. Distributions received by the Fund from an MLP will reduce
the Fund’s adjusted basis in its interest in the MLP, but not below zero. A
reduced basis generally will result in an increase in the amount of gain (or
decrease in the amount of loss) that will be recognized by the Fund for tax
purposes on the sale of its interest in the MLP. Distributions from an MLP to
the Fund in excess of the Fund’s basis in the MLP generally will be taxable to
the Fund as capital gain. The Fund will not benefit from current favorable
federal income tax rates on long-term capital gains because it will be taxed as
a corporation for federal income tax purposes. Furthermore, any return of
capital distribution received from the MLP may require the Fund to restate the
character of its distributions and amend any shareholder tax reporting
previously issued.
Historically,
energy and certain other MLPs have been able to offset a significant portion of
their taxable income with tax deductions. The Fund will incur a current income
tax liability on the portion of its share of the income and gain from each MLP
investment that is not offset by its share of the MLP’s tax deductions, by its
share of the MLPs’ tax credits or by the Fund’s net operating losses or net
operating loss carryforwards, if any. The percentage of an MLP’s income that is
offset by the MLP’s tax deductions will fluctuate over time. For example, new
acquisitions of depreciable property by MLPs tend to generate accelerated
depreciation and other tax deductions, and therefore a decline in acquisition
activity by such MLPs owned by the Fund could increase the Fund’s current tax
liability. If the percentage of the income allocated to the Fund that is offset
by tax deductions declines, or the Fund’s portfolio turnover increases, the Fund
could incur increased tax liabilities and the portion of the distributions paid
by the Fund that is treated as tax-deferred return of capital would be reduced
and the portion treated as taxable dividend income would be increased. This
generally would result in lower after-tax distributions to shareholders. If the
amount of a Fund distribution to U.S. shareholders exceeds the Fund’s current
and accumulated earnings and profits, such excess will be treated first as a
tax-free return of capital to the extent of, and in reduction of, U.S.
shareholders’ tax basis in the shares, and thereafter as capital gain. Any such
capital gain will be long-term capital gain if such U.S. shareholder has held
the applicable shares for more than one year. The portion of the distribution
received by the U.S. shareholder from the Fund that constitutes a return of
capital will decrease the U.S. shareholder’s tax basis in his or her Fund shares
(but not below zero), which will result in an increase in the amount of gain (or
decrease in the amount of loss) that will be recognized by the U.S. shareholder
for tax purposes on the later sale of such Fund shares.
61
Depreciation
or other cost recovery deductions passed through to the Fund from investments in
MLPs in a given year generally will reduce the Fund’s taxable income (and
earnings and profits), but those deductions may be recaptured in the Fund’s
taxable income (and earnings and profits) in subsequent years when the MLPs
dispose of their assets or when the Fund disposes of its interests in the MLPs.
When deductions are recaptured, distributions to the Fund’s shareholders may be
taxable, even though the shareholders at the time of the distribution might not
have held shares in the Fund at the time the deductions were taken by the Fund,
and even though the Fund’s shareholders at the time of the distribution will not
have corresponding economic gain on their shares at the time of the
distribution.
The portion
of the distributions received by the Fund each year that is considered a return
of capital from the MLPs will not be known until the Fund receives a schedule
K-1 for that year with respect to each of its MLP investments. The Fund’s tax
liability will not be known until the Fund completes its annual tax return. The
Fund’s tax estimates could vary substantially from the actual liability and
therefore the determination of the Fund’s actual tax liability may have a
material impact on the Fund’s NAV. The payment of corporate income taxes imposed
on the Fund will decrease cash available for distribution to
shareholders.
◼
Investment
in MLP C Corporations. As
discussed above, the MLP Energy Infrastructure Fund may invest in MLPs taxed as
C corporations. Such MLPs are obligated to pay federal income tax on their
taxable income at the corporate tax rate and the amount of cash available for
distribution by such MLPs would generally be reduced by any such tax.
Additionally, distributions received by the Fund would be taxed under federal
income tax laws applicable to corporate dividends (as dividend income,
potentially subject to the corporate dividends received deduction, return of
capital, or capital gain). Thus, investment in MLPs taxed as C corporations
could result in a reduction of the value of your investment in the Fund and
lower income, as compared to investments in MLPs that are classified as
partnerships for tax purposes.
◼
Fund
Structure Risk. Unlike
traditional mutual funds that are structured as regulated investment companies
for U.S. federal income tax purposes, the Fund will be taxable as a regular
corporation, or “C” corporation, for U.S. federal income tax purposes. This
means the Fund generally will be subject to U.S. federal income tax on its
taxable income at the rates applicable to corporations (at a rate of 21%), and
will also be subject to state and local income taxes.
While not
required to do so, the Fund currently anticipates making distributions to its
shareholders each fiscal quarter (February, May, August, November) at a rate
that is approximately equal to the distribution rate the Fund receives from the
MLPs and other securities in which it invests, including income, if any.
Consequently, the Fund may maintain cash reserves, borrow or may be required to
sell certain investments at times when it would not otherwise be desirable to do
so in order to pay the expenses of the Fund. Such sales could result in the
Fund’s recognition of taxable income and gains, could result in the imposition
of U.S. federal, state and local corporate income taxes on the Fund, and may
increase the Fund’s current and accumulated earnings and profits, which would
result in a greater portion of distributions to Fund shareholders being treated
as dividends. This practice also could require the Fund to sell an investment at
a price lower than the price at which it is valued, or lower than the price the
Fund could have obtained if it were able to sell the investment at a more
advantageous time.
Unlike the
MLP investments in which it invests, the Fund is not a pass-through vehicle.
Consequently, the tax characterization of the distributions paid by the Fund, as
dividend income or return of capital, may differ greatly from those of the
underlying MLPs.
Changes in
tax laws or regulations, or future interpretations of such laws or regulations,
could adversely affect the Fund or the MLPs in which the Fund invests.
Legislation could also negatively impact the amount and tax characterization of
dividends received by the Fund’s shareholders. Congress could significantly
change the tax regime in the United States and impose a flat tax on gross income
or take other actions which would eliminate the tax benefits of depreciation,
depletion and amortization deductions realized by MLPs. Alternatively, Congress
could impose a tax on pass-through entities such as MLPs or eliminate the use of
pass-through taxation entirely. The tax benefits of depreciation, depletion and
amortization deductions realized by MLPs effectively defer the income of the
MLPs and, in turn, the taxable income of the Fund. Without these benefits the
Fund would be subject to current U.S. federal, state and local corporate income
taxes on a greater proportion of its allocable share of the income and gains of
MLPs in which it invests, and the Fund’s ability to pay distributions treated as
return-of-capital distributions or as capital gains would be reduced. Imposing a
tax on pass-through entities and/or eliminating the use of pass-through taxation
entirely could result in three levels of tax—at the MLP level, the Fund level
and the shareholder level.
◼
Tax
Estimation/NAV Risk. Because
the Fund is treated as a regular corporation, or a “C” corporation, for U.S.
federal income tax purposes, the Fund will incur tax expenses. In calculating
the Fund’s daily NAV, the Fund will account for its current taxes and deferred
tax liability and/or asset balances.
The Fund
may accrue a deferred income tax liability balance at the rates applicable to
corporations, plus an estimated state and local income tax rate, for its future
tax liability associated with the capital appreciation of its investments and
the distributions received by the Fund on equity securities of MLPs considered
to be return of capital and for any net operating gains. Any deferred tax
liability balance will reduce the Fund’s NAV. Upon the Fund’s sale of its
interest in an MLP, the Fund may be liable for previously deferred taxes. The
Fund may also accrue a deferred tax asset balance, which reflects an estimate of
the Fund’s future tax benefit associated with net operating losses and
unrealized losses. Any deferred tax asset balance will increase the Fund’s NAV.
To
62
Appendix
A
the extent
the Fund has a deferred tax asset balance, the Fund will assess whether a
valuation allowance, which would offset the value of some or all of the Fund’s
deferred tax asset balance, is required, considering all positive and negative
evidence related to the realization of the Fund’s deferred tax asset. To the
extent a valuation allowance differs from the estimates of the Fund used in
calculating the Fund’s daily NAV, the application of such valuation allowance
could have a material impact on the Fund’s NAV.
An estimate
of current taxes and deferred tax liability and/or asset balances is dependent
upon the Fund’s net investment income and unrealized gains on investments and
such expenses may vary greatly from year to year depending on the nature of the
Fund’s investments, the performance of those investments and general market
conditions. Therefore, any estimate of current taxes and deferred income tax
liability and/or asset balances cannot be reliably predicted from year to
year.
The Fund’s
deferred tax liability and/or asset balances are estimated using estimates of
effective tax rates expected to apply to taxable income in the years such
balances are realized. The Fund will rely to some extent on information provided
by MLPs regarding the tax characterization of the distributions made by such
MLPs, which may not be provided to the Fund on a timely basis, to estimate the
Fund’s current taxes and deferred tax liability and/or asset balances for
purposes of financial statement reporting and determining its NAV. The Fund’s
estimates regarding its current taxes and deferred tax liability and/or asset
balances are made in good faith; however, the daily estimate of the Fund’s
current taxes and deferred tax liability and/or asset balances used to calculate
the Fund’s NAV could vary significantly from the Fund’s actual tax liability or
benefit, and, as a result, the determination of the Fund’s actual tax liability
or benefit may have a material impact on the Fund’s NAV. From time to time, the
Fund may modify its estimates or assumptions regarding its current taxes and
deferred tax liability and/or asset balances as new information becomes
available. Modifications of the Fund’s estimates or assumptions regarding its
current taxes and deferred tax liability and/or asset balances and any
applicable valuation allowance, changes in generally accepted accounting
principles (“GAAP”) or related guidance or interpretations thereof, limitations
imposed on net operating losses (if any) and changes in applicable tax law could
result in increases or decreases in the Fund’s NAV, which could be material.
Unexpected significant decreases in cash distributions from the Fund’s MLP
investments or significant declines in the fair value of its investments may
change the Fund’s assessment regarding the recoverability of its deferred tax
assets and may result in a valuation allowance. If a valuation allowance is
required to reduce any deferred tax asset in the future, it could have a
material impact on the Fund’s NAV and results of operations with respect to the
Fund’s shareholders in the period it is recorded, even though the shareholders
at such time might not have held shares in the Fund at the time the deferred tax
asset had been established.
Risks
of Investing in the Energy Sector. Many MLPs
in which a Fund may invest operate oil, gas or petroleum facilities, or other
facilities within the energy sector. As a result, the Funds will be concentrated
in the energy sector, and will therefore be susceptible to adverse economic,
business, social, political, environmental or regulatory occurrences affecting
that sector. A downturn in the energy sector could have a larger impact on a
Fund than on funds that are broadly diversified across many sectors and
industries. At times, the performance of securities of companies in the energy
sector may lag behind the performance of other sectors or industries or the
broader market as a whole. MLPs and other companies operating in the energy
sector are subject to specific risks, including, but not limited to, the
following:
◼
Commodity
Pricing Risk. MLPs and
other companies operating in the energy sector may be affected by fluctuations
in the prices of energy commodities, including, for example, natural gas,
natural gas liquids, crude oil and coal in the short-term and long-term.
Fluctuations in energy commodity prices would directly impact companies that own
such energy commodities and could indirectly impact companies that engage in
transportation, storage, processing, distribution or marketing of such energy
commodities. Fluctuations in energy commodity prices can result from changes in
general economic conditions or political circumstances (especially of key energy
producing and consuming countries); market conditions; weather patterns;
domestic production levels; volume of imports; energy conservation; domestic and
foreign governmental regulation; international politics; policies of the
Organization of Petroleum Exporting Countries (“OPEC”); taxation; tariffs; and
the availability and costs of local, intrastate and interstate transportation
methods. The energy sector as a whole may also be impacted by the perception
that the performance of energy sector companies is directly linked to commodity
prices. High commodity prices may drive further energy conservation efforts, and
a slowing economy may adversely impact energy consumption, which may adversely
affect the performance of MLPs and other companies operating in the energy
sector.
◼
Supply
and Demand Risk. MLPs and
other companies operating in the energy sector may be impacted by the levels of
supply and demand for energy commodities. The volume of production of energy
commodities and the volume of energy commodities available for transportation,
storage, processing or distribution could be affected by a variety of factors,
including: depletion of resources; depressed commodity prices; catastrophic
events; labor relations; increased environmental or other governmental
regulation; equipment malfunctions and maintenance difficulties; import volumes;
international politics, policies of OPEC; and increased competition from
alternative energy sources. Alternatively, a decline in demand for energy
commodities could result from factors such as: adverse economic conditions
(especially in key energy-consuming countries); increased taxation; increased
environmental or other governmental regulation; increased fuel economy;
increased energy conservation or use of alternative energy sources; legislation
intended to promote the use of alternative energy sources; or increased
commodity prices.
63
◼
Depletion
Risk. Energy
reserves naturally deplete as they are consumed over time. MLPs and other
companies operating in the energy sector rely on the expansion of reserves
through exploration of new sources of supply or the development of existing
sources in order to grow or maintain their revenues. The financial performance
of MLPs and other companies operating in the energy sector may be adversely
affected if they, or the companies to whom they provide services, are unable to
cost-effectively acquire additional energy deposits sufficient to replace the
natural decline of existing reserves. If an energy company is not able to raise
capital on favorable terms, it may not be able to add to or maintain its
reserves.
◼
Environmental
and Regulatory Risk. The energy
sector is highly regulated. MLPs and other companies operating in the energy
sector are subject to significant regulation of nearly every aspect of their
operations by federal, state and local governmental agencies. Such regulation
can change over time in both scope and intensity. For example, a particular
by-product may be declared hazardous by a regulatory agency and unexpectedly
increase production costs. Various governmental authorities have the power to
enforce compliance with these regulations and the permits issued under them, and
violators are subject to administrative, civil and criminal penalties, including
civil fines, injunctions or both.
There is an
inherent risk that MLPs and other companies operating in the energy sector may
incur environmental costs and liabilities due to the nature of their businesses
and the substances they handle. For example, an accidental release from wells or
energy assets could subject an MLP to substantial liabilities for environmental
cleanup and restoration costs, claims made by neighboring landowners and other
third parties for personal injury and property damage, and fines or penalties
for related violations of environmental laws or regulations.
Specifically,
the operations of wells, gathering systems, pipelines, refineries and other
facilities are subject to stringent and complex federal, state and local
environmental laws and regulations. These include, for example: the Federal
Clean Air Act and comparable state laws and regulations that impose obligations
related to air emissions; the Federal Clean Water Act and comparable state laws
and regulations that impose obligations related to discharges of pollutants into
regulated bodies of water; the Federal Resource Conservation and Recovery Act
and comparable state laws and regulations that impose requirements for the
handling and disposal of waste from facilities; and the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980, also known as
“Superfund,” and comparable state laws and regulations that regulate the cleanup
of hazardous substances that may have been released at properties currently or
previously owned or operated by MLPs or at locations to which they have sent
waste for disposal.
Pipeline
MLPs and other pipeline companies are subject to regulation by the Federal
Energy Regulatory Commission (“FERC”) with respect to tariff rates these
companies may charge for interstate pipeline transportation services. An adverse
determination by FERC with respect to the tariff rates of a pipeline MLP could
have a material adverse effect on the business, financial condition, results of
operations, cash flows and prospects of that pipeline MLP and its ability to
make cash distributions to its equity owners. Moreover, the possibility exists
that stricter laws, regulations or enforcement policies could be enacted in the
future that would significantly increase compliance costs and remediation costs,
thus adversely affecting the financial performance of MLPs. MLPs may not be able
to recover remediation costs from insurance.
Hydraulic
fracturing, or “fracking,” is a relatively new technique for releasing and
extracting natural gas trapped in underground shale formations. The fracking
sector is facing allegations from environmentalists and some landowners that the
technique may cause serious difficulties, which has led to uncertainty about the
nature, extent, and cost of the environmental regulation to which it may
ultimately be subject.
Voluntary
initiatives and mandatory controls have been adopted or are being discussed both
in the United States and worldwide to reduce emissions of “greenhouse gases”
such as carbon dioxide, a by-product of burning fossil fuels, and methane, the
major constituent of natural gas, which many scientists and policymakers believe
contribute to global climate change. These measures and future measures could
result in increased costs to certain MLPs and other companies in which the Fund
may invest to operate and maintain facilities and administer and manage a
greenhouse gas emissions program and may reduce demand for fuels that generate
green house gases and that are managed or produced by MLPs in which the Fund may
invest.
◼
Weather
Risk. Weather
plays a role in the seasonality of some MLPs’ cash flows. MLPs and other
companies in the propane sector, for example, rely on the winter season to
generate almost all of their earnings. In an unusually warm winter season,
propane MLPs experience decreased demand for their product. Although most MLPs
can reasonably predict seasonal weather demand based on normal weather patterns,
extreme weather conditions, such as hurricanes, can adversely affect performance
and cash flows of the MLPs.
◼
Catastrophic
Event Risk. MLPs and
other companies operating in the energy sector are subject to many dangers
inherent in the production, exploration, management, transportation, processing
and distribution of natural gas, natural gas liquids, crude oil, refined
petroleum and petroleum products and other hydrocarbons. These dangers include
leaks, fires, explosions, damage to facilities and equipment resulting from
natural disasters, inadvertent damage to facilities and equipment and terrorist
acts. Since the September 11 terrorist attacks, the U.S. government has issued
warnings that energy assets, specifically U.S. pipeline infrastructure, may be
targeted in future terrorist attacks. These dangers give rise to risks of
substantial losses as a result of loss or destruction of
64
Appendix
A
commodity
reserves; damage to or destruction of property, facilities and equipment;
pollution and environmental damage; and personal injury or loss of life. Any
occurrence of such catastrophic events could bring about a limitation,
suspension or discontinuation of the operations of MLPs and other companies
operating in the energy sector. MLPs and other companies operating in the energy
sector may not be fully insured against all risks inherent in their business
operations and therefore accidents and catastrophic events could adversely
affect such companies’ financial conditions and ability to pay distributions to
shareholders.
◼
Acquisition
Risk. MLPs owned
by a Fund may depend on their ability to make acquisitions that increase
adjusted operating surplus per unit in order to increase distributions to unit
holders. The ability of such MLPs to make future acquisitions is dependent on
their ability to identify suitable targets, negotiate favorable purchase
contracts, obtain acceptable financing and outbid competing potential acquirers.
To the extent that MLPs are unable to make future acquisitions, or such future
acquisitions fail to increase the adjusted operating surplus per unit, their
growth and ability to make distributions will be limited. There are risks
inherent in any acquisition, including: erroneous assumptions regarding
revenues, acquisition expenses, operating expenses, cost savings and synergies;
assumption of unknown liabilities; indemnification; customer losses; key
employee defections; distraction from other business operations; and
unanticipated difficulties in operating or integrating new product areas and
geographic regions.
Furthermore,
even if an MLP does consummate an acquisition that it believes will be
accretive, the acquisition may instead result in a decrease in free cash
flow.
◼
Interest
Rate Risk. Rising
interest rates could increase the costs of capital thereby increasing operating
costs and reducing the ability of MLPs and other companies operating in the
energy sector to carry out acquisitions or expansions in a cost-effective
manner. As a result, rising interest rates could negatively affect the financial
performance of MLPs and other companies operating in the energy sector. Rising
interest rates may also impact the price of the securities of MLPs and other
companies operating in the energy sector as the yields on alternative
investments increase.
Industry
Specific Risks. MLPs and
other companies operating in the energy sector are also subject to risks that
are specific to the industry in which they operate.
◼
Pipeline. Pipeline
companies are subject to many risks, including varying demand for crude oil,
natural gas, natural gas liquids or refined products in the markets served by
the pipeline; changes in the availability of products for gathering,
transportation, processing or sale due to natural declines in reserves and
production in the supply areas serviced by the companies’ facilities; sharp
decreases in crude oil or natural gas prices that cause producers to curtail
production or reduce capital spending for exploration activities; and
environmental regulation. Specifically, demand for gasoline, which accounts for
a substantial portion of refined product transportation, depends on price,
prevailing economic conditions in the markets served, and demographic and
seasonal factors.
◼
Gathering
and processing. Gathering
and processing companies are subject to natural declines in the production of
oil and natural gas fields, which utilize their gathering and processing
facilities as a way to market their production, prolonged declines in the price
of natural gas or crude oil, which curtails drilling activity and therefore
production, and declines in the prices of natural gas liquids and refined
petroleum products, which cause lower processing margins. In addition, some
gathering and processing contracts subject the gathering or processing company
to direct commodities price risk.
◼
Midstream. Midstream
MLPs and other companies that provide crude oil, refined product and natural gas
services are subject to supply and demand fluctuations in the markets they serve
which may be impacted by a wide range of factors including fluctuating commodity
prices, weather, increased conservation or use of alternative fuel sources,
increased governmental or environmental regulation, depletion, rising interest
rates, declines in domestic or foreign production, accidents or catastrophic
events, and economic conditions, among others.
◼
Exploration
and production.
Exploration, development and production companies are particularly vulnerable to
declines in the demand for and prices of crude oil and natural gas. Reductions
in prices for crude oil and natural gas can cause a given reservoir to become
uneconomic for continued production earlier than it would if prices were higher,
resulting in the plugging and abandonment of, and cessation of production from,
that reservoir. In addition, lower commodity prices not only reduce revenues but
also can result in substantial downward adjustments in reserve estimates. The
accuracy of any reserve estimate is a function of the quality of available data,
the accuracy of assumptions regarding future commodity prices and future
exploration and development costs and engineering and geological interpretations
and judgments. Different reserve engineers may make different estimates of
reserve quantities and related revenue based on the same data. Actual oil and
gas prices, development expenditures and operating expenses will vary from those
assumed in reserve estimates, and these variances may be significant. Any
significant variance from the assumptions used could result in the actual
quantity of reserves and future net cash flow being materially different from
those estimated in reserve reports. In addition, results of drilling, testing
and production and changes in prices after the date of reserve estimates may
result in downward revisions to such estimates. Substantial downward adjustments
in reserve estimates could have a material adverse effect on a given exploration
and production company’s financial position and results of operations. In
addition, due to natural declines in reserves and production, exploration and
production companies must economically find or acquire and develop additional
reserves in order to maintain and grow their revenues and
distributions.
65
◼
Oil. In
addition to the risks applicable to pipeline companies described above,
gathering and processing companies and exploration and production companies,
(companies involved in the transportation, gathering, processing, exploration,
development or production of crude oil or refined petroleum products) may be
adversely affected by increased regulations, increased operating costs and
reductions in the supply of and/or demand for crude oil and refined petroleum
products. Increased regulation may result in a decline in production and/or
increased cost associated with offshore oil exploration in the United States and
around the world, which may adversely affect certain MLPs and the oil industry
in general.
◼
Propane. Propane
companies are subject to earnings variability based upon weather patterns in the
locations where they operate and increases in the wholesale price of propane
which reduce profit margins. In addition, propane companies are facing increased
competition due to the growing availability of natural gas, fuel oil and
alternative energy sources for residential heating.
◼
Coal. Coal
companies are subject to declines in the demand for and prices of coal. Demand
variability can be based on weather conditions, the strength of the domestic
economy, the level of coal stockpiles in their customer base, and the prices of
competing sources of fuel for electric generation. They are also subject to
supply variability based on geological conditions that reduce the productivity
of mining operations, the availability of regulatory permits for mining
activities and the availability of coal that meets the standards of the Clean
Air Act of 1990, as amended.
◼
Power
Infrastructure. Power
infrastructure companies are subject to many risks, including earnings
variability based upon weather patterns in the locations where the company
operates, the change in the demand for electricity, the cost to produce power,
and the regulatory environment. Further, share prices are partly based on the
interest rate environment, the sustainability and potential growth of the
dividend, and the outcome of various rate cases undertaken by the company or a
regulatory body.
◼
Marine
Transportation. Marine
transportation (or “tanker”) companies are exposed to the highly cyclical nature
of the tanker industry and may be subject to volatile changes in charter rates
and vessel values, which may adversely affect the earnings of tanker companies.
Fluctuations in charter rates and vessel values result from changes in the
supply and demand for tanker capacity and changes in the supply and demand for
oil and oil products. Changes in demand for transportation of oil over longer
distances and the supply of tankers to carry that oil may materially affect the
revenues, profitability and cash flows of tanker companies. The successful
operation of vessels in the charter market depends upon, among other things,
obtaining profitable spot charters and minimizing time spent waiting for
charters and traveling unladen to pick up cargo. The value of tanker vessels may
fluctuate and could adversely affect the value of tanker company securities in
the Fund’s portfolio. Declining tanker values could affect the ability of tanker
companies to raise cash by limiting their ability to refinance their vessels,
thereby adversely impacting tanker company liquidity. Tanker company vessels are
at risk of damage or loss because of events such as mechanical failure,
collision, human error, war, terrorism, piracy, cargo loss and bad weather. In
addition, changing economic, regulatory and political conditions in some
countries, including political and military conflicts, have from time to time
resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor
strikes, boycotts and government requisitioning of vessels. These sorts of
events could interfere with shipping lanes and result in market disruptions and
a significant loss of tanker company earnings.
◼
Greenfield
Projects. A Fund may
invest in energy-related projects known as greenfield projects. Greenfield
projects are generally built by private joint ventures formed by energy
companies and are susceptible to specific risks. For example, changing project
requirements, elevated costs for labor and materials, and unexpected
construction hurdles may increase construction costs. It is also possible that
greenfield projects may not materialize due to, among other factors, the absence
of a natural energy source and the failure of having technology necessary to
generate the energy. A Fund’s investments in greenfield projects may be
structured as pay-in-kind securities with minimal or no cash interest or
dividends until the construction is completed, at which time interest payments
or dividends would be paid in cash.
Risks
of Foreign Investments. A Fund may
make foreign investments. Foreign investments involve special risks that are not
typically associated with U.S. dollar denominated or quoted securities of U.S.
issuers. Foreign investments may be affected by changes in currency rates,
changes in foreign or U.S. laws or restrictions applicable to such investments
and changes in exchange control regulations (e.g., currency blockage). A decline
in the exchange rate of the currency (i.e., weakening of the currency against
the U.S. dollar) in which a portfolio security is quoted or denominated relative
to the U.S. dollar would reduce the value of the portfolio security. In
addition, if the currency in which a Fund receives dividends, interest or other
payments declines in value against the U.S. dollar before such income is
distributed as dividends to shareholders or converted to U.S. dollars, the Fund
may have to sell portfolio securities to obtain sufficient cash to pay such
dividends.
Certain
foreign markets may rely heavily on particular industries or foreign capital and
are more vulnerable to diplomatic developments, the imposition of economic
sanctions against a particular country or countries, organizations, entities
and/or individuals, changes in international trading patterns, trade barriers,
and other protectionist or retaliatory measures. International trade barriers or
economic sanctions against foreign countries, organizations, entities and/or
individuals may adversely affect a Fund’s foreign holdings or
exposures.
66
Appendix
A
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.
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 a 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 it will subject
the Fund to greater risks than if the 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 Emerging Countries. A Fund 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, or their affiliates and 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
67
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.
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 a 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 a Fund has delivered or a
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, a 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. A significant portion of a Fund’s currency exposure in emerging
countries may not be covered by those techniques.
Foreign
Custody Risk. A 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 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. A Fund
may, to the extent consistent with its investment policy, invest in derivative
instruments, including without limitation, options, futures, options on futures,
forwards, swaps, options on swaps, structured securities and other derivatives.
Derivatives may be used for both hedging and non-hedging purposes (that is, to
seek to increase total return), although suitable derivative instruments may not
always be available to the Investment Adviser for these purposes. Losses from
derivative instruments can result from a lack of correlation between changes in
the value of derivative instruments and the portfolio assets (if any) being
hedged, the potential illiquidity of the markets for derivative instruments, the
failure of the counterparty to perform its contractual obligations, or the risks
related to leverage factors associated with such transactions. Derivatives are
also subject to risks arising from margin requirements, which include the risk
that a Fund will be required to pay additional margin or set aside additional
collateral to maintain open derivative positions and the risk of loss by a Fund
of margin deposits in the event of the bankruptcy or other similar insolvency
with respect to a broker or counterparty with whom the Fund has an open
derivative position. Losses may also arise if a Fund receives 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 Funds may be
68
Appendix
A
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 volatility and more likely subject to changes in tax treatment than
other investments. For these reasons, the Investment Adviser’s attempts to hedge
portfolio risks through the use of derivative instruments may not be successful,
and the Investment Adviser may choose not to hedge portfolio risks. Using
derivatives for non-hedging purposes presents greater risk of loss than
derivatives used for hedging purposes.
Risks
of Illiquid Investments. A 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, a 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 the Fund to
exceed this limit, a 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. 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 a Fund 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.
Fixed
income securities rated BB+ or Ba1 or below (or comparable unrated securities)
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. A Fund 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 a Fund’s
assets grow, the effect of the Fund’s investments in IPOs on the Fund’s
performance probably will decline, which could reduce the Fund’s performance.
Because of the price volatility of IPO shares, a Fund may choose to hold IPO
shares for a very short period of time. This may increase the turnover of a
Fund’s portfolio and may lead to increased expenses to a Fund, such as
commissions and transaction costs. The Funds will generally be subject to tax on
the sale of IPO shares at a gain. 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
69
some IPOs
may make it more difficult for the 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. A Fund
may, for temporary defensive purposes, 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 Exchange-Traded Notes. ETNs are
senior, unsecured, unsubordinated debt securities issued by a sponsoring
financial institution. The returns on an ETN are linked to the performance of
particular securities, market indices, or strategies, minus applicable fees.
ETNs are traded on an exchange (e.g., the New York Stock Exchange) during normal
trading hours; however, investors may also hold an ETN until maturity. At
maturity, the issuer of an ETN pays to the investor a cash amount equal to the
principal amount, subject to application of the relevant securities, index or
strategy factor. Similar to other debt securities, ETNs have a maturity date and
are backed only by the credit of the sponsoring institution. ETNs are subject to
credit risk. The value of an ETN may be influenced by time to maturity, level of
supply and demand for the ETN, volatility and lack of liquidity in underlying
assets, changes in the applicable interest rates, changes in the issuer’s credit
rating, and economic, legal, political or geographic events that affect the
underlying assets. When a Fund invests in ETNs, it will bear its proportionate
share of any fees and expenses borne by the ETN. Although an ETN is a debt
security, it is unlike a typical bond, in that there are no periodic interest
payments and principal is not protected. The timing and character of income and
gains from ETNs may be affected by future legislation.
|
C. Portfolio
Securities and Techniques |
This
section provides further information on certain types of securities and
investment techniques that may be used by a Fund, including their associated
risks.
A Fund may
purchase other types of securities or instruments similar to those described in
this section if otherwise consistent with the Fund’s investment objective and
policies. Further information is provided in the SAI, which is available upon
request.
Convertible
Securities. A 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.
Structured
Securities. A 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 a 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
70
Appendix
A
structured
securities may fail to perform its contractual obligations. Certain issuers of
structured products may be deemed to be investment companies as defined in the
Investment Company Act. As a result, a Fund’s investments in structured
securities may be subject to the limits applicable to investments in other
investment companies.
Structured
securities are considered hybrid instruments because they are derivative
instruments, the value of which depends on, or is derived from or linked to, the
value of an underlying asset, interest rate index or commodity. Commodity-linked
notes are hybrid instruments because the principal and/or interest payments on
those notes is linked to the value of the individual commodities, futures
contracts or the performance of one or more commodity indices.
Structured
securities include, but are not limited to, equity linked notes. An equity
linked note is a note whose performance is tied to a single stock, a stock index
or a basket of stocks. Equity linked notes combine the principal protection
normally associated with fixed income investments with the potential for capital
appreciation normally associated with equity investments. Upon the maturity of
the note, the holder generally receives a return of principal based on the
capital appreciation of the linked securities. Depending on the terms of the
note, equity linked notes may also have a “cap” or “floor” on the maximum
principal amount to be repaid to holders, irrespective of the performance of the
underlying linked securities. For example, a note may guarantee the repayment of
the original principal amount invested (even if the underlying linked securities
have negative performance during the note’s term), but may cap the maximum
payment at maturity at a certain percentage of the issuance price or the return
of the underlying linked securities. Alternatively, the note may not guarantee a
full return on the original principal, but may offer a greater participation in
any capital appreciation of the underlying linked securities. The terms of an
equity linked note may also provide for periodic interest payments to holders at
either a fixed or floating rate. The secondary market for equity linked notes
may be limited, and the lack of liquidity in the secondary market may make these
securities difficult to dispose of and to value. Equity linked notes will be
considered equity securities for purposes of the Fund’s investment objective and
policies.
REITs. A 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 and Securities Indices. 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. A Fund may write (sell) call and
put options and purchase put and call options on any securities in which the
Fund may invest or on any securities index consisting of securities in which it
may invest.
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 markets. If the Investment Adviser is
incorrect in its expectation of changes in market prices or determination of the
correlation between the instruments or indices on which options are written and
purchased and the instruments in a Fund’s investment portfolio, the Fund may
incur losses that it would not otherwise incur. The use of options can also
increase a Fund’s transaction costs. Options written or purchased by a Fund may
be traded on U.S. exchanges. 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. A Fund may engage in futures transactions on
both U.S. and foreign exchanges.
A Fund may
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
71
and
policies. A Fund may also enter into closing purchase and sale transactions with
respect to such contracts and options. The Investment Adviser, on behalf of each
Fund, has filed a notice of eligibility claiming an exclusion from the
definition of the term “commodity pool operator” (“CPO”) under the Commodity
Exchange Act (“CEA”), and therefore is not subject to registration or regulation
as a CPO under the CEA.
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
the 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.
Interest
Rate Swaps, Credit Swaps, Total Return Swaps, Equity Swaps, Options on Swaps and
Interest Rate Caps, Floors and Collars. A Fund may
enter into swap transactions and option agreements, including interest rate
swaps, credit swaps, total return swaps, options on swaps and interest rate
caps, floors and collars. Interest rate swaps involve the exchange by a Fund
with another party of their respective commitments to pay or receive interest,
such as an exchange of fixed-rate payments for floating rate payments. Credit
swaps involve the receipt of floating or fixed rate payments in exchange for
assuming potential credit losses on an underlying security or pool of
securities. Credit swaps give one party to a transaction (the buyer of the
credit swap) the right to dispose of or acquire an asset (or group of assets or
exposure to the performance of an index), or the right to receive a payment from
the other party, upon the occurrence of specified credit events. Total return
swaps give a party the right to receive the appreciation in the value of a
specified security, index or other instrument in return for a fee paid to the
counterparty, which will typically be based on an agreed upon interest rate. If
the underlying asset in a total return swap declines in value over the term of
the swap, a party may also be required to pay the dollar value of that decline
to the counterparty. 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 the Funds 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. A Fund may also purchase and write (sell)
options contracts on swaps, commonly referred to as swaptions. A swaption is an
option to enter into a swap agreement. Like other types of options, the buyer of
a swaption pays a non-refundable premium for the option and obtains the right,
but not the obligation, to enter into an underlying swap or to modify the terms
of an existing swap on agreed-upon terms. The seller of a swaption, in exchange
for the premium, becomes obligated (if the option is exercised) to enter into or
modify an underlying swap on agreed-upon terms, which generally entails a
greater risk of loss than the Fund incurs in buying a swaption.
The
purchase of an interest rate cap entitles the purchaser, to the extent that a
specified index exceeds a predetermined interest rate, to receive payment of
interest on a notional principal amount from the party selling such interest
rate cap. The purchase of an interest rate floor entitles the purchaser, to the
extent that a specified index falls below a predetermined interest rate, to
receive payments of interest on a notional principal amount from the party
selling the interest rate floor. An interest rate collar is the combination of a
cap and a floor that preserves a certain return within a predetermined range of
interest rates.
A Fund may
enter into the transactions described above for hedging purposes or to seek to
increase total return. As an example, when a Fund is the buyer of a credit
default swap (commonly known as buying protection), it may make periodic
payments to the seller of the credit default swap to obtain protection against a
credit default on a specified underlying asset (or group of assets). If a
default occurs, the seller of a credit default swap may be required to pay a
Fund the notional amount of the credit default swap on a specified security (or
group of securities). On the other hand, when a Fund is a seller of a credit
default swap (commonly known as selling protection), in addition to the credit
exposure the Fund has on the other assets held in its portfolio, the Fund is
also subject to the credit exposure on the notional amount of the swap since, in
the event of a credit default, the Fund may be required to pay the notional
amount of the credit default swap on a specified security (or group of
securities) to the buyer of the credit default swap.
72
Appendix
A
The use of
interest rate, credit, index, total return and equity swaps, options on swaps,
and interest rate caps, floors and collars is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions. If the Investment Adviser is
incorrect in its forecasts of market values and interest rates, or in its
evaluation of the creditworthiness of swap counterparties (with respect to
bilateral swap transactions) and the issuers of the underlying assets, the
investment performance of a Fund would be less favorable than it would have been
if these investment techniques were not used.
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 a 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
a Fund and its counterparties posting higher amounts for uncleared
swaps.
When-Issued
Securities and Forward Commitments. A 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 a Fund at the time of
entering into the transaction. A forward commitment involves the entering into a
contract to purchase or sell securities for a fixed price at a future date
beyond the customary settlement period.
The
purchase of securities on a when-issued or forward commitment basis involves a
risk of loss if the value of the security to be purchased declines before the
settlement date. Conversely, the sale of securities on a forward commitment
basis involves the risk that the value of the securities sold may increase
before the settlement date. Although a Fund will generally purchase securities
on a when-issued or forward commitment basis with the intention of acquiring the
securities for its portfolio, the Fund may dispose of when-issued securities or
forward commitments prior to settlement if the Investment Adviser deems it
appropriate.
Repurchase
Agreements. Repurchase
agreements involve the purchase of securities subject to the seller’s agreement
to repurchase them at a mutually agreed upon date and price. A Fund may enter
into repurchase agreements with eligible counterparties which furnish collateral
at least equal in value or market price to the amount of their repurchase
obligation. The collateral may consist of any type of security (government or
corporate) of any or no credit rating. Repurchase agreements involving
obligations other than U.S. Government Securities (such as foreign securities,
commercial paper, corporate bonds, mortgage loans and equities) may be subject
to special risks and may not have the benefit of certain protections in the
event of the counterparty’s insolvency.
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.
A Fund,
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.
Short
Sales Against-the-Box. A Fund may
make short sales against-the-box. A short sale against-the-box means that at all
times when a short position is open a 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. A Fund may
invest in preferred stock, warrants and stock purchase rights (or “rights”).
Preferred stocks are securities that represent an ownership interest providing
the holder with claims on the issuer’s earnings and assets before common stock
owners but after bond owners. Unlike debt securities, the obligations of an
issuer of preferred stock, including dividend and other payment obligations, may
not typically be accelerated by the holders of such preferred stock on the
occurrence of an event of default or other non-compliance by the issuer of the
preferred stock.
Warrants
and other rights are options to buy a stated number of shares of common stock at
a specified price at any time during the life of the warrant or right. The
holders of warrants and rights have no voting rights, receive no dividends and
have no rights with respect to the assets of the issuer.
Other
Investment Companies. A 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 a Fund
acquiring more than 3% of the voting shares of any other investment company, and
a prohibition on investing more than 5% of the Fund’s total assets in securities
of any one investment company or more than 10% of its total assets in securities
of all investment companies.
73
Subject to
applicable law and/or pursuant to an exemptive order obtained from the SEC or
under an exemptive rule adopted by the SEC, a Fund may invest in certain other
investment companies (including ETFs and money market funds) and business
development companies beyond the statutory limits described above or otherwise
provided that certain conditions are met. Some of those investment companies may
be funds for which the Investment Adviser or any of its affiliates serves as
investment adviser, administrator or distributor.
Additionally,
to the extent that any Fund serves as an “acquired fund” to another Goldman
Sachs Fund or unaffiliated investment company, the Fund’s ability to invest in
other investment companies and private funds may be limited and, under these
circumstances, the Fund’s investments in other investment companies and private
funds will be consistent with applicable law and/or exemptive rules adopted by
or exemptive orders obtained from the SEC. For example, to the extent the Fund
serves as an acquired fund in a fund of funds arrangement in reliance on Rule
12d1-4 under the Investment Company Act, the Fund would be prohibited from
purchasing or otherwise acquiring the securities of an investment company or
private fund if, after such purchase or acquisition, the aggregate value of the
Fund’s investments in such investment companies and private funds would exceed
10% of the value of the Fund’s total assets, subject to limited exceptions
(including for investments in money market funds).
The use of
ETFs is generally intended to help a Fund match the total return of the
particular market segments or indices represented by those ETFs, although that
may not be the result. Most ETFs are passively-managed investment companies
whose shares are purchased and sold on a securities exchange. An ETF generally
represents a portfolio of securities designed to track a particular market
segment or index. An investment in an ETF generally presents the same primary
risks as an investment in a conventional fund (i.e., one that is not
exchange-traded) that has the same investment objectives, strategies and
policies. In addition, an ETF may fail to accurately track the market segment or
index that underlies its investment objective. The price of an ETF can
fluctuate, and the 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. A 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 investments in companies with an established
operating record.
Corporate
Debt Obligations. Corporate
debt obligations include bonds, notes, debentures, commercial paper and other
obligations of corporations to pay interest and repay principal. A 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. A 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. A 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.
74
Appendix
A
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 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 rate 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. A 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. A Fund may also invest in separately issued interests in custodial
receipts and trust certificates.
Non-Investment
Grade Fixed Income Securities.
Non-investment grade fixed-income securities and unrated securities of
comparable credit quality (commonly referred to 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 corporate or municipal 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 a Fund’s ability to dispose
of particular portfolio investments. A less liquid secondary market also may
make it more difficult for a Fund to obtain precise valuations of the high yield
securities in its portfolio.
75
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.
Borrowings. A Fund
can borrow money from banks and other financial institutions in amounts not
exceeding one-third of its total assets (including the amount borrowed or
received), for temporary or emergency purposes.
Mortgage
Dollar Rolls. A Fund may
enter into mortgage dollar rolls. A mortgage dollar roll involves the sale by a
Fund of securities for delivery in the current month. A Fund simultaneously
contracts with the same counterparty to repurchase substantially similar (same
type, coupon and maturity) but not identical securities on a specified future
date. During the roll period, a Fund loses the right to receive principal and
interest paid on the securities sold. However, a Fund benefits to the extent of
any difference between (a) the price received for the securities sold and (b)
the lower forward price for the future purchase and/or fee income plus the
interest earned on the cash proceeds of the securities sold. Unless the benefits
of a mortgage dollar roll exceed the income, capital appreciation and gain or
loss due to mortgage prepayments that would have been realized on the securities
sold as part of the roll, the use of this technique will diminish a Fund’s
performance.
Successful
use of mortgage dollar rolls depends upon the Investment Adviser’s ability to
predict correctly interest rates and mortgage prepayments. If the Investment
Adviser is incorrect in its prediction, a Fund may experience a loss. A Fund
does not currently intend to enter into mortgage dollar rolls for financing and
does not treat them as borrowings.
Lending
of Portfolio Securities. The Energy
Infrastructure Fund may engage in securities lending. Securities lending
involves the lending of securities owned by the Fund to financial institutions
such as certain broker-dealers including, as permitted by the SEC, Goldman
Sachs. The borrowers are required to secure their loan continuously with cash,
cash equivalents, U.S. government securities or letters of credit in an amount
at least equal to the market value of the securities loaned. Cash collateral may
be invested by the Fund in short-term investments, including registered and
unregistered investment pools managed by the Investment Adviser, its affiliates
or the Fund’s 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 the Fund
will be responsible for any loss that might result from its investment of the
borrowers’ collateral. If the Investment Adviser determines to make securities
loans, the value of the securities loaned may not exceed 33 1/3% of the value of
the total assets of the Fund (including the loan collateral). 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.
The Energy
Infrastructure Fund may lend its securities to increase its income. The Fund
may, however, experience delay in the recovery of their securities or incur a
loss if the institution with which they have engaged in a portfolio loan
transaction becomes insolvent or breaches its agreement with the Fund or an
agent.
76
Appendix
B
Financial
Highlights
The
financial highlights tables are intended to help you understand the Fund’s
financial performance for the past five years (or less if the Fund has
been in operation for less than five years). Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned or lost on an investment
in the Fund (assuming reinvestment of all dividends and distributions). The
information for the Fund has been audited by PricewaterhouseCoopers LLP, whose
report, along with the Fund’s financial statements, is included in the Fund’s
most recent annual report (available upon request).
|
|
Goldman
Sachs MLP Energy Infrastructure Fund | |||||||||
|
|
Class
A Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data* |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$28.86 |
$22.75 |
$17.15 |
$26.10 |
$31.90 | |||||
|
Net
investment loss(a) |
(0.13
) |
(0.07
) |
(0.13
)(b) |
(0.15
) |
(0.30
) | |||||
|
Net
realized and unrealized gain (loss) |
4.45 |
7.88 |
7.23 |
(7.86
) |
(3.00
) | |||||
|
Total
from investment operations |
4.32 |
7.81 |
7.10 |
(8.01
) |
(3.30
) | |||||
|
Distributions
to shareholders from net investment income |
(2.12
) |
(1.70
) |
(1.50
) |
— |
(0.15
) | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.94
) |
(2.35
) | |||||
|
Total
distributions |
(2.12
) |
(1.70
) |
(1.50
) |
(0.94
) |
(2.50
) | |||||
|
Net
asset value, end of year |
$31.06 |
$28.86 |
$22.75 |
$17.15 |
$26.10 | |||||
|
Total
return(c) |
15.84
% |
34.91
% |
41.88
% |
(27.83
)% |
(11.06
)% | |||||
|
Net
assets, end of year (in 000s) |
$59,874 |
$53,751 |
$39,835 |
$34,024 |
$60,112 | |||||
|
Ratio
of net expenses to average net assets after tax expense(d) |
2.42
% |
2.59
% |
0.42
% |
2.61
% |
1.67
% | |||||
|
Ratio
of total expenses to average net assets after tax expense(d) |
2.42
% |
2.59
% |
0.43
% |
2.64
% |
1.67
% | |||||
|
Ratio
of net expenses to average net assets before tax
expense |
1.43
% |
1.45
% |
1.45
% |
1.49
% |
1.44
% | |||||
|
Ratio
of net investment loss to average net assets(e) |
(0.47
)% |
(0.26
)% |
(0.60
)% |
(0.81
)% |
(1.02
)% | |||||
|
Portfolio
turnover rate(f) |
102
% |
117
% |
166
% |
139
% |
51
% | |||||
|
* |
On
June 5, 2020, the MLP Energy Infrastructure Fund effected a 5-for-1
reverse share split. All per share data prior to June 5, 2020 has been
adjusted to
reflect
the reverse share split. |
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Reflects
income recognized from special dividends which amounted to $0.04 per share
and 0.16% 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) |
Current
and deferred tax expense/benefit for the ratio calculation is derived from
the net investment income (loss), and realized and unrealized gains
(losses). |
|
(e) |
Current
and deferred tax benefit for the ratio calculation is derived from net
investment income (loss) only. |
|
(f) |
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. |
77
|
|
Goldman
Sachs MLP Energy Infrastructure Fund | |||||||||
|
|
Class
C Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data* |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$26.01 |
$20.79 |
$15.88 |
$24.55 |
$30.35 | |||||
|
Net
investment loss(a) |
(0.31
) |
(0.24
) |
(0.27
)(b) |
(0.29
) |
(0.50
) | |||||
|
Net
realized and unrealized gain (loss) |
3.96 |
7.16 |
6.68 |
(7.44
) |
(2.80
) | |||||
|
Total
from investment operations |
3.65 |
6.92 |
6.41 |
(7.73
) |
(3.30
) | |||||
|
Distributions
to shareholders from net investment income |
(2.12
) |
(1.70
) |
(1.50
) |
— |
(0.15
) | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.94
) |
(2.35
) | |||||
|
Total
distributions |
(2.12
) |
(1.70
) |
(1.50
) |
(0.94
) |
(2.50
) | |||||
|
Net
asset value, end of year |
$27.54 |
$26.01 |
$20.79 |
$15.88 |
$24.55 | |||||
|
Total
return(c) |
14.97
% |
33.89
% |
40.85
% |
(28.47
)% |
(11.64
)% | |||||
|
Net
assets, end of year (in 000s) |
$16,025 |
$22,030 |
$25,647 |
$24,897 |
$58,044 | |||||
|
Ratio
of net expenses to average net assets after tax expense(d) |
3.20
% |
3.34
% |
1.16
% |
3.37
% |
2.42
% | |||||
|
Ratio
of total expenses to average net assets after tax expense(d) |
3.20
% |
3.34
% |
1.18
% |
3.39
% |
2.42
% | |||||
|
Ratio
of net expenses to average net assets before tax
expense |
2.18
% |
2.20
% |
2.20
% |
2.24
% |
2.19
% | |||||
|
Ratio
of net investment loss to average net assets(e) |
(1.23
)% |
(1.00
)% |
(1.35
)% |
(1.63
)% |
(1.77
)% | |||||
|
Portfolio
turnover rate(f) |
102
% |
117
% |
166
% |
139
% |
51
% | |||||
|
* |
On
June 5, 2020, the MLP Energy Infrastructure Fund effected a 5-for-1
reverse share split. All per share data prior to June 5, 2020 has been
adjusted to
reflect
the reverse share split. |
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Reflects
income recognized from special dividends which amounted to $0.04 per share
and 0.16% 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) |
Current
and deferred tax expense/benefit for the ratio calculation is derived from
the net investment income (loss), and realized and unrealized gains
(losses). |
|
(e) |
Current
and deferred tax benefit for the ratio calculation is derived from net
investment income (loss) only. |
|
(f) |
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. |
78
Appendix
B
|
|
Goldman
Sachs MLP Energy Infrastructure Fund | |||||||||
|
|
Institutional
Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data* |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$30.43 |
$23.82 |
$17.84 |
$26.95 |
$32.75 | |||||
|
Net
investment income (loss)(a) |
(0.04
) |
0.03 |
(0.05
)(b) |
(0.11
) |
(0.20
) | |||||
|
Net
realized and unrealized gain (loss) |
4.72 |
8.28 |
7.53 |
(8.06
) |
(3.10
) | |||||
|
Total
from investment operations |
4.68 |
8.31 |
7.48 |
(8.17
) |
(3.30
) | |||||
|
Distributions
to shareholders from net investment income |
(2.12
) |
(1.70
) |
(1.50
) |
— |
(0.15
) | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.94
) |
(2.35
) | |||||
|
Total
distributions |
(2.12
) |
(1.70
) |
(1.50
) |
(0.94
) |
(2.50
) | |||||
|
Net
asset value, end of year |
$32.99 |
$30.43 |
$23.82 |
$17.84 |
$26.95 | |||||
|
Total
return(c) |
16.22
% |
35.45
% |
42.40
% |
(27.54
)% |
(10.77
)% | |||||
|
Net
assets, end of year (in 000s) |
$192,787 |
$198,807 |
$160,785 |
$182,236 |
$502,633 | |||||
|
Ratio
of net expenses to average net assets after tax expense(d) |
2.08
% |
2.22
% |
0.05
% |
2.22
% |
1.28
% | |||||
|
Ratio
of total expenses to average net assets after tax expense(d) |
2.08
% |
2.22
% |
0.06
% |
2.25
% |
1.28
% | |||||
|
Ratio
of net expenses to average net assets before tax
expense |
1.07
% |
1.08
% |
1.09
% |
1.10
% |
1.05
% | |||||
|
Ratio
of net investment income (loss) to average net assets(e) |
(0.12
)% |
0.12
% |
(0.21
)% |
(0.56
)% |
(0.61
)% | |||||
|
Portfolio
turnover rate(f) |
102
% |
117
% |
166
% |
139
% |
51
% | |||||
|
* |
On
June 5, 2020, the MLP Energy Infrastructure Fund effected a 5-for-1
reverse share split. All per share data prior to June 5, 2020 has been
adjusted to
reflect
the reverse share split. |
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Reflects
income recognized from special dividends which amounted to $0.04 per share
and 0.16% 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) |
Current
and deferred tax expense/benefit for the ratio calculation is derived from
the net investment income (loss), and realized and unrealized gains
(losses). |
|
(e) |
Current
and deferred tax benefit for the ratio calculation is derived from net
investment income (loss) only. |
|
(f) |
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. |
79
|
|
Goldman
Sachs MLP Energy Infrastructure Fund | |||||||||
|
|
Investor
Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data* |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$29.89 |
$23.45 |
$17.60 |
$26.65 |
$32.50 | |||||
|
Net
investment loss(a) |
(0.06
) |
—
(b) |
(0.08
)(c) |
(0.15
) |
(0.25
) | |||||
|
Net
realized and unrealized gain (loss) |
4.62 |
8.14 |
7.43 |
(7.96
) |
(3.10
) | |||||
|
Total
from investment operations |
4.56 |
8.14 |
7.35 |
(8.11
) |
(3.35
) | |||||
|
Distributions
to shareholders from net investment income |
(2.12
) |
(1.70
) |
(1.50
) |
— |
(0.15
) | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.94
) |
(2.35
) | |||||
|
Total
distributions |
(2.12
) |
(1.70
) |
(1.50
) |
(0.94
) |
(2.50
) | |||||
|
Net
asset value, end of year |
$32.33 |
$29.89 |
$23.45 |
$17.60 |
$26.65 | |||||
|
Total
return(d) |
16.11
% |
35.28
% |
42.23
% |
(27.63
)% |
(11.01
)% | |||||
|
Net
assets, end of year (in 000s) |
$53,118 |
$59,725 |
$40,346 |
$32,396 |
$98,506 | |||||
|
Ratio
of net expenses to average net assets after tax expense(e) |
2.16
% |
2.34
% |
0.17
% |
2.36
% |
1.42
% | |||||
|
Ratio
of total expenses to average net assets after tax expense(e) |
2.16
% |
2.34
% |
0.18
% |
2.38
% |
1.42
% | |||||
|
Ratio
of net expenses to average net assets before tax
expense |
1.18
% |
1.20
% |
1.20
% |
1.23
% |
1.19
% | |||||
|
Ratio
of net investment loss to average net assets(f) |
(0.20
)% |
(0.01
)% |
(0.36
)% |
(0.73
)% |
(0.77
)% | |||||
|
Portfolio
turnover rate(g) |
102
% |
117
% |
166
% |
139
% |
51
% | |||||
|
* |
On
June 5, 2020, the MLP Energy Infrastructure Fund effected a 5-for-1
reverse share split. All per share data prior to June 5, 2020 has been
adjusted to
reflect
the reverse share split. |
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Less
than $0.005 per share. |
|
(c) |
Reflects
income recognized from special dividends which amounted to $0.04 per share
and 0.16% of average net assets. |
|
(d) |
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. |
|
(e) |
Current
and deferred tax expense/benefit for the ratio calculation is derived from
the net investment income (loss), and realized and unrealized gains
(losses). |
|
(f) |
Current
and deferred tax benefit for the ratio calculation is derived from net
investment income (loss) only. |
|
(g) |
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. |
80
Appendix
B
|
|
Goldman
Sachs MLP Energy Infrastructure Fund | |||||||||
|
|
Class
R6 Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data* |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$30.47 |
$23.85 |
$17.86 |
$27.00 |
$32.75 | |||||
|
Net
investment income (loss)(a) |
(0.03
) |
0.04 |
(0.04
)(b) |
(0.05
) |
(0.20
) | |||||
|
Net
realized and unrealized gain (loss) |
4.73 |
8.28 |
7.53 |
(8.15
) |
(3.05
) | |||||
|
Total
from investment operations |
4.70 |
8.32 |
7.49 |
(8.20
) |
(3.25
) | |||||
|
Distributions
to shareholders from net investment income |
(2.12
) |
(1.70
) |
(1.50
) |
— |
(0.15
) | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.94
) |
(2.35
) | |||||
|
Total
distributions |
(2.12
) |
(1.70
) |
(1.50
) |
(0.94
) |
(2.50
) | |||||
|
Net
asset value, end of year |
$33.05 |
$30.47 |
$23.85 |
$17.86 |
$27.00 | |||||
|
Total
return(c) |
16.26
% |
35.45
% |
42.41
% |
(27.60
)% |
(10.60
)% | |||||
|
Net
assets, end of year (in 000s) |
$115,489 |
$126,621 |
$138,288 |
$181,968 |
$165,252 | |||||
|
Ratio
of net expenses to average net assets after tax expense(d) |
2.06
% |
2.21
% |
0.04
% |
2.23
% |
1.26
% | |||||
|
Ratio
of total expenses to average net assets after tax expense(d) |
2.06
% |
2.21
% |
0.05
% |
2.26
% |
1.26
% | |||||
|
Ratio
of net expenses to average net assets before tax
expense |
1.06
% |
1.07
% |
1.08
% |
1.11
% |
1.04
% | |||||
|
Ratio
of net investment income (loss) to average net assets(e) |
(0.10
)% |
0.13
% |
(0.17
)% |
(0.29
)% |
(0.66
)% | |||||
|
Portfolio
turnover rate(f) |
102
% |
117
% |
166
% |
139
% |
51
% | |||||
|
* |
On
June 5, 2020, the MLP Energy Infrastructure Fund effected a 5-for-1
reverse share split. All per share data prior to June 5, 2020 has been
adjusted to
reflect
the reverse share split. |
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Reflects
income recognized from special dividends which amounted to $0.04 per share
and 0.16% 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) |
Current
and deferred tax expense/benefit for the ratio calculation is derived from
the net investment income (loss), and realized and unrealized gains
(losses). |
|
(e) |
Current
and deferred tax benefit for the ratio calculation is derived from net
investment income (loss) only. |
|
(f) |
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. |
81
|
|
Goldman
Sachs MLP Energy Infrastructure Fund | |||||||||
|
|
Class
R Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data* |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$27.90 |
$22.09 |
$16.72 |
$25.60 |
$31.40 | |||||
|
Net
investment loss(a) |
(0.21
) |
(0.13
) |
(0.18
)(b) |
(0.17
) |
(0.40
) | |||||
|
Net
realized and unrealized gain (loss) |
4.29 |
7.64 |
7.05 |
(7.77
) |
(2.90
) | |||||
|
Total
from investment operations |
4.08 |
7.51 |
6.87 |
(7.94
) |
(3.30
) | |||||
|
Distributions
to shareholders from net investment income |
(2.12
) |
(1.70
) |
(1.50
) |
— |
(0.15
) | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.94
) |
(2.35
) | |||||
|
Total
distributions |
(2.12
) |
(1.70
) |
(1.50
) |
(0.94
) |
(2.50
) | |||||
|
Net
asset value, end of year |
$29.86 |
$27.90 |
$22.09 |
$16.72 |
$25.60 | |||||
|
Total
return(c) |
15.52
% |
34.59
% |
41.57
% |
(28.11
)% |
(11.24
)% | |||||
|
Net
assets, end of year (in 000s) |
$1,000 |
$843 |
$731 |
$796 |
$1,012 | |||||
|
Ratio
of net expenses to average net assets after tax expense(d) |
2.72
% |
2.84
% |
0.66
% |
2.87
% |
1.92
% | |||||
|
Ratio
of total expenses to average net assets after tax expense(d) |
2.72
% |
2.85
% |
0.67
% |
2.90
% |
1.92
% | |||||
|
Ratio
of net expenses to average net assets before tax
expense |
1.68
% |
1.70
% |
1.70
% |
1.74
% |
1.69
% | |||||
|
Ratio
of net investment loss to average net assets(e) |
(0.76
)% |
(0.50
)% |
(0.85
)% |
(0.94
)% |
(1.31
)% | |||||
|
Portfolio
turnover rate(f) |
102
% |
117
% |
166
% |
139
% |
51
% | |||||
|
* |
On
June 5, 2020, the MLP Energy Infrastructure Fund effected a 5-for-1
reverse share split. All per share data prior to June 5, 2020 has been
adjusted to
reflect
the reverse share split. |
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Reflects
income recognized from special dividends which amounted to $0.04 per share
and 0.16% 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) |
Current
and deferred tax expense/benefit for the ratio calculation is derived from
the net investment income (loss), and realized and unrealized gains
(losses). |
|
(e) |
Current
and deferred tax benefit for the ratio calculation is derived from net
investment income (loss) only. |
|
(f) |
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. |
82
Appendix
B
|
|
Goldman
Sachs Energy Infrastructure Fund | |||||||||
|
|
Class
A Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$11.56 |
$9.56 |
$7.18 |
$8.64 |
$9.26 | |||||
|
Net
investment income(a) |
0.15 |
0.07 |
0.06 |
0.03 |
0.12 | |||||
|
Net
realized and unrealized gain (loss) |
0.77 |
2.70 |
2.71 |
(1.16
)(b) |
(0.36
)(b) | |||||
|
Total
from investment operations |
0.92 |
2.77 |
2.77 |
(1.13
) |
(0.24
) | |||||
|
Distributions
to shareholders from net investment income |
(0.43
) |
(0.37
) |
(0.39
) |
(0.05
) |
(0.23
) | |||||
|
Distributions
to shareholders from net realized gains |
(0.30
) |
(0.40
) |
— |
(0.05
) |
— | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.23
) |
(0.15
) | |||||
|
Total
distributions |
(0.73
) |
(0.77
) |
(0.39
) |
(0.33
) |
(0.38
) | |||||
|
Net
asset value, end of year |
$11.75 |
$11.56 |
$9.56 |
$7.18 |
$8.64 | |||||
|
Total
return(c) |
8.63
% |
30.74
% |
38.55
% |
(13.05
)% |
(2.82
)% | |||||
|
Net
assets, end of year (in 000s) |
$2,442 |
$2,296 |
$617 |
$68 |
$55 | |||||
|
Ratio
of net expenses to average net assets |
1.47
% |
1.47
% |
1.47
% |
1.48
% |
1.50
% | |||||
|
Ratio
of total expenses to average net assets |
1.52
% |
1.54
% |
1.53
% |
1.73
% |
2.47
% | |||||
|
Ratio
of net investment income to average net assets |
1.40
% |
0.67
% |
0.68
% |
0.35
% |
1.24
% | |||||
|
Portfolio
turnover rate(d) |
41
% |
56
% |
58
% |
121
% |
59
% | |||||
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Calculation
of the net gain (loss) per share (both realized and unrealized) does not
correlate to the aggregate realized and unrealized gain (loss) presented
in
the Statement
of Operations due to the timing of subscriptions and redemptions of Fund
shares in relation to fluctuations in the market value of the
portfolio. |
|
(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.
If
such transactions were included, the Fund's portfolio turnover rate may be
higher. |
83
|
|
Goldman
Sachs Energy Infrastructure Fund | |||||||||
|
|
Class
C Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$11.60 |
$9.58 |
$7.20 |
$8.64 |
$9.26 | |||||
|
Net
investment income (loss)(a) |
0.07 |
(0.01
) |
0.01 |
(0.02
) |
0.08 | |||||
|
Net
realized and unrealized gain (loss) |
0.77 |
2.71 |
2.69 |
(1.16
)(b) |
(0.39
)(b) | |||||
|
Total
from investment operations |
0.84 |
2.70 |
2.70 |
(1.18
) |
(0.31
) | |||||
|
Distributions
to shareholders from net investment income |
(0.35
) |
(0.28
) |
(0.32
) |
(0.02
) |
(0.19
) | |||||
|
Distributions
to shareholders from net realized gains |
(0.30
) |
(0.40
) |
— |
(0.05
) |
— | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.19
) |
(0.12
) | |||||
|
Total
distributions |
(0.65
) |
(0.68
) |
(0.32
) |
(0.26
) |
(0.31
) | |||||
|
Net
asset value, end of year |
$11.79 |
$11.60 |
$9.58 |
$7.20 |
$8.64 | |||||
|
Total
return(c) |
7.85
% |
29.76
% |
37.44
% |
(13.60
)% |
(3.63
)% | |||||
|
Net
assets, end of year (in 000s) |
$520 |
$556 |
$448 |
$135 |
$154 | |||||
|
Ratio
of net expenses to average net assets |
2.22
% |
2.22
% |
2.22
% |
2.23
% |
2.25
% | |||||
|
Ratio
of total expenses to average net assets |
2.27
% |
2.29
% |
2.28
% |
2.48
% |
3.17
% | |||||
|
Ratio
of net investment income (loss) to average net
assets |
0.64
% |
(0.12
)% |
0.16
% |
(0.34
)% |
0.89
% | |||||
|
Portfolio
turnover rate(d) |
41
% |
56
% |
58
% |
121
% |
59
% | |||||
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Calculation
of the net gain (loss) per share (both realized and unrealized) does not
correlate to the aggregate realized and unrealized gain (loss) presented
in
the Statement
of Operations due to the timing of subscriptions and redemptions of Fund
shares in relation to fluctuations in the market value of the
portfolio. |
|
(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.
If
such transactions were included, the Fund's portfolio turnover rate may be
higher. |
84
Appendix
B
|
|
Goldman
Sachs Energy Infrastructure Fund | |||||||||
|
|
Institutional
Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$11.62 |
$9.59 |
$7.19 |
$8.65 |
$9.26 | |||||
|
Net
investment income(a) |
0.21 |
0.11 |
0.10 |
0.05 |
0.15 | |||||
|
Net
realized and unrealized gain (loss) |
0.75 |
2.72 |
2.70 |
(1.16
)(b) |
(0.35
)(b) | |||||
|
Total
from investment operations |
0.96 |
2.83 |
2.80 |
(1.11
) |
(0.20
) | |||||
|
Distributions
to shareholders from net investment income |
(0.47
) |
(0.40
) |
(0.40
) |
(0.05
) |
(0.25
) | |||||
|
Distributions
to shareholders from net realized gains |
(0.30
) |
(0.40
) |
— |
(0.05
) |
— | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.25
) |
(0.16
) | |||||
|
Total
distributions |
(0.77
) |
(0.80
) |
(0.40
) |
(0.35
) |
(0.41
) | |||||
|
Net
asset value, end of year |
$11.81 |
$11.62 |
$9.59 |
$7.19 |
$8.65 | |||||
|
Total
return(c) |
9.07
% |
31.17
% |
39.03
% |
(12.74
)% |
(2.36
)% | |||||
|
Net
assets, end of year (in 000s) |
$4,311 |
$1,240 |
$1,323 |
$2,415 |
$2,606 | |||||
|
Ratio
of net expenses to average net assets |
1.10
% |
1.10
% |
1.10
% |
1.10
% |
1.11
% | |||||
|
Ratio
of total expenses to average net assets |
1.15
% |
1.17
% |
1.18
% |
1.35
% |
2.09
% | |||||
|
Ratio
of net investment income to average net assets |
1.87
% |
1.04
% |
1.13
% |
0.74
% |
1.62
% | |||||
|
Portfolio
turnover rate(d) |
41
% |
56
% |
58
% |
121
% |
59
% | |||||
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Calculation
of the net gain (loss) per share (both realized and unrealized) does not
correlate to the aggregate realized and unrealized gain (loss) presented
in
the Statement
of Operations due to the timing of subscriptions and redemptions of Fund
shares in relation to fluctuations in the market value of the
portfolio. |
|
(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.
If
such transactions were included, the Fund's portfolio turnover rate may be
higher. |
85
|
|
Goldman
Sachs Energy Infrastructure Fund | |||||||||
|
|
Investor
Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$11.61 |
$9.59 |
$7.19 |
$8.65 |
$9.26 | |||||
|
Net
investment income(a) |
0.18 |
0.10 |
0.09 |
0.04 |
0.14 | |||||
|
Net
realized and unrealized gain (loss) |
0.78 |
2.71 |
2.71 |
(1.16
)(b) |
(0.35
)(b) | |||||
|
Total
from investment operations |
0.96 |
2.81 |
2.80 |
(1.12
) |
(0.21
) | |||||
|
Distributions
to shareholders from net investment income |
(0.46
) |
(0.39
) |
(0.40
) |
(0.05
) |
(0.24
) | |||||
|
Distributions
to shareholders from net realized gains |
(0.30
) |
(0.40
) |
— |
(0.05
) |
— | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.24
) |
(0.16
) | |||||
|
Total
distributions |
(0.76
) |
(0.79
) |
(0.40
) |
(0.34
) |
(0.40
) | |||||
|
Net
asset value, end of year |
$11.81 |
$11.61 |
$9.59 |
$7.19 |
$8.65 | |||||
|
Total
return(c) |
8.96
% |
31.02
% |
38.90
% |
(12.86
)% |
(2.50
)% | |||||
|
Net
assets, end of year (in 000s) |
$84 |
$77 |
$57 |
$41 |
$47 | |||||
|
Ratio
of net expenses to average net assets |
1.22
% |
1.23
% |
1.22
% |
1.23
% |
1.25
% | |||||
|
Ratio
of total expenses to average net assets |
1.27
% |
1.29
% |
1.29
% |
1.49
% |
2.23
% | |||||
|
Ratio
of net investment income to average net assets |
1.65
% |
0.91
% |
0.96
% |
0.61
% |
1.49
% | |||||
|
Portfolio
turnover rate(d) |
41
% |
56
% |
58
% |
121
% |
59
% | |||||
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Calculation
of the net gain (loss) per share (both realized and unrealized) does not
correlate to the aggregate realized and unrealized gain (loss) presented
in
the Statement
of Operations due to the timing of subscriptions and redemptions of Fund
shares in relation to fluctuations in the market value of the
portfolio. |
|
(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.
If
such transactions were included, the Fund's portfolio turnover rate may be
higher. |
86
Appendix
B
|
|
Goldman
Sachs Energy Infrastructure Fund | |||||||||
|
|
Class
R6 Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$11.59 |
$9.58 |
$7.18 |
$8.65 |
$9.26 | |||||
|
Net
investment income(a) |
0.19 |
0.11 |
0.10 |
0.06 |
0.16 | |||||
|
Net
realized and unrealized gain (loss) |
0.78 |
2.70 |
2.71 |
(1.18
)(b) |
(0.36
)(b) | |||||
|
Total
from investment operations |
0.97 |
2.81 |
2.81 |
(1.12
) |
(0.20
) | |||||
|
Distributions
to shareholders from net investment income |
(0.47
) |
(0.40
) |
(0.41
) |
(0.05
) |
(0.25
) | |||||
|
Distributions
to shareholders from net realized gains |
(0.30
) |
(0.40
) |
— |
(0.05
) |
— | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.25
) |
(0.16
) | |||||
|
Total
distributions |
(0.77
) |
(0.80
) |
(0.41
) |
(0.35
) |
(0.41
) | |||||
|
Net
asset value, end of year |
$11.79 |
$11.59 |
$9.58 |
$7.18 |
$8.65 | |||||
|
Total
return(c) |
9.08
% |
31.11
% |
39.13
% |
(12.83
)% |
(2.35
)% | |||||
|
Net
assets, end of year (in 000s) |
$32,956 |
$86,997 |
$81,455 |
$78,375 |
$47 | |||||
|
Ratio
of net expenses to average net assets |
1.09
% |
1.09
% |
1.09
% |
1.09
% |
1.10
% | |||||
|
Ratio
of total expenses to average net assets |
1.15
% |
1.15
% |
1.17
% |
1.30
% |
2.08
% | |||||
|
Ratio
of net investment income to average net assets |
1.76
% |
1.00
% |
1.10
% |
0.92
% |
1.64
% | |||||
|
Portfolio
turnover rate(d) |
41
% |
56
% |
58
% |
121
% |
59
% | |||||
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Calculation
of the net gain (loss) per share (both realized and unrealized) does not
correlate to the aggregate realized and unrealized gain (loss) presented
in
the Statement
of Operations due to the timing of subscriptions and redemptions of Fund
shares in relation to fluctuations in the market value of the
portfolio. |
|
(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.
If
such transactions were included, the Fund's portfolio turnover rate may be
higher. |
87
|
|
Goldman
Sachs Energy Infrastructure Fund | |||||||||
|
|
Class
R Shares | |||||||||
|
|
Year
Ended November 30, | |||||||||
|
|
2023 |
2022 |
2021 |
2020 |
2019 | |||||
|
Per
Share Data |
|
|
|
|
| |||||
|
Net
asset value, beginning of year |
$11.62 |
$9.60 |
$7.19 |
$8.65 |
$9.26 | |||||
|
Net
investment income(a) |
0.13 |
0.04 |
0.04 |
0.01 |
0.09 | |||||
|
Net
realized and unrealized gain (loss) |
0.76 |
2.71 |
2.72 |
(1.17
)(b) |
(0.35
)(b) | |||||
|
Total
from investment operations |
0.89 |
2.75 |
2.76 |
(1.16
) |
(0.26
) | |||||
|
Distributions
to shareholders from net investment income |
(0.42
) |
(0.33
) |
(0.35
) |
(0.04
) |
(0.21
) | |||||
|
Distributions
to shareholders from net realized gains |
(0.30
) |
(0.40
) |
— |
(0.05
) |
— | |||||
|
Distributions
to shareholders from return of capital |
— |
— |
— |
(0.21
) |
(0.14
) | |||||
|
Total
distributions |
(0.72
) |
(0.73
) |
(0.35
) |
(0.30
) |
(0.35
) | |||||
|
Net
asset value, end of year |
$11.79 |
$11.62 |
$9.60 |
$7.19 |
$8.65 | |||||
|
Total
return(c) |
8.39
% |
30.37
% |
38.33
% |
(13.34
)% |
(2.98
)% | |||||
|
Net
assets, end of year (in 000s) |
$126 |
$72 |
$56 |
$40 |
$49 | |||||
|
Ratio
of net expenses to average net assets |
1.72
% |
1.72
% |
1.72
% |
1.73
% |
1.75
% | |||||
|
Ratio
of total expenses to average net assets |
1.77
% |
1.79
% |
1.79
% |
1.99
% |
2.73
% | |||||
|
Ratio
of net investment income to average net assets |
1.15
% |
0.40
% |
0.47
% |
0.10
% |
0.99
% | |||||
|
Portfolio
turnover rate(d) |
41
% |
56
% |
58
% |
121
% |
59
% | |||||
|
(a) |
Calculated
based on the average shares outstanding methodology.
|
|
(b) |
Calculation
of the net gain (loss) per share (both realized and unrealized) does not
correlate to the aggregate realized and unrealized gain (loss) presented
in
the Statement
of Operations due to the timing of subscriptions and redemptions of Fund
shares in relation to fluctuations in the market value of the
portfolio. |
|
(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.
If
such transactions were included, the Fund's portfolio turnover rate may be
higher. |
88
Appendix
C
Additional
Information About Sales Charge Variations, Waivers and
Discounts
The
availability of certain sales charge variations, waivers and discounts will
depend on whether you purchase your shares directly from a Fund or through an
Intermediary. Intermediaries may impose different sales charges and have unique
policies and procedures regarding the availability of sales charge waivers
and/or discounts (including based on account type), which differ from those
described in the Prospectus and are disclosed below. All sales charges and sales
charge variations, waivers and discounts available to investors, other than
those set forth below, are described in the Prospectus. To the extent an
Intermediary notifies the Investment Adviser or Distributor of its intention to
impose sales charges or have sales charge waivers and/or discounts that differ
from those described in the Prospectus, such information provided by that
Intermediary will be disclosed in this Appendix.
In
all instances, it is your responsibility to notify your Intermediary at the time
of purchase of any relationship or other facts qualifying you for sales charge
waivers or discounts. Please contact your Intermediary with questions regarding
your eligibility for applicable sales charge variations, waivers and discounts
or for additional information regarding your Intermediary’s policies for
implementing particular sales charge variations, waivers and discounts. For
waivers and discounts not available through a particular Intermediary,
shareholders will have to purchase shares directly from a Fund or through
another Intermediary to receive these waivers or discounts.
In addition
to different sales charge variations, waivers and discounts, Intermediaries may
have different share class exchange privileges that vary from those described in
the Prospectus. You should contact your Intermediary to understand the exchange
privileges available to you.
The
information provided below for a particular Intermediary is reproduced based on
information provided by that Intermediary. An Intermediary’s administration and
implementation of its particular policies with respect to any variations,
waivers and/or discounts is neither supervised nor verified by the Funds, the
Investment Adviser or the Distributor.
|
MERRILL
LYNCH |
Purchases or sales of
front-end (i.e. Class A) or level-load (i.e., Class C) mutual fund shares
through a Merrill platform or account will be eligible only for the following
sales load waivers (front-end,
contingent
deferred, or back-end
waivers) and
discounts, which differ from those disclosed elsewhere in this Fund’s
prospectus.
Purchasers
will
have
to buy mutual
fund shares directly from the mutual fund company or through another
intermediary to be eligible for waivers or discounts not
listed
below.
It is the client’s
responsibility to notify Merrill at the time of purchase or sale of any
relationship or other facts that qualify the transaction for a waiver or
discount. A Merrill representative may ask for reasonable documentation of such
facts and Merrill may condition the granting of a waiver or discount on the
timely receipt of such documentation.
Additional
information on
waivers and discounts is available in the Merrill Sales Load Waiver and
Discounts Supplement (the “Merrill SLWD Supplement") and in the Mutual
Fund
Investing at
Merrill pamphlet
at
ml.com/funds (the referenced Merrill documents and website do not form a part of
this prospectus). Clients are encouraged to review these documents and speak
with their financial advisor to determine whether a transaction is eligible for
a waiver or discount.
Front-end Load
Waivers Available at Merrill
◼
Shares
of mutual
funds available for purchase by employer-sponsored retirement, deferred
compensation, and employee benefit plans (including health savings accounts) and
trusts used to fund those plans provided the shares are not held in a
commission-based brokerage account and shares are held for the benefit of the
plan.
For purposes
of this provision, employer-sponsored retirement plans do not include SEP IRAs,
Simple IRAs, SAR-SEPs or Keogh plans
◼
Shares purchased through a
Merrill investment advisory program
◼
Brokerage
class shares
exchanged from advisory class shares due to the holdings moving from a Merrill
investment advisory program to a Merrill brokerage account
◼
Shares purchased through
the Merrill Edge Self-Directed platform
◼
Shares purchased through
the systematic reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same mutual
fund in the
same account
◼
Shares exchanged from
level-load
shares to
front-end load shares of the same mutual fund in accordance with the description
in the Merrill SLWD Supplement
◼
Shares purchased by
eligible employees of Merrill or its affiliates and their family members who
purchase shares in accounts within the employee’s Merrill Household (as defined
in the Merrill SLWD Supplement)
◼
Shares
purchased by
eligible persons associated with the fund
as defined in
this prospectus
(e.g. the
fund’s officers or trustees)
89
◼
Shares
purchased from
the proceeds of a mutual fund redemption
in front-end
load shares provided (1) the repurchase is in a mutual fund within the
same
fund family;
(2) the repurchase occurs within 90 calendar days from the redemption trade
date, and (3) the redemption and purchase occur in the same account (known as
Rights of Reinstatement). Automated transactions (i.e. systematic purchases and
withdrawals) and purchases made after shares are automatically sold to pay
Merrill’s account maintenance fees are not eligible for Rights
of
Reinstatement
Contingent
Deferred
Sales Charge (“CDSC”) Waivers on Front-end,
Back-end, and
Level
Load
Shares Available at Merrill
◼
Shares
sold due to
the client’s death or disability (as defined by
Internal
Revenue Code Section 22e(3))
◼
Shares sold pursuant to a
systematic withdrawal program subject to Merrill’s maximum systematic withdrawal
limits as described in the Merrill SLWD
Supplement
◼
Shares
sold due to
return of excess contributions from an IRA account
◼
Shares sold as part of a
required minimum distribution for IRA and retirement accounts due to the
investor reaching the
qualified age
based on applicable IRS regulation
◼
Front-end
or level-load
shares held in commission-based, non-taxable retirement brokerage accounts (e.g.
traditional, Roth, rollover, SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans)
that are transferred to fee-based accounts or platforms and exchanged for a
lower cost share class of the same mutual fund
Front-end Load
Discounts Available at Merrill: Breakpoints, Rights of Accumulation &
Letters of Intent
◼
Breakpoint
discounts, as
described in this prospectus,
where the
sales load is at or below the maximum sales load that Merrill permits to be
assessed to a front-end load purchase, as described in the Merrill SLWD
Supplement
◼
Rights of Accumulation
(ROA),
as described
in the Merrill SLWD Supplement,
which entitle
clients to breakpoint discounts based on the aggregated holdings of mutual fund
family assets held in accounts in their Merrill Household
◼
Letters of Intent (LOI),
which allow for breakpoint discounts on eligible new purchases based on
anticipated future eligible purchases within a fund family
at Merrill, in
accounts within your Merrill Household,
as
further
described in
the Merrill SLWD Supplement
|
AMERIPRISE
FINANCIAL |
The
following information applies to Class A shares purchases if you have an account
with or otherwise purchase Fund shares through Ameriprise Financial:
Shareholders
purchasing Fund shares through an Ameriprise Financial retail brokerage account
are eligible for the following front-end sales charge waivers, which may differ
from those disclosed elsewhere in this Fund’s prospectus or SAI:
◼
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employersponsored 403(b) plans,
profit sharing and money purchase pension plans and defined benefit plans). For
purposes of this provision, employer-sponsored retirement plans do not include
SEP IRAs, Simple IRAs or SAR-SEPs.
◼
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same Fund (but not any other fund
within the same fund family).
◼
Shares
exchanged from Class C shares of the same fund in the month of or following the
7-year anniversary of the purchase date. To the extent that this prospectus
elsewhere provides for a waiver with respect to exchanges of Class C shares or
conversion of Class C shares following a shorter holding period, that waiver
will apply.
◼
Employees
and registered representatives of Ameriprise Financial or its affiliates and
their immediate family members.
◼
Shares
purchased by or through qualified accounts (including IRAs, Coverdell Education
Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit
plans) that are held by a covered family member, defined as an Ameriprise
financial advisor and/or the advisor’s spouse, advisor’s lineal ascendant
(mother, father, grandmother, grandfather, great grandmother, great
grandfather), advisor’s lineal descendant (son, step-son, daughter,
step-daughter, grandson, granddaughter, great grandson, great granddaughter) or
any spouse of a covered family member who is a lineal descendant.
◼
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (i.e. Rights of
Reinstatement).
90
Appendix
C
|
MORGAN
STANLEY WEALTH MANAGEMENT |
Effective
July 1, 2018, shareholders purchasing Fund shares through a Morgan Stanley
Wealth Management transactional brokerage account will be eligible only for the
following front-end sales charge waivers with respect to Class A shares, which
may differ from and may be more limited than those disclosed elsewhere in this
Fund’s Prospectus or SAI.
Front-End Sales
Charge Waivers on Class A Shares Available at Morgan Stanley Wealth
Management
◼
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans
◼
Morgan
Stanley employee and employee-related accounts according to Morgan Stanley’s
account linking rules
◼
Shares
purchased through reinvestment of dividends and capital gains distributions when
purchasing shares of the same fund
◼
Shares
purchased through a Morgan Stanley self-directed brokerage account
◼
Class C
(i.e., level-load) shares that are no longer subject to a contingent deferred
sales charge and are converted to Class A shares of the same fund pursuant to
Morgan Stanley Wealth Management’s share class conversion program
◼
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(i) the repurchase occurs within 90 days following the redemption, (ii) the
redemption and purchase occur in the same account, and (iii) redeemed shares
were subject to a front-end or deferred sales charge.
|
RAYMOND
JAMES & ASSOCIATES, INC., RAYMOND JAMES FINANCIAL SERVICES, INC. AND
EACH ENTITY’S AFFILIATES
(“RAYMOND
JAMES”) |
Effective
March 1, 2019, shareholders purchasing Fund shares through a Raymond James
platform or account, or through an introducing broker-dealer or independent
registered investment adviser for which Raymond James provides trade execution,
clearance, and/or custody services, will be eligible only for the following load
waivers (front-end sales charge waivers and contingent deferred, or back-end,
sales charge waivers) and discounts, which may differ from those disclosed
elsewhere in this Fund’s Prospectus or SAI.
Front-End Sales Load
Waivers on Class A Shares Available at Raymond James
◼
Shares
purchased in an investment advisory program.
◼
Shares
purchased within the same fund family through a systematic reinvestment of
capital gains and dividend distributions.
◼
Employees
and registered representatives of Raymond James or its affiliates and their
family members as designated by Raymond James.
◼
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (known as Rights of
Reinstatement).
◼
A
Shareholder in the Fund’s Class C shares will have their shares converted at net
asset value to Class A shares (or the appropriate share class) of the Fund if
the shares are no longer subject to a CDSC and the conversion is in line with
the policies and procedures of Raymond James.
CDSC Waivers on Class
A and Class C Shares Available at Raymond James
◼
Death or
disability of the shareholder.
◼
Shares sold
as part of a systematic withdrawal plan as described in the Fund’s
Prospectus.
◼
Return of
excess contributions from an IRA Account.
◼
Shares sold
as part of a required minimum distribution for IRA and retirement accounts due
to the shareholder reaching the qualified age based on applicable IRS
regulations as described in the Fund’s Prospectus.
◼
Shares sold
to pay Raymond James fees but only if the transaction is initiated by Raymond
James.
◼
Shares
acquired through a Right of Reinstatement.
Front-End Load
Discounts Available at Raymond James: Breakpoints, Rights of Accumulation,
and/or Letters of Intent
◼
Breakpoints
as described in this Prospectus.
◼
Rights of
accumulation which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family assets
held by accounts within the purchaser’s household at Raymond James. Eligible
fund family assets not held at Raymond James may be included in the calculation
of rights of accumulation only if the shareholder notifies his or her financial
advisor about such assets.
◼
Letters of
intent which allow for breakpoint discounts based on anticipated purchases
within a fund family, over a 13-month time period. Eligible fund family assets
not held at Raymond James may be included in the calculation of letters of
intent only if the shareholder notifies his or her financial advisor about such
assets.
91
|
JANNEY
MONTGOMERY SCOTT LLC |
Effective
May 1, 2020, if you purchase Fund shares through a Janney Montgomery Scott LLC
(“Janney”) brokerage account, you will be eligible for the following load
waivers (front-end sales charge waivers and contingent deferred sales charge
(“CDSC”), or back-end sales charge, waivers) and discounts, which may differ
from those disclosed elsewhere in the Fund’s Prospectus or SAI.
Front-End Sales
Charge* Waivers on Class A Shares Available at Janney
◼
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other fund
within the fund family).
◼
Shares
purchased by employees and registered representatives of Janney or its
affiliates and their family members as designated by Janney.
◼
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within ninety (90) days following the redemption, (2)
the redemption and purchase occur in the same account, and (3) redeemed shares
were subject to a front-end or deferred sales load (i.e., right of
reinstatement).
◼
Employer-sponsored
retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit sharing and money purchase pension plans and defined benefit
plans). For purposes of this provision, employer-sponsored retirement plans do
not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
◼
Shares
acquired through a right of reinstatement.
◼
Class C
Shares that are no longer subject to a contingent deferred sales charge and are
converted to Class A Shares of the same fund pursuant to Janney’s policies and
procedures.
CDSC Waivers on Class
A and C Shares Available at Janney
◼
Shares sold
upon the death or disability of the shareholder.
◼
Shares sold
as part of a systematic withdrawal plan as described in the Fund’s
Prospectus.
◼
Shares
purchased in connection with a return of excess contributions from an IRA
account.
◼
Shares sold
as part of a required minimum distribution for IRA and other retirement accounts
due to the shareholder reaching age 70½ as described in the Fund’s
Prospectus.
◼
Shares sold
to pay Janney fees but only if the transaction is initiated by
Janney.
◼
Shares
acquired through a right of reinstatement.
◼
Shares
exchanged into the same share class of a different fund.
Front-End Sales
Charge* Discounts Available at Janney: Breakpoints, Rights of Accumulation,
and/or Letters of Intent
◼
Breakpoints
as described in the Fund’s Prospectus.
◼
Rights of
accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will
be automatically calculated based on the aggregated holding of fund family
assets held by accounts within the purchaser’s household at Janney. Eligible
fund family assets not held at Janney may be included in the ROA calculation
only if the shareholder notifies his or her financial advisor about such
assets.
◼
Letters of
intent which allow for breakpoint discounts based on anticipated purchases
within a fund family, over a 13-month time period. Eligible fund family assets
not held at Janney may be included in the calculation of letters of intent only
if the shareholder notifies his or her financial advisor about such
assets.
*
Also
referred to as an “initial sales charge.”
|
EDWARD
D. JONES & CO., L.P. (“Edward
Jones”) |
Policies Regarding
Transactions Through Edward Jones
The
following information has been provided by Edward Jones:
Effective on or after
January 1, 2024, the following information supersedes prior information with
respect to transactions and positions held in fund shares through an Edward
Jones system. Clients of Edward Jones (also referred to as “shareholders”)
purchasing fund shares on the Edward Jones commission and fee-based platforms
are eligible only for the following sales charge discounts (also referred to as
“breakpoints”) and waivers, which can differ from discounts and waivers
described elsewhere in the mutual fund prospectus or statement of additional
information (“SAI”) or through another broker-dealer. In all instances, it is
the shareholder’s responsibility to inform Edward Jones at the time of purchase
of any relationship, holdings of Goldman Sachs Funds, or other facts qualifying
the purchaser for discounts or waivers. Edward Jones can ask for documentation
of such circumstance. Shareholders should contact Edward Jones if they have
questions regarding their eligibility for these discounts and
waivers.
92
Appendix
C
Breakpoints
◼
Breakpoint
pricing, otherwise known as volume pricing, at dollar thresholds as described in
the prospectus.
Rights of
Accumulation (“ROA”)
◼
The
applicable sales charge on a purchase of Class A Shares is determined by taking
into account all share classes (except certain money market funds and any assets
held in group retirement plans) of Goldman Sachs Funds held by the shareholder
or in an account grouped by Edward Jones with other accounts for the purpose of
providing certain pricing considerations (“pricing groups”). If grouping assets
as a shareholder, this includes all share classes held on the Edward Jones
platform and/or held on another platform. The inclusion of eligible fund family
assets in the ROA calculation is dependent on the shareholder notifying Edward
Jones of such assets at the time of calculation. Money market funds are included
only if such shares were sold with a sales charge at the time of purchase or
acquired in exchange for shares purchased with a sales charge.
◼
The
employer maintaining a SEP IRA plan and/or SIMPLE IRA plan may elect to
establish or change ROA for the IRA accounts associated with the plan to a
plan-level grouping as opposed to including all share classes at a shareholder
or pricing group level.
◼
ROA is
determined by calculating the higher of cost minus redemptions or market value
(current shares x NAV).
Letter of Intent
(“LOI”)
◼
Through a
LOI, shareholders can receive the sales charge and breakpoint discounts for
purchases shareholders intend to make over a 13-month period from the date
Edward Jones receives the LOI. The LOI is determined by calculating the higher
of cost or market value of qualifying holdings at LOI initiation in combination
with the value that the shareholder intends to buy over a 13-month period to
calculate the front-end sales charge and any breakpoint discounts. Each purchase
the shareholder makes during that 13-month period will receive the sales charge
and breakpoint discount that applies to the total amount. The inclusion of
eligible fund family assets in the LOI calculation is dependent on the
shareholder notifying Edward Jones of such assets at the time of calculation.
Purchases made before the LOI is received by Edward Jones are not adjusted under
the LOI and will not reduce the sales charge previously paid. Sales charges will
be adjusted if LOI is not met.
◼
If the
employer maintaining a SEP IRA plan and/or SIMPLE IRA plan has elected to
establish or change ROA for the IRA accounts associated with the plan to a
plan-level grouping, LOIs will also be at the plan-level and may only be
established by the employer.
Sales Charge
Waivers
Sales
charges are waived for the following shareholders and in the following
situations:
◼
Associates of Edward Jones
and its affiliates and other accounts in the same pricing group (as determined
by Edward Jones under its policies and procedures) as the associate. This waiver
will continue for the remainder of the associate’s life if the associate retires
from Edward Jones in good-standing and remains in good standing pursuant to
Edward Jones’ policies and procedures.
◼
Shares
purchased in an Edward Jones fee-based program.
◼
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment.
◼
Shares purchased from the
proceeds of redeemed shares of the same fund family so long as the following
conditions are met: the proceeds are from the sale of shares within 60 days of
the purchase, the sale and purchase are made from a share class that charges a
front
load
and
one
of
the
following:
◼
The redemption and
repurchase occur in the same account.
◼
The redemption proceeds are
used to process an: IRA contribution, excess contributions, conversion,
recharacterizing of contributions, or distribution, and the repurchase is done
in an account within the same Edward Jones grouping for ROA.
◼
Shares
exchanged into Class A Shares from another share class so long as the exchange
is into the same fund and was initiated at the discretion of Edward Jones.
Edward Jones is responsible for any remaining CDSC due to the fund company, if
applicable. Any future purchases are subject to the applicable sales charge as
disclosed in the prospectus.
◼
Exchanges
from Class C Shares to Class A Shares of the same fund, generally, in the 84th
month following the anniversary of the purchase date or earlier at the
discretion of Edward Jones.
Contingent Deferred
Sales Charge (“CDSC”) Waivers
If the
shareholder purchases shares that are subject to a CDSC and those shares are
redeemed before the CDSC is expired, the shareholder is responsible to pay the
CDSC except in the following conditions:
◼
The death or disability of
the shareholder.
◼
Systematic withdrawals with
up to 10% per year of the account value.
◼
Return of excess
contributions from an Individual Retirement Account (IRA).
◼
Shares redeemed as part of
a required minimum distribution for IRA and retirement accounts if the
redemption is taken in or after the year the shareholder reaches qualified age
based on applicable IRS regulations.
◼
Shares redeemed to pay
Edward Jones fees or costs in such cases where the transaction is initiated by
Edward Jones.
◼
Shares exchanged in an
Edward Jones fee-based program.
93
◼
Shares acquired through NAV
reinstatement.
◼
Shares
redeemed at the discretion of Edward Jones for Minimum Balances, as described
below.
Other Important
Information Regarding Transactions Through Edward Jones
Minimum Purchase
Amounts
◼
Initial
purchase minimum: $250
◼
Subsequent
purchase minimum: none
Minimum
Balances
◼
Edward
Jones has the right to redeem at its discretion fund holdings with a balance of
$250 or less. The following are examples of accounts that are not included in
this policy:
◼
A fee-based
account held on an Edward Jones platform
◼
A 529
account held on an Edward Jones platform
◼
An account with an active
systematic investment plan or LOI
Exchanging Share
Classes
◼
At any time it deems
necessary, Edward Jones has the authority to exchange at NAV a shareholder’s
holdings in a fund to Class A shares of the same fund.
|
OPPENHEIMER
& CO. INC. |
Effective
May 1, 2020, shareholders purchasing Fund shares through an Oppenheimer &
Co. Inc. (“OPCO”) platform or account are eligible only for the following load
waivers (front-end sales charge waivers and contingent deferred, or back-end,
sales charge waivers) and discounts, which may differ from those disclosed
elsewhere in this Fund’s prospectus or SAI.
Front-end Sales Load
Waivers on Class A Shares available at OPCO
◼
Employer-sponsored
retirement, deferred compensation and employee benefit plans (including health
savings accounts) and trusts used to fund those plans, provided that the shares
are not held in a commission-based brokerage account and shares are held for the
benefit of the plan
◼
Shares
purchased by or through a 529 Plan
◼
Shares
purchased through a OPCO affiliated investment advisory program
◼
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing shares of the same fund (but not any other fund
within the fund family)
◼
Shares
purchased from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same account, and (3) redeemed shares were
subject to a front-end or deferred sales load (known as Rights of
Restatement).
◼
A
shareholder in the Fund’s Class C shares will have their shares converted at net
asset value to Class A shares (or the appropriate share class) of the Fund if
the shares are no longer subject to a CDSC and the conversion is in line with
the policies and procedures of OPCO
◼
Employees
and registered representatives of OPCO or its affiliates and their family
members
◼
Directors
or Trustees of the Fund, and employees of the Fund’s investment adviser or any
of its affiliates, as described in this prospectus
CDSC Waivers on Class
A and C Shares available at OPCO
◼
Death or
disability of the shareholder
◼
Shares sold
as part of a systematic withdrawal plan as described in the Fund’s
prospectus
◼
Return of
excess contributions from an IRA Account
◼
Shares sold
as part of a required minimum distribution for IRA and retirement accounts due
to the shareholder reaching the qualified age based on applicable IRS
regulations as described in the prospectus
◼
Shares sold
to pay OPCO fees but only if the transaction is initiated by OPCO
◼
Shares
acquired through a right of reinstatement
Front-end load
Discounts Available at OPCO: Breakpoints, Rights of Accumulation & Letters
of Intent
◼
Breakpoints
as described in this prospectus.
94
Appendix
C
◼
Rights of
Accumulation (ROA) which entitle shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family assets
held by accounts within the purchaser’s household at OPCO. Eligible fund family
assets not held at OPCO may be included in the ROA calculation only if the
shareholder notifies his or her financial advisor about such assets.
|
ROBERT
W. BAIRD & CO. (“BAIRD”) |
Effective
June 15, 2020, shareholders purchasing Fund shares through a Baird platform or
account will only be eligible for the following sales charge waivers (front-end
sales charge waivers and CDSC waivers) and discounts, which may differ from
those disclosed elsewhere in this prospectus or the SAI
Front-End Sales
Charge Waivers on Class A Shares Available at Baird
◼
Shares
purchased through reinvestment of capital gains distributions and dividend
reinvestment when purchasing share of the same fund
◼
Share
purchase by employees and registers representatives of Baird or its affiliate
and their family members as designated by Baird
◼
Shares
purchase from the proceeds of redemptions within the same fund family, provided
(1) the repurchase occurs within 90 days following the redemption, (2) the
redemption and purchase occur in the same accounts, and (3) redeemed shares were
subject to a front-end or deferred sales charge (known as rights of
reinstatement)
◼
A
shareholder in the Funds Class C shares will have their shares converted at net
asset value to Class A shares of the fund if the shares are no longer subject to
CDSC and the conversion is in line with the policies and procedures of
Baird
◼
Employer-sponsored
retirement plans or charitable accounts in a transactional brokerage account at
Baird, including 401(k) plans, 457 plans, employer-sponsored 403(b) plans,
profit sharing and money purchase pension plans and defined benefit plans. For
purposes of this provision, employer-sponsored retirement plans do not include
SEP IRAs, Simple IRAs or SAR-SEPs
CDSC Waivers on Class
A and C Shares Available at Baird
◼
Shares sold
due to death or disability of the shareholder
◼
Shares sold
as part of a systematic withdrawal plan as described in the Fund’s
Prospectus
◼
Shares
bought due to returns of excess contributions from an IRA Account
◼
Shares sold
as part of a required minimum distribution for IRA and retirement accounts due
to the shareholder reaching age 72 as described in the Fund’s
prospectus
◼
Shares sold
to pay Baird fees but only if the transaction is initiated by Baird
◼
Shares
acquired through a right of reinstatement
Front-End Sales
Charge Discounts Available at Baird: Breakpoints and/or Rights of
Accumulations
◼
Breakpoints
as described in this prospectus
◼
Rights of
accumulations which entitles shareholders to breakpoint discounts will be
automatically calculated based on the aggregated holding of fund family assets
held by accounts within the purchaser’s household at Baird. Eligible fund family
assets not held at Baird may be included in the rights of accumulations
calculation only if the shareholder notifies his or her financial advisor about
such assets
◼
Letters of
Intent (LOI) allow for breakpoint discounts based on anticipated purchases
within a fund family through Baird, over a 13-month period of time
|
J.P.
Morgan Securities LLC |
Effective
September 29, 2023, if you purchase or hold fund shares through an
applicable J.P. Morgan Securities LLC brokerage account, you will be eligible
for the following sales charge waivers (front-end sales charge waivers
and contingent deferred sales charge (“CDSC”), or back-end sales
charge, waivers), share class conversion policy and discounts, which may differ
from those disclosed elsewhere in this fund’s prospectus or Statement of
Additional Information.
Front-end sales
charge waivers on Class A shares available at J.P. Morgan Securities
LLC
◼
Shares exchanged from
Class C (i.e. level-load) shares that are no longer subject to a CDSC and
are exchanged into Class A shares of the same fund pursuant to J.P. Morgan
Securities LLC’s share class exchange policy.
◼
Qualified
employer-sponsored defined contribution and defined benefit retirement plans,
nonqualified deferred compensation plans, other employee benefit plans and
trusts used to fund those plans. For purposes of this provision, such plans do
not include SEP IRAs, SIMPLE IRAs, SAR-SEPs or 501(c)(3)
accounts.
◼
Shares of funds purchased
through J.P. Morgan Securities LLC Self-Directed Investing accounts.
◼
Shares purchased through
rights of reinstatement.
95
◼
Shares purchased through
reinvestment of capital gains distributions and dividend reinvestment when
purchasing shares of the same fund (but not any other fund within the fund
family).
◼
Shares purchased by
employees and registered representatives of J.P. Morgan Securities LLC or its
affiliates and their spouse or financial dependent as defined by J.P. Morgan
Securities LLC.
Class C to
Class A share conversion
◼
A shareholder in the fund’s
Class C shares will have their shares converted to Class A shares (or
the appropriate share class) of the same fund if the shares are no longer
subject to a CDSC and the conversion is consistent with J.P. Morgan Securities
LLC’s policies and procedures.
CDSC waivers on
Class A and C shares available at J.P. Morgan Securities LLC
◼
Shares sold upon the death
or disability of the shareholder.
◼
Shares sold as part of a
systematic withdrawal plan as described in the fund’s prospectus.
◼
Shares purchased in
connection with a return of excess contributions from an IRA
account.
◼
Shares sold as part of a
required minimum distribution for IRA and retirement accounts pursuant to the
Internal Revenue Code.
◼
Shares acquired through a
right of reinstatement.
Front-end load
discounts available at J.P. Morgan Securities LLC: breakpoints, rights of
accumulation & letters of intent
◼
Breakpoints as described in
the prospectus.
◼
Rights of Accumulation
(“ROA”) which entitle shareholders to breakpoint discounts as described in the
fund’s prospectus will be automatically calculated based on the aggregated
holding of fund family assets held by accounts within the purchaser’s household
at J.P. Morgan Securities LLC. Eligible fund family assets not held at J.P.
Morgan Securities LLC (including 529 program holdings, where applicable) may be
included in the ROA calculation only if the shareholder notifies their financial
advisor about such assets.
◼
Letters of Intent (“LOI”)
which allow for breakpoint discounts based on anticipated purchases within a
fund family, through J.P. Morgan Securities LLC, over
a 13-month period of time (if applicable).
96
Energy
Infrastructure Funds Prospectus
|
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 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.gsamfunds.com/mutualfunds.
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:
|
|
Institutional
& Class R6 |
Class
A, C, Investor & R |
|
◼ By
telephone: |
1-800-621-2550 |
1-800-526-7384 |
|
◼ By
mail: |
Goldman
Sachs Funds
71
South Wacker Drive, Suite 1200
Chicago,
IL 60606 |
Goldman
Sachs Funds
P.O.
Box 219711
Kansas
City, MO 64121 |
|
◼ 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
Funds’ investment company registration number is 811-05349.
GSAM®
is a registered service mark of Goldman Sachs & Co. LLC.
MLPEIPRO-24