Prospectus
July
29, 2024
GOLDMAN
SACHS MUNICIPAL FIXED INCOME FUNDS
THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED
UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
|
AN
INVESTMENT IN A FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED BY THE
FEDERAL DEPOSIT
INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A FUND
INVOLVES
INVESTMENT
RISKS, AND YOU MAY LOSE MONEY IN A
FUND. |
◼
Goldman Sachs
Dynamic Municipal Income Fund
◼
Class A
Shares: GSMIX
◼
Class C
Shares: GSMUX
◼
Institutional
Shares: GSMTX
◼
Service
Shares: GSMEX
◼
Investor
Shares: GUIRX
◼
Class R6
Shares: GYISX
◼
Goldman Sachs
High Yield Municipal Fund
◼
Class A
Shares: GHYAX
◼
Class C
Shares: GHYCX
◼
Institutional
Shares: GHYIX
◼
Investor
Shares: GYIRX
◼
Class R6
Shares: GHYSX
◼
Goldman Sachs
Short Duration Tax-Free Fund
◼
Class A
Shares: GSDTX
◼
Class C
Shares: GSTCX
◼
Institutional
Shares: GSDUX
◼
Service
Shares: GSFSX
◼
Investor
Shares: GDIRX
◼
Class R6
Shares: GDUSX
|
|
|
|
|
|
Class
A |
Class
C |
Institutional |
Service |
Investor |
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 |
Service |
Investor |
Class
R6 |
|
Management
Fees |
|
|
|
|
|
|
|
Distribution
and/or Service (12b-1) Fees |
|
|
|
|
|
|
|
Other
Expenses |
|
|
|
|
|
|
|
Service
Fees |
|
|
|
|
|
|
|
Shareholder
Administration Fees |
|
|
|
|
|
|
|
All
Other Expenses |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
|
|
|
|
|
Expense
Limitation2 |
( |
( |
( |
( |
( |
( |
|
Total
Annual Fund Operating Expenses After Expense
Limitation |
|
|
|
|
|
|
1
2
|
|
1
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
A Shares |
$ |
$ |
$ |
$ |
|
Class
C Shares |
$ |
$ |
$ |
$ |
|
Institutional
Shares |
$ |
$ |
$ |
$ |
|
Service
Shares |
$ |
$ |
$ |
$ |
|
Investor
Shares |
$ |
$ |
$ |
$ |
|
Class
R6 Shares |
$ |
$ |
$ |
$ |
|
|
$ |
$ |
$ |
$ |
|
|
|
|
2
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
1
Year |
5
Years |
10
Years |
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 |
|
|
|
|
|
Service
Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Investor
Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Class
R6 Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Bloomberg
Municipal Bond 1-10 Year Blend Index (reflects no deduction for fees,
expenses or taxes) |
|
|
|
|
|
Bloomberg
U.S. Aggregate Bond Index (reflects no deduction for fees or
expenses) |
|
|
|
|
*
**
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Scott
Diamond, Managing Director, has managed the Fund since 2002; Joseph Wenzel, Vice
President, has managed the Fund since 2019; and Sylvia Yeh, Managing Director,
has managed the Fund since 2021.
|
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 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 or Class R6
shareholders.
The Fund
does not impose minimum purchase requirements for initial or subsequent
investments in Service Shares, although an Intermediary (as defined below) may
impose such minimums and/or establish other requirements such as a minimum
account balance
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 |
For
important tax information, please see “Tax Information” on page 18 of the
Prospectus.
5
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
For
important information about financial intermediary compensation, please see
“Payments to Broker-Dealers and Other Financial Intermediaries” on page 18 of
the Prospectus.
6
|
|
|
|
|
|
Class
A |
Class
C |
Institutional |
Investor |
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
R6 |
|
Management
Fees |
|
|
|
|
|
|
Distribution
and/or Service (12b-1) Fees |
|
|
|
|
|
|
Other
Expenses |
|
|
|
|
|
|
Service
Fees |
|
|
|
|
|
|
All
Other Expenses |
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
|
|
|
|
Fee
Waiver and Expense Limitation2
|
( |
( |
( |
( |
( |
|
Total
Annual Fund Operating Expenses After Fee Waiver and Expense
Limitation |
|
|
|
|
|
1
2
|
|
7
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
A Shares |
$ |
$ |
$ |
$ |
|
Class
C Shares |
$ |
$ |
$ |
$ |
|
Institutional
Shares |
$ |
$ |
$ |
$ |
|
Investor
Shares |
$ |
$ |
$ |
$ |
|
Class
R6 Shares |
$ |
$ |
$ |
$ |
|
|
$ |
$ |
$ |
$ |
|
|
|
|
8
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
|
|
|
|
1
Year |
5
Years |
10
Years |
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
R6 Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Goldman
Sachs High Yield Municipal Fund Composite Index |
|
|
|
|
|
Bloomberg
Municipal Bond Index (reflects no deduction for fees, expenses or
taxes) |
|
|
|
|
|
Bloomberg
Municipal High Yield Bond Index (reflects no deduction for fees, expenses
or taxes) |
|
|
|
|
|
Bloomberg
U.S. Aggregate Bond Index (reflects no deduction for fees or
expenses) |
|
|
|
|
*
**
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Scott
Diamond, Managing Director, has managed the Fund since 2002; Joseph Wenzel, Vice
President, has managed the Fund since 2019; and Sylvia Yeh, Managing Director,
has managed the Fund since 2021.
|
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 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 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, including
banks, trust companies, brokers, registered investment advisers and other
financial institutions (“Intermediaries”).
|
Tax
Information |
For
important tax information, please see “Tax Information” on page 18 of the
Prospectus.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
For
important information about financial intermediary compensation, please see
“Payments to Broker-Dealers and Other Financial Intermediaries” on page 18 of
the Prospectus.
11
|
|
|
|
|
|
Class
A |
Class
C |
Institutional |
Service |
Investor |
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 |
Service |
Investor |
Class
R6 |
|
Management
Fees |
|
|
|
|
|
|
|
Distribution
and/or Service (12b-1) Fees |
|
|
|
|
|
|
|
Other
Expenses |
|
|
|
|
|
|
|
Service
Fees |
|
|
|
|
|
|
|
Shareholder
Administration Fees |
|
|
|
|
|
|
|
All
Other Expenses |
|
|
|
|
|
|
|
Total
Annual Fund Operating Expenses |
|
|
|
|
|
|
|
Fee
Waivers and Expense Limitation2 |
( |
( |
( |
( |
( |
( |
|
Total
Annual Fund Operating Expenses After Fee Waivers and
Expense
Limitation |
|
|
|
|
|
|
1
2
|
|
12
|
|
1
Year |
3
Years |
5
Years |
10
Years |
|
Class
A Shares |
$ |
$ |
$ |
$ |
|
Class
C Shares |
$ |
$ |
$ |
$ |
|
Institutional
Shares |
$ |
$ |
$ |
$ |
|
Service
Shares |
$ |
$ |
$ |
$ |
|
Investor
Shares |
$ |
$ |
$ |
$ |
|
Class
R6 Shares |
$ |
$ |
$ |
$ |
|
|
$ |
$ |
$ |
$ |
|
|
|
|
13
|
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
|
|
|
|
|
|
|
1
Year |
5
Years |
10
Years |
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 |
|
|
|
|
|
Service
Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Investor
Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Class
R6 Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
Bloomberg
Municipal Bond 1-3 Year Blend Index (reflects no deduction for fees,
expenses or taxes) |
|
|
|
|
|
Bloomberg
U.S. Aggregate Bond Index (reflects no deduction for fees or
expenses) |
|
|
|
|
*
**
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Scott
Diamond, Managing Director, has managed the Fund since 2002; Joseph Wenzel, Vice
President, has managed the Fund since 2019; and Sylvia Yeh, Managing Director,
has managed the Fund since 2021.
|
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 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 or Class R6
shareholders.
The Fund
does not impose minimum purchase requirements for initial or subsequent
investments in Service Shares, although an Intermediary (as defined below) may
impose such minimums and/or establish other requirements such as a minimum
account balance.
You may
purchase and redeem (sell) shares of the Fund on any business day through
certain intermediaries that have a relationship with Goldman Sachs, including
banks, trust companies, brokers, registered investment advisers and other
financial institutions (“Intermediaries”).
|
Tax
Information |
For
important tax information, please see “Tax Information” on page 18 of the
Prospectus.
16
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
For
important information about financial intermediary compensation, please see
“Payments to Broker-Dealers and Other Financial Intermediaries” on page 18 of
the Prospectus.
17
Municipal
Fixed Income Funds –
Additional Summary Information
Additional Summary Information
|
Tax
Information |
The Funds’
distributions of interest on municipal obligations generally are not subject to
federal income tax; however the Funds may distribute taxable dividends,
including distributions of short-term capital gains, and long-term capital
gains. In addition, interest on certain obligations may be subject to the
federal alternative minimum tax. To the extent that the Funds’ distributions are
derived from interest on obligations that are not exempt from applicable state
and local taxes, such distributions will be subject to such state and local
taxes.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
If you
purchase a 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.
18
Investment
Management Approach
|
INVESTMENT
OBJECTIVE |
The Dynamic
Municipal Income Fund seeks a high level of current income that is exempt from
regular federal income tax. The High Yield Municipal Fund seeks a high level of
current income that is exempt from regular federal income tax and may also
consider the potential for capital appreciation. The Short Duration Tax-Free
Fund seeks a high level of current income, consistent with relatively low
volatility of principal, that is exempt from regular federal income
tax.
|
PRINCIPAL
INVESTMENT STRATEGIES |
Dynamic Municipal
Income Fund
The Fund
invests, under normal market conditions, at least 80% of its Net Assets in
Municipal Securities, the interest on which is exempt from regular federal
income tax (i.e., excluded from gross income for federal income tax purposes).
The Fund may invest up to 100% of its Net Assets in private activity bonds, the
interest on which (including the Fund’s distributions of such interest) may be a
preference item for purposes of the federal alternative minimum tax. 100% of the
Fund’s portfolio will be invested in U.S. dollar-denominated
securities.
The Fund
may invest up to 30% of its Net Assets in Municipal Securities that, at the time
of purchase, are non-investment grade (commonly referred to as “junk bonds”).
Non-investment grade securities are securities rated BB+, Ba1 or below by a
NRSRO, or, if unrated, determined by the Investment Adviser to be of comparable
credit quality. The Fund may purchase the securities of issuers that are in
default.
The Fund
may also seek to obtain exposure to fixed income investments through investments
in affiliated or unaffiliated investment companies, including ETFs.
The Fund
may focus its investments in issuers within the same state or economic sector.
The team uses a multi-faceted approach when evaluating whether to add or
maintain exposure to any individual position. A top-down approach is used to
assess broad macro trends while a bottom-up analysis is used to determine
relative value between individual securities. Individual securities will be
considered for purchase or sale based on credit profile, risk, structure,
pricing, and portfolio impact, as well as duration management, restructuring,
opportunistic trading and tax loss harvesting.
Under normal interest rate
conditions, the Fund’s duration is expected to range between two and eight
years. (Historically, over the last five years, the duration of the Bloomberg
Municipal Bond 1-10 Year Blend Index has been between approximately 3.67 and
4.02
years).
Although the Fund is not managed towards an average maturity, it is expected
that the average maturity of the Fund’s portfolio will change in relation to the
duration of the Bloomberg Municipal Bond 1-10 Year Blend Index.
The Investment Adviser
measures the Fund’s performance against the Bloomberg Municipal Bond 1-10 Year
Blend Index. The Fund’s broad-based securities market index is the Bloomberg
U.S. Aggregate Bond Index. The Bloomberg Municipal Bond 1-10 Year Blend Index is
an investment grade, national focused municipal bond index with maturities
ranging from 1-12 years. The Bloomberg U.S. Aggregate Bond Index represents an
unmanaged diversified portfolio of investment grade, U.S. dollar-denominated,
fixed income securities, including U.S. Treasuries, government-related and
corporate securities, mortgage-backed securities (agency fixed-rate
pass-throughs), asset-backed securities and commercial mortgage-backed
securities (agency and non-agency).
High Yield Municipal
Fund
The Fund
invests, under normal circumstances, at least 80% of its Net Assets in Municipal
Securities, the interest on which is exempt from regular federal income tax
(i.e., excluded from gross income for federal income tax purposes). The Fund
invests, under normal circumstances, a majority of its Total Assets in
high-yield Municipal Securities. High-yield securities are securities that, at
the time of purchase, are medium quality or non-investment grade. Medium quality
securities are rated BBB or Baa by a NRSRO, and non-investment grade securities
are securities rated BB+, Ba1 or below by an NRSRO. Non-investment grade
securities are commonly known as “junk bonds.” The Fund may also invest in
unrated securities determined by the Investment Adviser to be of comparable
credit quality. The Fund may purchase the securities of issuers that are in
default.
Under
normal circumstances, the Fund may also invest the remainder of its Total Assets
in higher grade fixed income securities. In pursuing its principal investment
strategy, the Investment Adviser will assess the relative value in the Municipal
Securities market from both a credit and yield curve perspective. Individual
securities will be considered for purchase or sale based on credit profile,
risk, structure, pricing, and portfolio impact, as well as duration management,
restructuring, opportunistic trading and tax loss harvesting. Tax-exempt
securities offering the high current income sought by the Fund may be
predominantly in the lower rating categories of NRSROs (BB+/Ba1 or
lower).
19
The Fund
may focus its investments in issuers in the same state or economic
sector.
The Fund
may invest up to 100% of its Net Assets in private activity bonds, the interest
on which (including the Fund’s distributions of such interest) may be a
preference item for purposes of the federal alternative minimum tax. 100% of the
Fund’s portfolio will be invested in U.S. dollar-denominated
securities.
The Fund
may also seek to obtain exposure to fixed income investments through investments
in affiliated or unaffiliated investment companies, including ETFs. In addition,
the Fund may invest in securities of other investment companies (specifically,
registered money market funds) to manage uninvested cash in the
portfolio.
Under normal interest rate
conditions, the Fund’s duration is expected to approximate that of the Goldman
Sachs High Yield Municipal Fund Composite Index (comprised of 40% Bloomberg
Municipal Bond Index and 60% Bloomberg Municipal High Yield Bond Index), plus or
minus two years. (Historically, over the last five years, the duration of the
Goldman Sachs High Yield Municipal Fund Composite Index has ranged between 5.06
and 9.32 years).
The Investment Adviser
measures the Fund’s performances against the Bloomberg Municipal High Yield Bond
Index, the Bloomberg Municipal Bond Index and the Goldman Sachs High Yield
Municipal Fund Composite Index. The Fund’s broad-based securities market index
is the Bloomberg US Aggregate Bond Index. The Bloomberg Municipal High Yield
Bond Index is an unmanaged index made up of bonds that are non-investment grade,
unrated, or rated below Ba1 by Moody’s with a remaining maturity of at least one
year. The Bloomberg Municipal Bond Index is an unmanaged broad-based total
return index composed of approximately 40,000 investment grade, fixed rate and
tax-exempt issues, with a remaining maturity of at least one year. The Goldman
Sachs High Yield Municipal Fund Composite Index is a custom benchmark comprised
of the Bloomberg Municipal High Yield Bond Index (60%) and the Bloomberg
Municipal Bond Index (40%) (with distributions reinvested). The
Bloomberg U.S.
Aggregate Bond Index represents an unmanaged diversified portfolio of investment
grade, U.S. dollar-denominated, fixed income securities, including U.S.
Treasuries, government-related and corporate securities, mortgage-backed
securities (agency fixed-rate pass-throughs), asset-backed securities and
commercial mortgage-backed securities (agency and non-agency).
Short Duration
Tax-Free Fund
The Fund
invests, under normal market conditions, at least 80% of its Net Assets in
Municipal Securities, the interest on which is exempt from regular federal
income tax (i.e., excluded from gross income for federal income tax purposes),
and is not a tax preference item under the federal alternative minimum tax.
Under normal market conditions, the Fund’s investments in private activity bonds
and taxable investments will not exceed, in the aggregate, 20% of the Fund’s Net
Assets. The interest from private activity bonds (including the Fund’s
distributions of such interest) may be a preference item for purposes of the
federal alternative minimum tax. 100% of the Fund’s portfolio will be invested
in U.S. dollar-denominated securities.
The Fund
invests in securities rated at least BBB or Baa by a NRSRO at the time of
purchase, or if unrated, determined by its investment adviser to be of
comparable credit quality.
The Fund
may also seek to obtain exposure to fixed income investments through investments
in affiliated or unaffiliated investment companies, including ETFs.
The team
uses a multi-faceted approach when evaluating whether to add or maintain
exposure to any individual position. A top-down approach is used to assess broad
macro trends while a bottom-up analysis is used to determine relative value
between individual securities. Individual securities will be considered for
purchase or sale based on credit profile, risk, structure, pricing, and
portfolio impact, as well as duration management, restructuring, opportunistic
trading and tax loss harvesting.
Under normal interest rate
conditions, the Fund’s duration is expected to approximate that of the Bloomberg
Municipal Bond 1-3 Year Blend Index, plus or minus 0.5 years. (Historically,
over the last five years, the duration of the Bloomberg Municipal Bond 1-3 Year
Blend Index has ranged between 1.92 and 2.17 years). The reference to
“Short-Duration” in the Fund’s name refers to this duration.
The Investment Adviser
measures the Fund’s performances against the Bloomberg Municipal Bond 1-3 Year
Blend Index.
The Fund’s
broad-based securities market index is the Bloomberg US Aggregate Bond Index.
The Bloomberg Municipal Bond 1-3 Year Blend Index an unmanaged index that
represents investment grade municipal bonds with maturities greater than one
year and less than four years. The
Bloomberg U.S.
Aggregate Bond Index represents an unmanaged diversified portfolio of investment
grade, U.S. dollar-denominated, fixed income securities, including U.S.
Treasuries, government-related and corporate securities, mortgage-backed
securities (agency fixed-rate pass-throughs), asset-backed securities and
commercial mortgage-backed securities (agency and non-agency).
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
(and to the extent that it is permitted to invest in the following), each Fund
may invest up to 100% of its total assets in securities issued or guaranteed by
20
Investment
Management Approach
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 (“S&P”), P-2 by Moody’s Investors Service, Inc. (“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 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.
U.S. Municipal
Investment Philosophy:
Our process
emphasizes:
◼
In-depth
security research
◼
Tax
efficiency and after-tax income
◼
Yield
Curve Strategies
◼
Disciplined
Risk Management
The
U.S. Municipal
Portfolio Management Team employs a fundamental investment process that
considers a wide range of factors, and no one factor or consideration is
determinative. Traditional fundamental factors that the U.S. Municipal Portfolio
Management Team may consider include, but are not limited to, leverage,
financials, industry trends and macroeconomic factors. As part of its
fundamental investment process, the U.S. Municipal Portfolio Management Team may
integrate environmental, social and governance (“ESG”) factors alongside
traditional fundamental factors to seek to: (i) determine whether a particular
fixed income security and/or sector is suitable and attractively priced for
investment and (ii) assess their potential impact on the credit quality and
spreads of a particular fixed income security. ESG factors that the U.S.
Municipal Portfolio Management Team may consider include, but are not limited
to, physical risk (e.g., wildfires, floods, droughts and rising sea levels),
governance practices and board structure. The identification of a risk related
to an ESG factor will not necessarily exclude a particular fixed income security
and/or sector that, in the U.S. Municipal Portfolio Management Team’s view, is
otherwise suitable and attractively priced for investment, and the U.S.
Municipal Portfolio Management Team may invest in a security or sector without
integrating ESG factors or considerations into its fundamental investment
process. The relevance of specific traditional fundamental factors and ESG
factors to the fundamental investment process varies across asset classes,
sectors and strategies. The U.S. Municipal Portfolio Management Team may utilize
data sources provided by third-party vendors and/or engage directly with issuers
when assessing the above factors.
With every fixed
income portfolio, the Investment Adviser applies a team approach that emphasizes
risk management and capitalizes on GSAM’s extensive research
capabilities.
Each of the
Funds described in the Prospectus has a target duration. A Fund’s duration
approximates its price sensitivity to changes in interest rates. For example,
suppose that interest rates in one day fall by 1% which, in turn, causes yields
on every bond in the market to fall by the same amount. In this example, the
price of a bond with a duration of 3 years may be expected to rise approximately
3% and the price of a bond with a 5 year duration may be expected to rise
approximately 5%. The converse is also true. Suppose interest rates in one day
rise by 1% which, in turn, causes yields on every bond in the market to rise by
the same amount. In this second example, the price of a bond with a duration of
3 years may be expected to fall approximately 3% and the price of a bond with a
5 year duration may be expected to fall approximately 5%. The longer the
duration of a bond, the more sensitive the bond’s price is to changes in
interest rates. In computing portfolio duration, a Fund will estimate the
duration of obligations that are subject to prepayment or redemption by the
issuer, taking into account the influence of interest rates on prepayments and
coupon flows. This method of computing duration is known as “option-adjusted”
duration. A Fund will not be limited as to its maximum weighted average
portfolio maturity or the maximum stated maturity or the maximum stated maturity
with respect to individual securities unless otherwise noted.
Maturity
measures the time until final payment is due; it takes no account of the pattern
of a security’s cash flows over time. In calculating maturity, a Fund may
determine the maturity of a variable or floating rate obligation according to
its interest rate reset date, or the date principal can be recovered on demand,
rather than the date of ultimate maturity. Similarly, to the extent that a fixed
income obligation has a call, refunding or redemption provision, the date on
which the instrument is expected to be called, refunded, or redeemed may be
considered to be its maturity date. There is no guarantee that the expected
call, refund or redemption will occur, and a Fund’s average maturity may
lengthen beyond the Investment Adviser’s expectations should the expected call,
refund or redemption not occur.
Each Fund
also has credit rating requirements for the securities it buys. A Fund will deem
a security to have met its minimum credit rating requirement if the security has
the required rating at the time of purchase from at least one NRSRO even though
it has been rated below the minimum rating by one or more other NRSROs. Unrated
securities may be purchased by the Funds if they are determined by the
Investment Adviser to be of comparable credit quality. A security satisfies a
Fund’s minimum rating requirement regardless of its relative ranking (for
example, plus or minus) within a designated major rating category (for example,
BBB or Baa). If
21
a security
satisfies a Fund’s minimum rating requirement at the time of purchase and is
subsequently downgraded below such rating, the Fund will not be required to
dispose of such security. If a downgrade occurs, the Investment Adviser will
consider what action, including the sale of such security, is in the best
interests of a Fund and its shareholders.
|
ADDITIONAL
FEES AND EXPENSES INFORMATION |
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.
Differences
in the “Expense Limitation” ratio across the share classes are the result of the
effect of mathematical rounding on the daily accrual of expense reimbursement,
particularly, in respect to share classes with small amounts of
assets.
|
ADDITIONAL
PERFORMANCE AND BENCHMARK
INFORMATION |
The below
is additional information that relates to the “Performance” section of each
Fund’s summary section.
Note that
the “Best Quarter” and “Worst Quarter” figures shown in the “Performance”
section of each Fund’s Summary section are applicable only to the time period
covered by the bar chart.
The average
annual total return figures reflect maximum initial sales charges of 3.75%,
4.50% and 1.50% for Class A Shares of the Dynamic Municipal Income, High Yield
Municipal and Short Duration Tax-Free Funds, respectively.
The
definitions below apply to the after-tax returns shown in the “Performance”
section of each Fund’s Summary section.
Average
Annual Total Returns Before Taxes. These
returns do not reflect taxes on distributions on a Fund’s Shares nor do they
show how performance can be impacted by taxes when shares are redeemed (sold) by
you.
Average
Annual Total Returns After Taxes on Distributions. These
returns assume that taxes are paid on distributions on a Fund’s Class A Shares
(i.e., dividends and capital gains) but do not reflect taxes that may be
incurred upon redemption (sale) of the Class A Shares at the end of the
performance period.
Average
Annual Total Returns After Taxes on Distributions and Sale of Fund
Shares. These
returns reflect taxes paid on distributions on a Fund’s Class A Shares and taxes
applicable when the shares are redeemed (sold).
Note
on Tax Rates. The
after-tax performance figures are calculated using the historically highest
individual federal marginal income tax rates at the time of the distributions
and do not reflect state and local taxes. In calculating the federal income
taxes due on redemptions, capital gains taxes resulting from a redemption are
subtracted from the redemption proceeds and the tax benefits from capital losses
resulting from the redemption are added to the redemption proceeds. Under
certain circumstances, the addition of the tax benefits from capital losses
resulting from redemptions may cause the Returns After Taxes on Distributions
and Sale of Fund Shares to be greater than the Returns After Taxes on
Distributions or even the Returns Before Taxes.
Note
on Benchmarks. References in the
Prospectus to a Fund’s Regulatory or Performance Benchmark (or any other
benchmark) are for informational purposes only, and unless otherwise noted, are
not an indication of how a particular Fund is managed or a particular Fund’s
risk characteristics.
|
OTHER
INVESTMENT PRACTICES AND
SECURITIES |
Although
each Fund’s principal investment strategies are described in the Funds’
Summary—Principal Strategy section of the Prospectus, the following tables
identify some of the investment techniques that may (but are not required to) be
used by the Funds in seeking to achieve their investment objectives. The tables
also highlight the differences and similarities among the Funds in their use of
these techniques and other investment practices and investment securities.
Numbers in these tables show allowable usage only; for actual usage, consult the
Funds’ annual/semi-annual report. 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 fiscal quarter subject to a thirty day lag
between the date of the information and the date on which the information is
disclosed. In addition, the Funds publish on their website selected portfolio
holdings information as of the end of each month subject to a fifteen 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.
22
Investment
Management Approach
|
10
Percent of total assets (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 |
Dynamic
Municipal
Income
Fund |
High
Yield
Municipal
Fund |
Short
Duration
Tax-Free
Fund |
|
Investment
Practices |
|
|
|
|
Borrowings |
33 1∕3 |
33 1∕3 |
33 1∕3 |
|
Credit,
Interest Rate and Total Return Swaps |
• |
• |
• |
|
Financial
Futures Contracts and Options on Futures |
• |
• |
• |
|
Illiquid
Investments* |
15 |
15 |
15 |
|
Interest
Rate Floors, Caps and Collars |
• |
• |
• |
|
Investment
Company Securities (including ETFs)** |
10 |
10 |
10 |
|
Options*** |
• |
• |
• |
|
Repurchase
Agreements |
• |
• |
• |
|
Standby
Commitments and Tender Option Bonds |
• |
• |
• |
|
When-Issued
Securities and Forward Commitments |
• |
• |
• |
*
Illiquid
investments are any investments that a Fund reasonably expects cannot be sold or
disposed of in current market conditions in seven calendar days or less without
the sale or disposition significantly changing the market value of the
investment.
**
This
percentage limitation does not apply to a Fund’s investments in investment
companies (including ETFs) where a higher percentage limitation is permitted
under the Investment Company Act or rules, regulations or exemptive relief
thereunder.
***
The
Funds may sell call and put options and purchase call and put options on
securities and securities indices in which they invest.
23
|
10
Percent of total assets (italic type)
10 Percent
of Net Assets (including borrowings for investment purposes) (roman
type)
• No
specific percentage limitation on usage;
limited
only by the objectives and strategies of the Fund
— Not
permitted |
Dynamic
Municipal
Income
Fund |
High
Yield
Municipal
Fund |
Short
Duration
Tax-Free
Fund |
|
Investment
Securities |
|
|
|
|
Asset-Backed
Securities |
• |
• |
• |
|
Convertible
Securities |
• |
• |
• |
|
Corporate
Debt Obligations and Trust Preferred Securities |
• |
• |
• |
|
Floating
and Variable Rate Obligations |
• |
• |
• |
|
Lower
Grade Fixed Income Securities |
30 |
• |
— |
|
Structured
Securities1 |
• |
• |
• |
|
Tax-Free
Municipal Securities |
80+2 |
80+2 |
80+2,3 |
|
Taxable
Municipal Securities |
20 |
20 |
20 |
|
Temporary
Investments |
•4 |
•4,5 |
•4 |
|
U.S.
Government Securities |
• |
• |
• |
1
Structured
securities are not subject to the same minimum credit quality requirements as a
Fund’s investments in fixed income securities.
2
Each
Fund will invest at least 80% of its Net Assets in municipal securities, the
interest on which is exempt from regular federal income tax.
3
The
Short Duration Tax-Free Fund will invest at least 80% of its Net Assets in
obligations, the interest on which is exempt from regular federal income tax and
is not a tax preference item under the federal alternative minimum
tax.
4
Each
Fund may invest no more than 20% of its Net Assets in taxable investments under
normal market conditions. Under unusual conditions, taxable investments may
exceed this percentage.
5
The
High Yield Municipal Fund may for this purpose invest in investment and high
grade securities without limit.
24
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 |
Dynamic
Municipal
Income
Fund |
High
Yield
Municipal
Fund |
Short
Duration
Tax-Free
Fund |
|
Call/Prepayment |
• |
• |
• |
|
Credit/Default |
✓ |
✓ |
✓ |
|
Cybersecurity |
• |
• |
• |
|
Derivatives |
• |
• |
• |
|
Distressed
Debt |
• |
• |
• |
|
ESG
Integration |
• |
• |
• |
|
Extension |
• |
• |
• |
|
Floating
and Variable Rate Obligations |
• |
• |
• |
|
Geographic
and Sector |
✓ |
✓ |
✓ |
|
Interest
Rate |
✓ |
✓ |
✓ |
|
Large
Shareholder Transactions |
✓ |
✓ |
✓ |
|
Liquidity |
✓ |
✓ |
✓ |
|
Management |
• |
• |
• |
|
Market |
✓ |
✓ |
✓ |
|
Municipal
Securities |
✓ |
✓ |
✓ |
|
NAV |
• |
• |
• |
|
Non-Investment
Grade Fixed Income Securities |
✓ |
✓ |
|
|
Other
Investment Companies |
✓ |
✓ |
✓ |
|
State/Territory
Specific |
✓ |
✓ |
✓ |
|
Tax |
✓ |
✓ |
✓ |
|
U.S.
Government Securities |
• |
• |
• |
◼
Call/Prepayment
Risk—An issuer
could exercise its right to pay principal on an obligation held by the
Fund (such as an asset-backed security) earlier than expected. This may
happen when there is a decline in interest rates, when credit spreads change, or
when an issuer’s credit quality improves. Under these circumstances, the Fund
may be unable to recoup all of its initial investment and will also suffer from
having to reinvest in lower-yielding securities.
◼
Credit/Default
Risk—An issuer
or guarantor of fixed income securities or instruments held by a Fund
(which may have low credit ratings) may default on its obligation to pay
interest and repay principal or default on any other obligation. This risk
includes the risk of default on foreign letters of credit or guarantees that may
back Municipal Securities. 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 a 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.
25
◼
Derivatives
Risk—The
Fund’s use of options, futures, forwards, swaps, options on swaps, structured
securities and other derivatives
and similar
instruments (collectively referred to in this paragraph as “derivatives”) may
result in losses, including due to adverse market movements. Derivatives, which
may pose risks in addition to and greater than those associated with investing
directly in securities, currencies or other instruments, may increase market
exposure and be illiquid or less liquid, volatile, difficult to price and
leveraged so that small changes in the value of the underlying assets or
instruments may produce disproportionate losses to the Fund. Certain derivatives
are also subject to counterparty risk, which is the risk that the other party in
the transaction will not fulfill, or lacks the capacity or authority to fulfill,
its contractual obligations, liquidity risk, which includes the risk that the
Fund will not be able to close its derivatives position when it is advantageous
to do so, and risks arising from margin requirements, which include the risk
that the Fund will be required to pay additional margin or set aside additional
collateral to maintain open derivative positions. Derivatives may be used for
both hedging and non-hedging purposes.
The use of
derivatives is a highly specialized activity that involves investment techniques
and risks different from those associated with investments in more traditional
securities and instruments, and there is no guarantee that the use of
derivatives will achieve their intended result. If the Investment Adviser is
incorrect in its expectation of the timing or level of fluctuation in securities
prices, interest rates, currency prices or other variables, the use of
derivatives could result in losses, which in some cases may be significant. A
lack of correlation between changes in the value of derivatives and the value of
the portfolio assets (if any) being hedged could also result in losses. In
addition, there is a risk that the performance of the derivatives or other
instruments used by the Investment Adviser to replicate the performance of a
particular asset class may not accurately track the performance of that asset
class. In addition, a Fund’s use of derivatives could affect the amount, timing
and character of distributions to shareholders which may result in a Fund
realizing less tax-exempt income and more income subject to tax at ordinary
income tax rates than it would if it did not engage in derivative transactions,
which may adversely impact a Fund’s after-tax return.
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.
◼
Distressed
Debt Risk—When a
Fund invests in obligations of financially troubled companies (sometimes known
as “distressed” securities), there exists the risk that the transaction
involving such debt obligations will be unsuccessful, take considerable time or
will result in a distribution of cash or a new security or obligation in
exchange for the stressed and distressed debt obligations, the value of which
may be less than the Fund’s purchase price of such debt obligations.
Furthermore, if an anticipated transaction does not occur, a Fund may be
required to sell its investment at a loss or hold its investment pending
bankruptcy proceedings in the event the issuer files for
bankruptcy.
◼
ESG
Integration Risk—The
Investment Adviser employs a fundamental investment process that may integrate
ESG factors with traditional fundamental factors. The relevance and
weightings of specific ESG factors to or within the fundamental investment
process varies across asset classes, sectors and strategies and no one factor or
consideration is determinative. When integrating ESG factors into the
investment process, the Investment Adviser may rely on third-party data that it
believes to be reliable, but it does not guarantee the accuracy of such
third-party data. ESG information from third-party data providers may be
incomplete, inaccurate or unavailable, which may adversely impact the investment
process. Moreover, ESG information, whether from an external and/or
internal source, is, by nature and in many instances, based on a qualitative and
subjective assessment. An element of subjectivity and discretion is
therefore inherent to the interpretation and use of ESG data. The process
for conducting ESG assessments and implementation of ESG views in client/fund
portfolios, including the format and content of such analysis and the tools
and/or data used to perform such analysis, may also vary among the Investment
Adviser’s portfolio management teams. While the Investment Adviser believes that
the integration of material ESG factors into the Fund’s investment process has
the potential to identify financial risks and contribute to the Fund’s long-term
performance, ESG factors may not be considered for each and every investment
decision, and there is no guarantee that the integration of ESG factors will
result in better performance. Investors can differ in their views of what
constitutes positive or negative ESG characteristics. Moreover, the current
lack of common standards may result in different approaches to integrating ESG
factors. As a result, the Fund may invest in companies that do not reflect
the beliefs and values of any particular investor. The Investment Adviser’s
approach to ESG integration may evolve and develop over time, both due to a
refinement of investment decision-making processes to address ESG factors and
risks, and because of legal and regulatory developments.
◼
Extension
Risk—An issuer
could exercise its right to pay principal on an obligation held by a Fund(such
as an asset-backed security) later than expected. This may happen when there is
a rise in interest rates. Under these circumstances, the value of the obligation
will decrease, and a Fund will also suffer from the inability to reinvest in
higher yielding securities.
◼
Floating
and Variable Rate Obligations Risk—Floating
rate and variable rate obligations are debt instruments issued by companies or
other entities with interest rates that reset periodically (typically, daily,
monthly, quarterly, or semi-annually) in response to changes in the market rate
of interest on which the interest rate is based. For floating and variable rate
obligations, there may be a lag between an actual change in the underlying
interest rate benchmark and the reset time for an interest payment of such an
obligation, which could harm or benefit the Fund, depending on the interest rate
environment or other circumstances. In a rising
26
Risks
of the Funds
interest
rate environment, for example, a floating or variable rate obligation that does
not reset immediately would prevent the Fund from taking full advantage of
rising interest rates in a timely manner. However, in a declining interest rate
environment, the Fund may benefit from a lag due to an obligation’s interest
rate payment not being immediately impacted by a decline in interest
rates.
Certain
floating and variable rate obligations have an interest rate floor feature,
which prevents the interest rate payable by the security from dropping below a
specified level as compared to a reference interest rate (the “reference rate”),
such as Secured Overnight Financing Rate (“SOFR”), Term SOFR or another rate
determined using SOFR. Such a floor protects the Fund from losses resulting from
a decrease in the reference rate below the specified level. However, if the
reference rate is below the floor, there will be a lag between a rise in the
reference rate and a rise in the interest rate payable by the obligation, and
the Fund may not benefit from increasing interest rates for a significant amount
of time.
Some
floating or variable rate obligations or investments of the Fund may reference
(or may have previously referenced) LIBOR. As a result of benchmark reforms,
publication of most LIBOR settings has ceased. Some LIBOR settings continue to
be published but only on a temporary, synthetic and non-representative basis and
are expected to cease being published in September 2024. Regulated entities have
generally ceased entering into new LIBOR contracts in connection with regulatory
guidance or prohibitions. Public and private sector actors have worked to
establish alternative reference rates, like SOFR or Term SOFR, to be used in
place of LIBOR. There is no assurance that any such alternative reference rate
will be similar to or produce the same value or economic equivalence as LIBOR or
that it will have the same volume or liquidity as did LIBOR which may affect the
value, volatility, liquidity or return on certain of the Fund’s floating and
variable rate obligations and investments and result in costs incurred in
connection with changing reference rates used for positions, closing out
positions and entering into new trades. For example, LIBOR was previously
calculated using the average rate at which a selection of large global banks
reported they could borrow from one another and SOFR is a measure of the cost of
borrowing cash overnight, collateralized by the U.S. Treasury securities, and is
based on directly observable U.S. Treasury-backed repurchase transactions.
Certain of the Fund’s obligations or investments may have transitioned from
LIBOR or may transition from LIBOR in the future. The transition from LIBOR to
alternative reference rates may result in operational issues for the Fund or its
obligations or investments. Any pricing adjustments to the Fund’s obligations or
investments resulting from use of an alternative reference rate may also
adversely affect the Fund’s performance and/or NAV. No assurances can be given
as to the impact of the LIBOR transition (and the timing of any such impact) on
the Fund and its obligations and investments.
◼
Geographic
and Sector Risk—If a Fund
invests a significant portion of its total assets in securities of issuers
within the same state, geographic region or economic sector, an adverse
economic, business, political, environmental or other development affecting that
state, region or sector may affect the value of the Fund’s investments more than
if its investments were not so focused.
◼
Interest
Rate Risk—When
interest rates increase, fixed income securities or instruments held by
the Fund (which may include inflation protected securities) will generally
decline in value. Long-term fixed income securities or instruments will normally
have more price volatility because of this risk than short-term fixed income
securities or instruments. A wide variety of market factors can cause interest
rates to rise, including central bank monetary policy, rising inflation and
changes in general economic conditions. Changing interest rates may have
unpredictable effects on the markets, may result in heightened market volatility
and may detract from Fund performance to the extent the Fund is exposed to such
interest rates and/or volatility. In addition, changes in monetary policy may
exacerbate the risks associated with changing interest rates. Funds with longer
average portfolio durations will generally be more sensitive to changes in
interest rates than funds with a shorter average portfolio duration.
Fluctuations in interest rates may also affect the liquidity of fixed income
securities and instruments held by the Fund.
It is
difficult to predict the magnitude, timing or direction of interest rate changes
and the impact these changes will have on the markets in which the Fund
invests.
◼
Large
Shareholder Transactions Risk—The Fund
may experience adverse effects when certain large shareholders, such as other
funds, institutional investors (including those trading by use of
non-discretionary mathematical formulas), financial intermediaries (who may make
investment decisions on behalf of underlying clients and/or include the Fund in
their investment model), individuals, accounts and Goldman Sachs affiliates,
purchase or redeem large amounts of shares of the Fund. Such large shareholder
redemptions, which may occur rapidly or unexpectedly, may cause the Fund to sell
portfolio securities at times when it would not otherwise do so, which may
negatively impact the Fund’s NAV and liquidity. Similarly, large Fund share
purchases may adversely affect the Fund’s performance to the extent that the
Fund is delayed in investing new cash or otherwise maintains a larger cash
position than it ordinarily would. These transactions may also accelerate the
realization of taxable income to shareholders if such sales of investments
resulted in gains, and may also increase transaction costs. In addition, a large
redemption could result in the Fund’s current expenses being allocated over a
smaller asset base, leading to an increase in the Fund’s expense
ratio.
◼
Liquidity
Risk—The Fund
may invest in securities or instruments that trade in lower volumes, that are
less liquid than other investments and/or that may become illiquid or less
liquid in response to market developments or adverse investor perceptions.
Investments that are illiquid or that trade in lower volumes may be more
difficult to value. When there is no willing buyer and
27
investments
cannot be readily sold at the desired time or price, that 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 a
Fund's value or prevent the Fund from being able to take advantage of other
investment opportunities.
To the
extent that the traditional dealer counterparties that engage in fixed income
trading do not maintain inventories of bonds (which provide an important
indication of their ability to “make markets”) that keep pace with the growth of
the bond markets over time, relatively low levels of dealer inventories could
lead to decreased liquidity and increased volatility in the fixed income
markets. Additionally, market participants other than a Fund may attempt to sell
fixed income holdings at the same time as the Fund, which could cause downward
pricing pressure and contribute to decreased liquidity.
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 a
Fund holds non-investment grade fixed income securities, the Fund may be
especially subject to the risk that during certain periods, the liquidity of
particular issuers or industries, or all securities within a particular
investment category, may shrink or disappear suddenly and without warning as a
result of adverse economic, market or political events (including periods of
rapid interest rate changes), or adverse investor perceptions, whether or not
accurate.
Liquidity
risk may also refer to the risk that that 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. While that Fund reserves the right to meet
redemption requests through in-kind distributions, a may instead choose to raise
cash to meet redemption requests through sales of portfolio securities or
permissible borrowings. If that Fund is forced to sell securities at an
unfavorable time and/or under unfavorable conditions, such sales may adversely
affect a Fund's NAV and dilute remaining investors’ interests.
Certain
shareholders, including clients or affiliates of the Investment Adviser and/or
other funds managed by the Investment Adviser, may from time to time own or
control a significant percentage of the shares. Redemptions by these
shareholders of their shares of that may further increase a Fund's liquidity
risk and may impact a 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
market value of the securities in which a 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. A 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. A 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.
◼
Municipal
Securities Risk—Municipal
securities are subject to call/prepayment risk, credit/default risk,
extension risk, interest rate risk and certain additional risks. The Fund may be
more sensitive to adverse economic, business or political developments if it
invests a substantial portion of its assets in the bonds of similar projects
(such as those relating to education, health care, housing, transportation, and
utilities), industrial development bonds, or in particular types of municipal
securities (such as general obligation bonds, private activity bonds and moral
obligation bonds). While interest earned on Municipal Securities is generally
not subject to federal tax, any interest earned on taxable Municipal Securities
is fully taxable at the federal level and may be subject to tax at the state
level. Specific risks are associated with different types of municipal
securities. With respect to general obligation bonds, the full faith, credit and
taxing power of the municipality that issues a general obligation bond secures
payment of interest and repayment of principal. Timely payments depend on the
issuer’s credit quality, ability to raise tax revenues and ability to maintain
an adequate tax base. Certain of the municipalities in which the Fund invests
may experience significant financial difficulties, which may lead to bankruptcy
or default.
With
respect to revenue bonds, payments of interest and principal are made only from
the revenues generated by a particular facility, class of facilities or the
proceeds of a special tax, or other revenue source, and depends on the money
earned by that source. Private activity bonds are issued by municipalities and
other public authorities to finance development of industrial facilities for use
by a private enterprise. The private enterprise pays the principal and interest
on the bond, and the issuer does not pledge its full faith, credit and taxing
power for repayment. If the private enterprise defaults on its payments, the
Fund may not receive any
28
Risks
of the Funds
income or
get its money back from the investment. Moral obligation bonds are generally
issued by special purpose public authorities of a state or municipality. If the
issuer is unable to meet its obligations, repayment of these bonds becomes a
moral commitment, but not a legal obligation, of the state or municipality.
Municipal notes are shorter term municipal debt obligations. They may provide
interim financing in anticipation of, and are secured by, tax collection, bond
sales or revenue receipts. If there is a shortfall in the anticipated proceeds,
the notes may not be fully repaid and the Fund may lose money. In a municipal
lease obligation, the issuer agrees to make payments when due on the lease
obligation. The issuer will generally appropriate municipal funds for that
purpose, but is not obligated to do so. Although the issuer does not pledge its
unlimited taxing power for payment of the lease obligation, the lease obligation
is secured by the leased property. However, if the issuer does not fulfill its
payment obligation it may be difficult to sell the property and the proceeds of
a sale may not cover the Fund’s loss.
◼
NAV
Risk—The net
asset value of the Fund and the value of your investment will
fluctuate.
◼
Non-Investment
Grade Fixed Income Securities Risk—Non-investment
grade fixed income securities and unrated securities of comparable credit
quality (commonly known as “junk bonds”) are considered speculative and are
subject to the increased risk of an issuer’s inability to meet principal and
interest payment obligations. These securities may be subject to greater price
volatility due to such factors as specific issuer developments, interest rate
sensitivity, negative perceptions of the junk bond markets generally and less
liquidity.
◼
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.
◼
State/Territory
Specific Risk—The Fund’s
investments in municipal obligations of issuers located in a particular state or
U.S. territory may be adversely affected by political, economic and regulatory
developments within that state or U.S. territory. Such developments may affect
the financial condition of a state’s or territory’s political subdivisions,
agencies, instrumentalities and public authorities and heighten the risks
associated with investing in bonds issued by such parties, which could, in turn,
adversely affect the Fund’s income, NAV, liquidity, and/or ability to preserve
or realize capital appreciation. From time to time, a Fund may focus its
investments in one or more state, territory, or geographic region, which will
subject the Fund, to a greater extent than if it were not so focused, to the
risks associated with that state, territory, or geographic
region.
◼
Tax
Risk—The Funds
may be adversely impacted by changes in tax rates and policies. Because interest
income from Municipal Securities is normally not subject to regular federal
income taxation, the attractiveness of Municipal Securities in relation to other
investment alternatives is affected by changes in federal and state income tax
rates or changes in the tax-exempt status of interest income from Municipal
Securities. Any proposed or actual changes in such rates or exempt status,
therefore, can significantly affect the demand for and supply, liquidity and
marketability of Municipal Securities. This could in turn affect a Fund’s net
asset value and ability to acquire and dispose of Municipal Securities at
desirable yield and price levels. Additionally, these Funds would not be a
suitable investment for IRAs, other tax-exempt or tax-deferred accounts or for
other investors who are not sensitive to the federal, state or local income tax
consequences of their investments.
◼
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 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.
29
Service
Providers
|
INVESTMENT
ADVISER |
|
Investment
Adviser |
Fund |
|
Goldman
Sachs Asset Management, L.P. (“GSAM”)
200
West Street
New
York, NY 10282 |
Dynamic
Municipal Income
High
Yield Municipal
Short
Duration Tax-Free |
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 March 31, 2024, GSAM, including its investment
advisory affiliates, had assets under supervision of approximately $2.56
trillion.
The
Investment Adviser provides day-to-day advice regarding the Fund’s portfolio
transactions. The Investment Adviser makes the investment decisions for the Fund
and places purchase and sale orders for the Fund’s portfolio transactions in
U.S. and foreign markets. As permitted by applicable law, these orders may be
directed to any executing brokers, dealers, futures commission merchants or
other counterparties, including Goldman Sachs and its affiliates. While the
Investment Adviser is ultimately responsible for the management of the Fund, it
is able to draw upon the research and expertise of its asset management
affiliates for portfolio decisions and management with respect to certain
portfolio securities. In addition, the Investment Adviser has access to the
research and certain proprietary technical models developed by Goldman Sachs
(subject to legal, internal, regulatory and Chinese Wall restrictions), and will
apply quantitative and qualitative analysis in determining the appropriate
allocations among categories of issuers and types of
securities.
The
Investment Adviser also performs the following additional services for the Fund
(to the extent not performed by others pursuant to agreements with the
Fund):
◼
Supervises
all non-advisory operations of the Fund
◼
Provides
personnel to perform necessary executive, administrative and clerical services
to the Fund
◼
Arranges
for the preparation of all required tax returns, reports to shareholders,
prospectuses and statements of additional information and other reports filed
with the SEC and other regulatory authorities
◼
Maintains
the records of the Fund
◼
Provides
office space and all necessary office equipment and services
An
investment in the Fund may be negatively impacted because of the operational
risks arising from factors such as processing errors and human errors,
inadequate or failed internal or external processes, failures in systems and
technology, changes in personnel, and errors caused by third-party service
providers or trading counterparties. 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.
|
MANAGEMENT
FEES AND OTHER EXPENSES |
As
compensation for its services and its assumption of certain expenses, the
Investment Adviser is entitled to the following fees, computed daily and payable
monthly, at the annual rates listed below (as a percentage of each respective
Fund’s average daily net assets):
|
Fund |
Contractual
Management
Fee
Annual Rate |
Average
Daily
Net
Assets |
Actual
Rate
For
the Fiscal
Year
Ended
March
31, 2024* |
|
Dynamic
Municipal Income |
0.40% |
First $1
Billion |
0.35% |
|
|
0.36% |
Next $1
Billion |
|
|
|
0.34% |
Next $6
Billion |
|
|
|
0.33% |
Over $8
Billion |
|
30
Service
Providers
|
Fund |
Contractual
Management
Fee
Annual Rate |
Average
Daily
Net
Assets |
Actual
Rate
For
the Fiscal
Year
Ended
March
31, 2024* |
|
High
Yield Municipal |
0.55% |
First $2
Billion |
0.50% |
|
|
0.50% |
Next $3
Billion |
|
|
|
0.48% |
Next $3
Billion |
|
|
|
0.47% |
Over $8
Billion |
|
|
Short
Duration Tax-Free |
0.39% |
First $1
Billion |
0.34% |
|
|
0.35% |
Next $1
Billion |
|
|
|
0.33% |
Next $6
Billion |
|
|
|
0.32% |
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 may waive a portion of its management fee, including fees
earned as the Investment Adviser to any of the affiliated funds in which the
Funds 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.
The Investment Adviser has
agreed to reduce or limit each Fund’s “Other Expenses” (excluding acquired fund
fees and expenses, transfer agency fees and expenses, service fees and
shareholder administration fees (as applicable), taxes, interest, brokerage
fees, expenses of shareholder meetings, litigation and indemnification, and
extraordinary expenses) to 0.004% of the Fund’s average daily net assets,
through at least July 29, 2025, and prior to such date, the Investment Adviser
may not terminate the arrangements without the approval of the Board of
Trustees. The expense limitations may be modified or terminated by the
Investment Adviser at its discretion and without shareholder approval after such
date, although the Investment Adviser does not presently intend to do so. A
Fund’s “Other Expenses” may be further reduced by any custody and transfer
agency fee credits received by the Fund.
A discussion regarding the
basis for the Board of Trustees’ approval of the Management Agreements for the
Funds in 2023 is available in the Funds’ semi-annual report dated September 30,
2023. A discussion regarding the basis for the Board of Trustees’ approval of
the Management Agreements for the Funds in 2024 will be available in the Funds’
Form N-CSR dated September 30, 2024.
|
FUND
MANAGERS |
U.S. Municipal
Portfolio Management Team
The
individuals jointly and primarily responsible for the day-to-day management of
the Fund are listed below. The Fund’s portfolio managers' individual
responsibilities may differ and may include, among other things, security
selection, asset allocation, risk budgeting and general oversight of the
management of the Fund’s portfolios.
|
Name
and Title |
Fund
Responsibility |
Years
Primarily
Responsible |
Five
Year Employment History |
|
Scott
Diamond
Managing
Director |
Portfolio
Manager—
Dynamic
Municipal Income
High
Yield Municipal
Short
Duration Tax-Free |
Since
2002
2002
2002 |
Mr.
Diamond is a portfolio manager on the U.S. Municipals Team. He
joined
the Investment Adviser in 2002 as a portfolio
manager. |
|
Joseph
Wenzel
Vice
President |
Portfolio
Manager—
Dynamic
Municipal Income
High
Yield Municipal
Short
Duration Tax-Free |
Since
2019
2019
2019 |
Mr.
Wenzel is a portfolio manager on the U.S. Municipals Team. He
joined
the Investment Adviser in 2002. |
|
Sylvia
Yeh
Managing
Director |
Portfolio
Manager—
Dynamic
Municipal Income
High
Yield Municipal
Short
Duration Tax-Free |
Since
2021
2021
2021 |
Ms.
Yeh is a portfolio manager on the U.S. Municipals Team. She
joined
the Investment Adviser in
1999. |
For
information about the portfolio managers’ compensation, other accounts managed
by the portfolio managers and the portfolio managers’ ownership of securities in
the Fund, see the SAI.
Goldman
Sachs, 200 West Street, New York, NY 10282, serves as the exclusive distributor
(the “Distributor”) of each Fund’s shares. Goldman Sachs, 71 South Wacker Drive,
Suite 1200, Chicago, IL 60606, also serves as each Fund’s transfer agent (the
“Transfer Agent”) and, as such, performs various shareholder servicing
functions.
31
In
connection with its distribution and/or personal and account maintenance
services and expenses, Goldman Sachs is entitled to receive distribution and/or
service fees equal, on an annualized basis, to 0.25% of the average daily net
assets with respect to Class A Shares, 0.75% of the average daily net assets
with respect to Class C Shares and 0.25% of the average daily net assets with
respect to Service Shares.
Goldman Sachs has agreed to
waive a portion of the distribution and/or service fees equal to 0.35% of the
average daily net assets attributable to Class C Shares of the Goldman Sachs
Short Duration Tax-Free Fund. This arrangement will remain in effect through at
least July 29, 2025, and prior to such date, Goldman Sachs may not terminate the
arrangement without the approval of the Board of Trustees.
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, to 0.04% of the average daily net assets with
respect to the Institutional and Service Shares and 0.12% of the average daily
net assets with respect to the Class A, Class C and Investor Shares.
Goldman Sachs has agreed to
waive a portion of its transfer agency fee equal to 0.02% and 0.06% as an annual
percentage rate of the average daily net assets attributable to Class A, Class C
and Investor Shares of the Goldman Sachs High Yield Municipal Fund and the
Goldman Sachs Short-Duration Tax-Free Fund, respectively. This arrangement will
remain in effect through at least July 29, 2025, and prior to such date, Goldman
Sachs may not terminate the arrangement without the approval of the Board of
Trustees.
From time
to time, Goldman Sachs or any of its affiliates may purchase and hold shares of
the Fund. Goldman Sachs and its affiliates reserve the right to redeem at any
time some or all of the shares acquired for their own accounts.
|
ACTIVITIES
OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER
ACCOUNTS
MANAGED BY GOLDMAN SACHS |
The involvement of the
Investment Adviser, Goldman Sachs and their affiliates in the management of, or
their interest in, other accounts and other activities of Goldman Sachs will
present conflicts of interest with respect to the Fund and will, under certain
circumstances, limit the Fund’s investment activities. Goldman Sachs is a
worldwide, full service investment banking, broker dealer, asset management and
financial services organization and a major participant in global financial
markets that provides a wide range of financial services to a substantial and
diversified client base that includes corporations, financial institutions,
governments and individuals. As such, it acts as a broker-dealer, investment
adviser, investment banker, underwriter, research provider, administrator,
financier, adviser, market maker, trader, prime broker, derivatives dealer,
clearing agent, lender, counterparty, agent, principal, distributor, investor or
in other commercial capacities for accounts or companies (including Fund
portfolio companies) or affiliated or unaffiliated investment funds (including
pooled investment vehicles and private funds) in which one or more accounts,
including the Fund, invest. In those and other capacities, Goldman Sachs and its
affiliates advise and deal with clients and third parties in all markets and
transactions and purchase, sell, hold and recommend a broad array of
investments, including securities, derivatives, loans, commodities, currencies,
credit default swaps, indices, baskets and other financial instruments and
products for their own accounts or for the accounts of their customers and have
other direct and indirect interests in the global fixed income, currency,
commodity, equities, bank loans and other markets and the securities and issuers
in which the Fund directly and indirectly invests. Thus, it is expected that the
Fund will have multiple business relationships with and will invest in, engage
in transactions with, make voting decisions with respect to, or obtain services
from entities for which Goldman Sachs and its affiliates perform or seek to
perform investment banking or other services. The Investment Adviser and/or
certain of its affiliates are the managers of the Goldman Sachs Funds. The
Investment Adviser and its affiliates earn fees from this and other
relationships with the Fund. Although management fees paid by the Fund to the
Investment Adviser and certain other fees paid to the Investment Adviser’s
affiliates are based on asset levels, the fees are not directly contingent on
Fund performance, and the Investment Adviser and its affiliates will still
receive significant compensation from the Fund even if shareholders lose money.
Goldman Sachs and its affiliates engage in proprietary trading and advise
accounts and funds which have investment objectives similar to those of the Fund
and/or which engage in and compete for transactions in the same types of
securities, currencies and instruments as the Fund. Goldman Sachs and its
affiliates will not have any obligation to make available any information
regarding their proprietary activities or strategies, or the activities or
strategies used for other accounts managed by them, for the benefit of the
management of the Fund. The results of the Fund’s investment activities,
therefore, will likely differ from those of Goldman Sachs, its affiliates, and
other accounts managed by Goldman Sachs, and it is possible that the Fund could
sustain losses during periods in which Goldman Sachs and its affiliates and
other accounts achieve significant profits on their trading for proprietary or
other accounts. In addition, the Fund may enter into transactions in which
Goldman Sachs and its affiliates or their other clients have an adverse
interest. For example, the Fund may take a long position in a security at the
same time that Goldman Sachs and its affiliates or other accounts managed by the
Investment Adviser or its affiliates take a short position in the same security
(or vice versa). These and other transactions undertaken by Goldman Sachs, its
affiliates or Goldman Sachs-advised clients may, individually or in the
aggregate, adversely impact the Fund. Transactions by one or more Goldman
Sachs-advised clients or the Investment Adviser may have the effect of diluting
or otherwise disadvantaging the values, prices or investment strategies of the
Fund. The Fund’s activities will, under certain circumstances, be limited
because of regulatory restrictions applicable to Goldman Sachs and its
affiliates, and/or their internal policies designed to comply with such
restrictions. As a
32
Service
Providers
global
financial services firm, Goldman Sachs and its affiliates also provide a wide
range of investment banking and financial services to issuers of securities and
investors in securities. Goldman Sachs, its affiliates and others associated
with it are expected to create markets or specialize in, have positions in
and/or effect transactions in, securities of issuers held by the Fund, and will
likely also perform or seek to perform investment banking and financial services
for one or more of those issuers. Goldman Sachs and its affiliates are expected
to have business relationships with and purchase or distribute or sell services
or products from or to distributors, consultants or others who recommend the
Fund or who engage in transactions with or for the Fund. For more information
about conflicts of interest, see the section entitled “Potential Conflicts of
Interest” in the SAI.
A Fund
will, from time to time, make brokerage and other payments to Goldman Sachs and
its affiliates in connection with the Fund’s portfolio investment transactions,
in accordance with applicable law.
33
Distributions
The Fund
pays distributions from its investment income and from net realized capital
gains. You may choose to have distributions paid in:
◼
Cash
◼
Additional
shares of the same class of the same Fund
◼
Shares of
the same or an equivalent class of another Goldman Sachs Fund. Special
restrictions may apply. See the SAI.
You may
indicate your election on your account application. Any changes may be submitted
in writing or via telephone, in some instances, to the Transfer Agent (either
directly or through your Intermediary) at any time before the record date for a
particular distribution. If you do not indicate any choice, your distributions
will be reinvested automatically in the applicable 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
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 net investment income and distributions from net capital gains, if any, are
normally declared and paid as follows:
|
Fund |
Investment
Income
Dividends |
Capital
Gains
Distributions | |
|
Declared |
Paid |
Declared
and Paid | |
|
Dynamic
Municipal Income |
Daily |
Monthly |
Annually |
|
High
Yield Municipal |
Daily |
Monthly |
Annually |
|
Short
Duration Tax-Free |
Daily |
Monthly |
Annually |
In
addition, a Fund may occasionally make a distribution at a time when it is not
normally made.
In addition
to the net investment income dividends declared daily and paid monthly, a 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.
34
Shareholder
Guide
The
following section will provide you with answers to some of the most frequently
asked questions regarding buying and selling the Fund's shares.
|
How
To Buy Shares |
Shares
Offering
Shares of
the Fund are continuously offered through the Distributor. The Fund and the
Distributor will have the sole right to accept orders to purchase shares and
reserve the right to reject any purchase order in whole or in part.
How Can I Purchase
Shares Of The Fund?
You may
purchase shares of the Fund 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 Fund for their customers (“Authorized Institutions”), and if approved by
the Fund, 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 Fund (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 Fund may
have different requirements regarding what constitutes proper form for trade
instructions. Please contact your Intermediary for more information.
For
purchases by check, the Fund 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
Shares are not sold directly to the public. Instead, Investor 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 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 Shares through an Intermediary using a
plan level or omnibus account.
Employee
Benefit Plans generally may open an account and purchase Investor Shares through
Intermediaries, financial planners, Employee Benefit Plan administrators and
other financial intermediaries. Investor Shares may not be available through
certain Intermediaries.
35
Class R6
Shares are generally available to the following investors who purchase shares of
the Fund 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 Fund?
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 ($250,000 in the case of the Dynamic Municipal
Income Fund and $500,000 in the case of the High Yield Municipal Fund and Short
Duration Tax-Free Fund).
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 and Class R6 Shares (except
as provided below) or additional investments in Institutional, Investor 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.
There are
no minimum purchase or account (minimum) requirements with respect to Service
Shares. An Intermediary may, however, impose a minimum amount for initial and
additional investments in Service Shares, and may establish other requirements
such as a minimum account balance. An Intermediary may redeem Service Shares
held by non-complying accounts, and may impose a charge for any special
services.
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 Fund’s 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.
36
Shareholder
Guide
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 Fund 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 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.
Certain
Intermediaries may provide the following services in connection with their
customers’ investments in Service Shares:
◼
Personal
and account maintenance services
◼
Provide
facilities to answer inquiries and respond to correspondence
◼
Act as
liaison between the Intermediary’s customers and the Trust
◼
Assist
customers in completing application forms, selecting dividend and other options,
and similar services
◼
Shareholder
administration services