Prospectus
February
28, 2024
GOLDMAN
SACHS FUNDAMENTAL INTERNATIONAL EQUITY FUNDS
THE SECURITIES AND
EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED
UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
|
AN
INVESTMENT IN A FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED BY THE
FEDERAL DEPOSIT
INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN A FUND
INVOLVES
INVESTMENT
RISKS, AND YOU MAY LOSE MONEY IN A
FUND. |
◼
Goldman Sachs
International Equity ESG Fund
◼
Class A
Shares: GSIFX
◼
Class C
Shares: GSICX
◼
Institutional
Shares: GSIEX
◼
Service
Shares: GSISX
◼
Investor
Shares: GIRNX
◼
Class R6:
GSIWX
◼
Goldman Sachs
International Equity Income Fund
◼
Class A
Shares: GSAKX
◼
Class C
Shares: GSCKX
◼
Institutional
Shares: GSIKX
◼
Investor
Shares: GSTKX
◼
Class R
Shares: GSRKX
◼
Class R6:
GSUKX
|
|
|
|
|
|
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
Waiver and Expense Limitation2
|
( |
( |
( |
( |
( |
( |
|
Total
Annual Fund Operating Expenses After Fee Waiver and
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 |
|
|
|
|
|
MSCI
EAFE Index (Net, USD, Unhedged; reflects no deduction for fees or
expenses) |
|
|
|
|
*
**
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Alexis
Deladerrière, CFA, Managing Director, has managed the Fund since 2012; and
Abhishek Periwal, CFA, Managing Director, has managed the Fund since
2018.
|
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 12 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 12 of
the Prospectus.
6
|
|
|
|
|
|
Class
A |
Class
C |
Institutional |
Investor |
Class
R |
Class
R6 |
|
Maximum
Sales Charge (Load) Imposed on Purchases (as a
percentage
of offering price) |
|
|
|
|
|
|
|
Maximum
Deferred Sales Charge (Load) (as a percentage of the
lower
of original purchase price or sale proceeds)1
|
|
|
|
|
|
|
|
|
Class
A |
Class
C |
Institutional |
Investor |
Class
R |
Class
R6 |
|
Management
Fees |
|
|
|
|
|
|
|
Distribution
and/or Service (12b-1) Fees |
|
|
|
|
|
|
|
Other
Expenses |
|
|
|
|
|
|
|
Service
Fees |
|
|
|
|
|
|
|
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
R Shares |
$ |
$ |
$ |
$ |
|
Class
R6 Shares |
$ |
$ |
$ |
$ |
|
|
$ |
$ |
$ |
$ |
|
|
|
|
|
|
8
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
R Shares |
|
|
|
|
|
Returns |
|
|
|
|
|
Class
R6 Shares |
|
|
|
|
|
Returns
Before Taxes |
|
|
|
|
|
MSCI
EAFE Index (Net, USD, Unhedged; reflects no deduction for fees or
expenses) |
|
|
|
|
*
**
|
Portfolio
Management |
Goldman
Sachs Asset Management, L.P. is the investment adviser for the Fund (the
“Investment Adviser” or “GSAM”).
Portfolio
Managers: Alexis
Deladerrière, CFA, Managing Director, has managed the Fund since 2012; and
Abhishek Periwal, CFA, Managing Director, has managed the Fund since
2018.
|
Buying
and Selling Fund Shares |
The minimum
initial investment for Class A and Class C Shares is, generally, $1,000. The
minimum initial investment for Institutional Shares is, generally, $1,000,000
for individual or certain institutional investors, alone or in combination with
other assets under the management of the Investment Adviser and its affiliates.
There is no minimum for initial purchases of Investor, Class R and Class R6
10
Shares,
except for certain institutional investors who purchase Class R6 Shares directly
with the Fund’s transfer agent for which the minimum initial investment is
$5,000,000. Those share classes with a minimum initial investment requirement do
not impose it on certain employee benefit plans, and Institutional Shares do not
impose it on certain investment advisers investing on behalf of other
accounts.
The minimum
subsequent investment for Class A and Class C shareholders is $50, except for
certain employee benefit plans, for which there is no minimum. There is no
minimum subsequent investment for Institutional, Investor, Class R or Class
R6 shareholders.
You may
purchase and redeem (sell) shares of the Fund on any business day through
certain intermediaries that have a relationship with Goldman Sachs & Co. LLC
(“Goldman Sachs”), including banks, trust companies, brokers, registered
investment advisers and other financial institutions
(“Intermediaries”).
|
Tax
Information |
For
important tax information, please see “Tax Information” on page 12 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 12 of
the Prospectus.
11
Fundamental
International Equity Funds –
Additional Summary Information
Additional Summary Information
|
Tax
Information |
The Funds'
distributions are taxable, and will be taxed as ordinary income or capital
gains, unless you are investing through a tax-deferred arrangement, such as a
401(k) plan or an individual retirement account. Investments made through
tax-deferred arrangements may become taxable upon withdrawal from such
arrangements.
|
Payments
to Broker-Dealers and
Other
Financial Intermediaries |
If you
purchase a Fund through an Intermediary, the Fund and/or its related companies
may pay the Intermediary for the sale of Fund shares and related services. These
payments may create a conflict of interest by influencing the Intermediary and
your salesperson to recommend a Fund over another investment. Ask your
salesperson or visit your Intermediary’s website for more
information.
12
Investment
Management Approach
|
INVESTMENT
OBJECTIVES |
The
International Equity ESG Fund seeks long-term capital appreciation. The
International Equity Income Fund seeks long-term capital appreciation and growth
of income. Each Fund’s investment objective may be changed without shareholder
approval upon 60 days’ notice.
|
PRINCIPAL
INVESTMENT STRATEGIES |
International Equity
ESG Fund
The Fund
invests, under normal circumstances, at least 80% of its Net Assets in a
diversified portfolio of equity investments in non-U.S. issuers that the
Investment Adviser believes adhere to the Fund’s environmental, social and
governance (“ESG”) criteria. Such equity investments may include ETFs, futures
and other instruments with similar economic exposures. Shareholders will be
provided with sixty days’ notice in the manner prescribed by the Securities and
Exchange Commission (“SEC”) before any change in the Fund’s policy to invest at
least 80% of its Net Assets in the particular type of investment suggested by
its name. The Fund intends to have investments economically tied to at least
three countries, not including the United States, and may invest in the
securities of issuers in emerging market countries.
The Fund
seeks to achieve its investment objective by investing, under normal
circumstances, in approximately 30-50 companies that are considered by the
Investment Adviser to be positioned for long-term capital appreciation. The
Fund’s ESG criteria are generally designed to exclude companies that are
directly engaged in, and/or derive significant revenue from, certain industries
or product lines, including, but not limited to:
◼
alcohol;
◼
tobacco;
◼
gambling;
◼
adult
entertainment;
◼
for-profit
prisons;
◼
weapons;
◼
oil and gas
exploration and production;
◼
thermal
coal mining; and
◼
thermal
coal power generation.
In
determining whether a company is directly engaged in, and/or derives significant
revenue from, the industries or product lines listed above, the Fund will use
revenue thresholds for certain industries or product lines (e.g., companies that
derive more than 5% of revenue from tobacco) and categorical exclusions for
other industries or product lines (e.g., companies that derive any revenue from
controversial weapons) and apply such thresholds and exclusions to data provided
by one or more third-party vendor(s). Generally, the highest revenue threshold
used will be 5%. The Investment Adviser, in its sole discretion, retains the
right not to use data provided by third-party vendors where it deems the data to
be not representative of a company’s current business operations. In such cases,
or where data on specific companies may not be available from third-party
vendors, the Investment Adviser may make reasonable estimates or otherwise
exercise its discretion. The Fund’s ESG criteria may be updated periodically to,
among other things, add or remove certain industries or product lines from the
screening process, revise the revenue thresholds and categorical exclusions
applicable to such activities, or change particular industries or product lines
from a categorical exclusion to a revenue threshold, or vice versa. The
Investment Adviser may periodically review portfolio holdings against the Fund’s
ESG criteria.
Once the
Investment Adviser determines that an issuer meets the Fund’s ESG criteria, the
Investment Adviser conducts a supplemental analysis of individual companies’
corporate governance factors and a range of environmental and social factors
that may vary by sector. This supplemental analysis will be conducted alongside
traditional fundamental, bottom-up financial analysis of individual companies,
using traditional fundamental metrics.
These
corporate governance considerations may include:
◼
quality of
earnings;
◼
concern for
shareholder interests and minority shareholder rights;
◼
unethical
business conduct, for example unethical methods of obtaining contracts and/or
close connections with authorities;
◼
board
structure;
◼
board
diversity;
◼
executive
management team, for example CEO/CFO effectiveness and acting in interest of
shareholders; and
13
◼
executive
compensation.
Environmental
and social considerations may include:
◼
environmental
and social reporting, disclosure and transparency;
◼
material
environmental litigation and/or controversies;
◼
material
social litigation and/or controversies;
◼
labor
practices, for example track record in treatment of employees and supply chain
management;
◼
human
rights considerations; and
◼
climate
change policies and environmental practices.
The
Investment Adviser may engage in active dialogues with company management teams
to further inform investment decision-making and to foster best corporate
governance practices using its fundamental and ESG analysis. The Fund may invest
in a company prior to completion of the supplemental analysis or without
engaging with company management. Instances in which the supplemental analysis
may not be completed prior to investment include but are not limited to IPOs,
in-kind transfers, corporate actions, and/or certain short-term
holdings.
The
Investment Adviser may sell holdings for several reasons, including, among
others, changes in a company’s fundamentals or earnings, a company no longer
meeting the Fund’s ESG criteria, or a company otherwise failing to conform to
the Investment Adviser’s investment philosophy.
The Fund
may allocate its assets among countries as determined by the Investment Adviser
from time to time provided that the Fund’s assets are economically tied to at
least three foreign countries. The Fund expects to invest a substantial portion
of its assets in the securities of issuers economically tied to the developed
countries of Western Europe and in Australia, Japan and New Zealand. In
addition, the Fund may also invest in the securities of issuers located in
emerging market countries. Emerging market countries are generally located in
Africa, Asia, the Middle East, Eastern Europe and Central and South
America.
The Fund
may also invest up to 20% of its Net Assets in equity investments that may not
adhere to the Fund’s ESG criteria and in fixed income securities, such as
government, corporate and bank debt obligations. The Fund may also invest in
stock, warrants, and other securities of special purpose acquisition companies
(“SPACs”) or similar special purpose entities that pool funds to seek potential
acquisition opportunities.
International Equity
Income Fund
The Fund
seeks to achieve long-term capital appreciation and growth of income by
investing in the stocks of companies within developed and emerging countries
around the world, outside of the United States. The Fund invests, under normal
circumstances, at least 80% of its Net Assets in a diversified portfolio of
equity investments of dividend-paying non-U.S. issuers. Such equity investments
may include ETFs, futures and other instruments with similar economic exposures.
Shareholders will be provided with sixty days’ notice in the manner prescribed
by the SEC before any change in the Fund’s policy to invest at least 80% of its
Net Assets in the particular type of investment suggested by its name. The Fund
intends to have investments economically tied to at least three countries, not
including the United States, and may invest in the securities of issuers in
emerging market countries.
The Fund
may allocate its assets among countries as determined by the Investment Adviser
provided that the Fund’s assets are economically tied to at least three foreign
countries. The Fund expects to invest a substantial portion of its assets in the
securities of issuers economically tied to the developed countries of Western
Europe and in Australia, Japan and New Zealand. In addition, the Fund may also
invest in the securities of issuers located in emerging countries. Emerging
countries are generally located in Africa, Asia, the Middle East, Eastern Europe
and Central and South America.
The Fund
may also invest up to 20% of its Net Assets in fixed income securities, such as
government, corporate and bank debt obligations. The Fund may also invest in
stock, warrants, and other securities of SPACs or similar special purpose
entities that pool funds to seek potential acquisition
opportunities.
The Fund
seeks to generate additional cash flow and may reduce volatility by the sale of
call options on the MSCI EAFE Index or other national or regional stock market
indices (or related ETFs).
The Fund
can, from time to time, sell call options in an amount up to 5% of the value of
the Fund’s portfolio. As the seller of the call options, the Fund will receive
cash (the “premium”) from the purchaser. Depending upon the type of index call
option, the purchaser of a call option either (i) has the right to any
appreciation in the value of the index over a fixed price (the “exercise price”)
on a certain date in the future (the “expiration date”) or (ii) has the right to
any appreciation in the value of the index over the exercise price at any time
prior to the expiration of the option. If the purchaser does not exercise the
option, the Fund retains the premium and makes no payments to the purchaser. If
the purchaser exercises the option, the Fund pays the purchaser the difference
between the price of the
14
Investment
Management Approach
index and
the exercise price of the option. The premium, the exercise price and the market
price of the index determine the gain or loss realized by the Fund as the seller
of the call option. The Fund can also repurchase the call option prior to the
expiration date, ending its obligation. In this case, the cost of entering into
closing purchase transactions will determine the gain or loss realized by the
Fund.
During
periods in which the equity markets are generally unchanged or falling, a
diversified portfolio with a call option writing strategy may outperform the
same portfolio without the options because of the premiums received from writing
call options. Similarly, in a modestly rising market (where the income from
premiums exceeds the aggregate appreciation of the underlying index over its
exercise price) such a portfolio may outperform the same portfolio without the
options. However, in other rising markets (where the aggregate appreciation of
the underlying index over its exercise price exceeds the income from premiums),
a portfolio with a call writing strategy could significantly underperform the
same portfolio without the options.
The returns
from the options strategy will generally be characterized as short-term capital
gains or losses. These will be aggregated with realized capital gains and losses
from the remainder of the Fund’s portfolio to determine the Fund’s net capital
gain or loss. The Fund generally will not make a distribution of capital gain
unless it ends the year with an overall net capital gain. This means that it is
possible the Fund will make no distribution of capital gains in some years even
if the options strategy, by itself, generated a gain. If these gains were more
than offset by losses from stock transactions, then the gain from the options
strategy will remain in the Fund, and add to the Fund’s net asset value, but
will not be distributed in that year. See “Taxation—Distributions” below. It is
anticipated that the calls will typically be written against the MSCI EAFE Index
(or against ETFs linked to the MSCI EAFE Index) or against other national or
regional stock market indices. The goal of the call writing strategy is to
generate an amount of premium that, when annualized and added to the Fund’s
expected dividend yield, provides an attractive level of cash flow. Call
writing, however, entails certain risks. For more information, see “Risks of the
Funds” and “Appendix A—Other Portfolio Risks—Risks of Writing Index Call
Options.”
The
Investment Adviser anticipates generally using index call options with
expirations of one month or less. Outstanding call options will be rolled
forward upon expiration, so that there will generally be some options
outstanding.
All
Funds
In
determining whether an issuer is economically tied to a country other than the
United States, the Investment Adviser will consider whether the
issuer:
◼
Has a class
of securities whose principal securities market is in a country other than the
United States;
◼
Has its
principal office in a country other than the United States;
◼
Derives 50%
or more of its total revenue or profit from goods produced, sales made or
services provided in one or more countries other than the United
States;
◼
Maintains
50% or more of its assets in one or more countries other than the United States;
or
◼
Is
otherwise determined to be economically tied to a country other than the United
States by the Investment Adviser in its discretion. For example, the Investment
Adviser may use the classifications assigned by third parties, including an
issuer’s “country of risk” as determined by Bloomberg or the classifications
assigned to an issuer by a Fund’s benchmark index provider. These
classifications are generally based on a number of criteria, including an
issuer’s country of domicile, the primary stock exchange on which an issuer’s
securities trade, the location from which the majority of an issuer’s revenue is
derived, and an issuer’s reporting currency. Although the Investment Adviser may
rely on these classifications, it is not required to do so.
Each Fund’s
performance benchmark index is the MSCI EAFE Index (Net, USD, Unhedged). The
MSCI EAFE Index (Net, USD, Unhedged) is a free float-adjusted market
capitalization index that is designed to measure the equity market performance
of developed markets, excluding the US and Canada. The MSCI EAFE Index (Net,
USD, Unhedged) consists of the following 21 developed market country indices as
of the date of the Prospectus: Australia, Austria, Belgium, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United
Kingdom. The MSCI EAFE Index (Net, USD, Unhedged) approximates the minimum
possible dividend reinvestment. The dividend is reinvested after deduction for
withholding tax, applying the rate to non-resident individuals who do not
benefit from double taxation treaties. The MSCI EAFE Index (Net, USD, Unhedged)
does not reflect any deductions of expenses associated with mutual funds such as
management fees and other expenses.
The Funds
may, from time to time, take temporary defensive positions that are inconsistent
with the Funds’ principal investment strategies in attempting to respond to
adverse market, political or other conditions. For temporary defensive purposes,
each Fund may invest up to 100% of its total assets in securities issued or
guaranteed by the U.S. government, its agencies, instrumentalities or sponsored
enterprises (“U.S. Government Securities”), commercial paper rated at least A-2
by S&P Global Ratings (“Standard & Poor’s”), P-2 by Moody’s Investors
Service, Inc. (“Moody’s”) or having a comparable credit rating by another
nationally recognized statistical rating organization (“NRSRO”) (or if unrated,
determined by the Investment Adviser to be of comparable credit quality),
certificates of deposit, bankers’ acceptances, repurchase agreements,
non-convertible preferred stocks and non-convertible corporate bonds with a
remaining maturity of less than one year, ETFs and other investment companies
and cash items. When
a Fund’s assets are invested in such instruments, the Fund may not be achieving
its investment objective.
15
GSAM Fundamental
International Equity Team’s Philosophy (All Funds):
|
Belief |
How
the Investment Adviser Acts on This Belief |
|
Excess
returns may be generated by conducting thorough fundamental
research
and individual stock selection |
Seeks
to generate excess returns through an intensive research culture,
which
includes regular conversations with existing and potential investee
companies’
executives and their competitors, suppliers and
clients. |
|
A
team-based approach enriches debate and enhances the quality of
investment
decisions |
Conducts
stock level research in a team-orientated structure with frequent
and
open communication. |
|
Focused
and differentiated portfolios provide potential to generate excess
returns |
Builds
portfolios that are reflective of the team’s most compelling investment
ideas
so that the majority of excess returns is driven by stock
selection. |
The GSAM
Fundamental International Equity Team’s investment philosophy is grounded in the
belief that we can achieve a competitive edge through selecting stocks. We seek
to discover a broad range of investment ideas while being flexible, nimble and
avoiding complacency. We believe a company’s prospective ability to generate
high returns on invested capital will strongly influence investment success. In
our view, using a strong valuation discipline to purchase well-positioned,
cash-generating businesses run by shareholder-oriented management teams is a
compelling formula for long-term portfolio performance.
From a
valuation perspective, the Investment Adviser generally looks for companies
where the Investment Adviser’s estimate of their earnings, asset value or cash
flow is meaningfully different from consensus; or where the Investment Adviser
believes a company’s intrinsic value is not reflected in the share price. Within
the valuation framework, the Investment Adviser actively searches for companies
that it believes can produce above average returns over the full market cycle.
As such, the Investment Adviser generally seeks companies that exhibit strong
corporate governance, such that minority shareholders may benefit from
returns.
The GSAM
Fundamental International Equity team may integrate ESG factors alongside
traditional fundamental factors as part of its fundamental research process to
seek to assess overall business quality and valuation, as well as potential
risks. Traditional fundamental factors that the GSAM Fundamental International
Equity team may consider include, but are not limited to, cash flows, balance
sheet leverage, return on invested capital, industry dynamics, earnings quality
and profitability. ESG factors that the GSAM Fundamental International Equity
team may consider include, but are not limited to, carbon intensity and
emissions profiles, workplace health and safety, community impact, governance
practices and stakeholder relations, employee relations, board structure,
transparency and management incentives. The identification of a risk related to
an ESG factor will not necessarily exclude a particular security or sector that,
in the GSAM Fundamental International Equity team’s view, is otherwise suitable
and attractively priced for investment, and the GSAM Fundamental International
Equity team may invest in a security or sector without integrating ESG factors
or considerations into its fundamental investment process. The relevance of
specific traditional fundamental factors and ESG factors to the fundamental
investment process varies across asset classes, sectors and strategies. The GSAM
Fundamental International Equity team may utilize data sources provided by
third-party vendors and/or engage directly with issuers when assessing the above
factors.
The GSAM
Fundamental International Equity team employs a fundamental investment process
that considers a wide range of factors, and no one factor or consideration is
determinative.
As
stakeholders, the Funds have a vested interest in helping the companies in which
they invest unlock value by improving corporate practices and being thoughtful
stewards of capital. As part of its focus on long-term, active ownership, the
Investment Adviser may, in certain circumstances, use proxy voting and
engagement as some of the tools available to encourage positive corporate
decision making and productive change, where possible.
References
in the Prospectus to a Fund’s benchmark are for informational purposes only, and
unless otherwise noted, are not an indication of how a particular Fund is
managed.
GSAM Fundamental
International Equity Team’s Additional Investment Philosophy (International
Equity ESG Fund):
|
Belief |
How
the Investment Adviser Acts on This Belief |
|
◼ Companies
that employ sustainable
practices
and adhere to ESG principles can be
more
responsive and adaptive to change,
better
preserve competitive advantages and
maintain
financial resiliency |
Seeks
to identify sound companies by conducting proprietary ESG research and
bottom-up company analysis. |
|
ADDITIONAL
FEES AND EXPENSES INFORMATION |
Differences
in the “Expense Limitation” ratios across a Fund’s share classes are the result
of, among other things, the effect of mathematical rounding on the daily accrual
of expense reimbursement, particularly, in respect to share classes with small
amounts of assets.
16
Investment
Management Approach
Differences
in the “Other Expenses” ratios across a Fund’s share classes are the result of,
among other things, contractual differences in transfer agency fees and/or the
effect of mathematical rounding on the daily accrual of certain expenses,
particularly, in respect to share classes with small amounts of
assets.
|
ADDITIONAL
PERFORMANCE INFORMATION |
The below
is additional information that relates to the “Performance” section of each
Fund’s summary section.
Note that
the “Best Quarter” and “Worst Quarter” figures shown in the “Performance”
section of each Fund’s Summary section are applicable only to the time period
covered by the bar chart.
The
definitions below apply to the after-tax returns shown in the “Performance”
section of each Fund’s Summary section.
Average
Annual Total Returns Before Taxes. These
returns do not reflect taxes on distributions on a Fund’s Shares nor do they
show how performance can be impacted by taxes when shares are redeemed (sold) by
you.
Average
Annual Total Returns After Taxes on Distributions. These
returns assume that taxes are paid on distributions on a Fund’s Class A Shares
(i.e., dividends
and capital gains) but do not reflect taxes that may be incurred upon redemption
(sale) of the Class A Shares at the end of the performance
period.
Average
Annual Total Returns After Taxes on Distributions and Sale of Fund Shares.
These
returns reflect taxes paid on distributions on a Fund’s Class A Shares and taxes
applicable when the shares are redeemed (sold).
Note
on Tax Rates. The
after-tax performance figures are calculated using the historically highest
individual federal marginal income tax rates at the time of the distributions
and do not reflect state and local taxes. In calculating the federal income
taxes due on redemptions, capital gains taxes resulting from a redemption are
subtracted from the redemption proceeds and the tax benefits from capital losses
resulting from the redemption are added to the redemption proceeds. Under
certain circumstances, the addition of the tax benefits from capital losses
resulting from redemptions may cause the Returns After Taxes on Distributions
and Sale of Fund Shares to be greater than the Returns After Taxes on
Distributions or even the Returns Before Taxes.
|
OTHER
INVESTMENT PRACTICES AND
SECURITIES |
Although
each Fund’s principal investment strategies are described in the Fund’s
Summary—Principal Strategy section of the Prospectus, the following tables
identify some of the investment techniques that may (but are not required to) be
used by the Funds in seeking to achieve their investment objectives. The tables
also highlight the differences and similarities among the Funds in their use of
these techniques and other investment practices and investment securities.
Numbers in these tables show allowable usage only; for actual usage, consult the
Funds’ annual/semi-annual reports. For more information about these and other
investment practices and securities, see Appendix A.
Each Fund
publishes on its website (http://www.gsamfunds.com) complete portfolio holdings
for the Fund as of the end of each calendar quarter subject to a fifteen
calendar-day lag between the date of the information and the date on which the
information is disclosed. In addition, the Funds publish on their website
month-end top ten holdings subject to a fifteen calendar-day lag between the
date of the information and the date on which the information is disclosed. In
addition, a description of the Funds’ policies and procedures with respect to
the disclosure of the Funds’ portfolio holdings is available in the Funds’
SAI.
17
|
10 Percent
of total assets (including securities lending collateral) (italic
type)
10 Percent
of net assets (excluding borrowings for investment purposes) (roman
type)
• No
specific percentage limitation on usage; limited only by the objectives
and strategies of the Fund |
International
Equity
ESG
Fund |
International
Equity
Income
Fund |
|
Investment
Practices |
|
|
|
Borrowings
|
33 1∕3 |
33 1∕3 |
|
Cross
Hedging of Currencies |
• |
• |
|
Custodial
Receipts and Trust Certificates |
• |
• |
|
Equity,
Index and Currency Swaps |
• |
• |
|
Foreign
Currency Transactions (including forward contracts) |
• |
• |
|
Futures
Contracts and Options and Swaps on Futures Contracts |
• |
• |
|
Illiquid
Investments* |
15 |
15 |
|
Initial
Public Offerings (“IPOs”) |
• |
• |
|
Investment
Company Securities (including ETFs)** |
10 |
10 |
|
Options
on Foreign Currencies1
|
• |
• |
|
Options2
|
• |
• |
|
Preferred
Stock, Warrants and Stock Purchase Rights |
• |
• |
|
Repurchase
Agreements |
• |
• |
|
Securities
Lending |
33 1∕3 |
33 1∕3 |
|
Unseasoned
Companies |
• |
• |
|
When-Issued
Securities and Forward Commitments |
• |
• |
*
Illiquid
investments are any investments that a Fund reasonably expects cannot be sold or
disposed of in current market conditions in seven calendar days or less without
the sale or disposition significantly changing the market value of the
investment.
**
This
percentage limitation does not apply to a Fund’s investments in investment
companies (including ETFs) where a higher percentage limitation is permitted
under the Investment Company Act or rules, regulations or exemptive relief
thereunder.
1
The
Funds may purchase and sell call and put options on foreign
currencies.
2
The
Funds may sell call and put options and purchase call and put options on
securities and securities indices in which they may invest.
18
Investment
Management Approach
|
10 Percent
of total assets (italic type)
10 Percent
of net assets (including borrowings for investment purposes) (roman
type)
• No
specific percentage limitation on usage; limited only by the objectives
and strategies of the Fund |
International
Equity
ESG
Fund |
International
Equity
Income
Fund |
|
Investment
Securities |
|
|
|
Asset-Backed
and Mortgage-Backed Securities1
|
• |
• |
|
Bank
Obligations1,2
|
• |
• |
|
Convertible
Securities |
• |
• |
|
Corporate
Debt Obligations1
|
• |
• |
|
Depositary
Receipts |
• |
• |
|
Emerging
Country Securities |
• |
• |
|
Equity
Investments |
80+ |
80+ |
|
Fixed
Income Securities |
20 |
20 |
|
Foreign
Government Securities1
|
• |
• |
|
Foreign
Securities |
• |
• |
|
Non-Investment
Grade Fixed Income Securities1,3
|
20 |
20 |
|
Private
Investments in Public Equity (“PIPEs”) |
• |
• |
|
Real
Estate Investment Trusts |
• |
• |
|
Special
Purpose Acquisition Companies (“SPACs”) |
• |
• |
|
Structured
Securities (which may include equity linked notes) |
• |
• |
|
Temporary
Investments |
• |
• |
|
U.S.
Government Securities1
|
• |
• |
1
Limited
by the amount the Fund invests in fixed income securities.
2
Issued
by U.S. or foreign banks.
3
May
be BB+ or lower by Standard & Poor’s, Ba1 or lower by Moody’s or have a
comparable credit rating by another NRSRO at the time of
investment.
19
Risks of
the Funds
Loss of
money is a risk of investing in the Fund (which, for the remainder of this
Prospectus, refers to one or more of the Funds offered in this Prospectus). An
investment in the Fund is not a bank deposit and is not insured or guaranteed by
the FDIC or any other governmental agency. The principal risks of the Fund are
discussed in the Summary sections of the Prospectus. The following section
provides additional information on the risks that apply to the Fund, which may
result in a loss of your investment. The risks applicable to the Fund are
presented below in alphabetical order, and not in the order of importance or
potential exposure. The Fund should not be relied upon as a complete investment
program. There can be no assurance that the Fund will achieve its investment
objective.
|
✓ Principal
• Non-Principal |
International
Equity
ESG |
International
Equity
Income |
|
Credit/Default
|
• |
• |
|
Cybersecurity |
• |
• |
|
Derivatives
|
• |
• |
|
Dividend-Paying
Investments |
|
✓ |
|
Emerging
Countries
|
✓ |
✓ |
|
ESG
Integration |
|
• |
|
ESG
Standards |
✓ |
|
|
Foreign
|
✓ |
✓ |
|
Foreign
Custody |
✓ |
✓ |
|
Geographic
|
• |
• |
|
Interest
Rate
|
• |
• |
|
Investment
Style |
• |
• |
|
IPO |
• |
• |
|
Issuer
Concentration |
✓ |
✓ |
|
Large
Shareholder Transactions
|
✓ |
✓ |
|
Liquidity
|
• |
• |
|
Management
|
• |
• |
|
Market
|
✓ |
✓ |
|
Mid-Cap
and Small-Cap |
• |
• |
|
Net
Asset Value (“NAV”) |
• |
• |
|
Non-Investment
Grade Fixed Income Securities
|
• |
• |
|
Option
Writing |
|
• |
|
Private
Investments in Public Equity (“PIPEs”) |
• |
• |
|
Sector |
✓ |
✓ |
|
Special
Purpose Acquisition Companies (“SPACs”) |
• |
• |
|
Stock |
✓ |
✓ |
◼
Credit/Default
Risk—An issuer
or guarantor of fixed income securities or instruments held by the Fund (which
may have low credit ratings) may default on its obligation to pay interest and
repay principal or default on any other obligation. The credit quality of the
Fund’s portfolio securities or instruments may meet the Fund’s credit quality
requirements at the time of purchase but then deteriorate thereafter, and such a
deterioration can occur rapidly. In certain instances, the downgrading or
default of a single holding or guarantor of the Fund’s holdings may impair the
Fund’s liquidity and have the potential to cause significant deterioration in
NAV. These risks are heightened in market environments where interest rates are
rising as well as in connection with the Fund’s investments in non-investment
grade fixed-income securities.
◼
Cybersecurity
Risk—The Fund
may be susceptible to operational and information security risks resulting from
cyber-attacks. Cyber-attacks include, among others, stealing or corrupting
confidential information and other data that is maintained online or digitally
for financial gain, denial-of-service attacks on websites causing operational
disruption, and the unauthorized release of confidential information and other
data. Cyber-attacks have the ability to cause significant disruptions and impact
business operations; to result in financial losses; to prevent shareholders from
transacting business; to interfere with the Fund’s calculation of NAV; and to
lead to violations of applicable privacy and other laws, regulatory fines,
penalties, reputational damage, reimbursement or other compensation costs and/or
additional compliance costs. Cyber-attacks affecting the Fund or its Investment
Adviser, custodian, Transfer Agent, or other third-party service providers may
adversely impact the Fund and its shareholders.
◼
Derivatives
Risk—The Fund’s
use of options, futures, forwards, swaps, options on swaps, structured
securities and other derivatives and similar instruments (collectively referred
to in this paragraph as “derivatives”) may result in losses, including due to
20
Risks
of the Funds
adverse
market movements. Derivatives, which may pose risks in addition to and greater
than those associated with investing directly in securities, currencies or other
instruments, may increase market exposure and be illiquid or less liquid,
volatile, difficult to price and leveraged so that small changes in the value of
the underlying assets or instruments may produce disproportionate losses to the
Fund. Certain derivatives are also subject to counterparty risk, which is the
risk that the other party in the transaction will not fulfill, or lacks the
capacity or authority to fulfill, its contractual obligations, liquidity risk,
which includes the risk that the Fund will not be able to close its derivatives
position when it is advantageous to do so, and risks arising from margin
requirements, which include the risk that the Fund will be required to pay
additional margin or set aside additional collateral to maintain open derivative
positions. Derivatives may be used for both hedging and non-hedging
purposes.
The use of
derivatives is a highly specialized activity that involves investment techniques
and risks different from those associated with investments in more traditional
securities and instruments, and there is no guarantee that the use of
derivatives will achieve their intended result. If the Investment Adviser is
incorrect in its expectation of the timing or level of fluctuation in securities
prices, interest rates, currency prices or other variables, the use of
derivatives could result in losses, which in some cases may be significant. A
lack of correlation between changes in the value of derivatives and the value of
the portfolio assets (if any) being hedged could also result in losses. In
addition, there is a risk that the performance of the derivatives or other
instruments used by the Investment Adviser to replicate the performance of a
particular asset class may not accurately track the performance of that asset
class. Derivatives are also subject to liquidity risk and risks arising from
margin requirements. There is also risk of loss if the Investment Adviser is
incorrect in its expectation of the timing or level of fluctuation in securities
prices, interest rates, currency prices or other variables.
The use of
derivatives is also subject to operational and legal risks. Operational risks
generally refer to risks related to potential operational issues, including
documentation issues, settlement issues, system failures, inadequate controls,
and human error. Legal risks generally refer to risks of loss resulting from
insufficient documentation or legality or enforceability of a
contract.
◼
Dividend-Paying
Investments Risk—The Fund’s
investments in dividend-paying securities could cause the Fund to underperform
other funds that invest in similar asset classes but employ a different
investment style. Securities that pay dividends, as a group, can fall out of
favor with the market, causing such securities to underperform securities that
do not pay dividends. Depending upon market conditions and political and
legislative responses to such conditions, dividend-paying securities that meet
the Fund’s investment criteria may not be widely available and/or may be highly
concentrated in only a few market sectors. For example, in response to the
outbreak of a novel strain of coronavirus (known as COVID-19), the U.S.
Government passed the Coronavirus Aid, Relief and Economic Security Act in March
2020, which established loan programs for certain issuers impacted by COVID-19.
Among other conditions, borrowers under these loan programs are generally
restricted from paying dividends. The adoption of new legislation could further
limit or restrict the ability of issuers to pay dividends. To the extent that
dividend-paying securities are concentrated in only a few market sectors, the
Fund may be subject to the risks of volatile economic cycles and/or conditions
or developments that may be particular to a sector to a greater extent than if
its investments were diversified across different sectors. In addition, issuers
that have paid regular dividends or distributions to shareholders may not
continue to do so at the same level or at all in the future. A sharp rise in
interest rates or an economic downturn could cause an issuer to abruptly reduce
or eliminate its dividend. This may limit the ability of the Fund to produce
current income.
◼
Emerging
Countries Risk—Investments
in securities of issuers located in, or otherwise economically tied to, emerging
countries are subject to the risks associated with investments in foreign
securities. The securities markets of most emerging countries are less liquid,
developed and efficient, are subject to greater price volatility, and have
smaller market capitalizations. In addition, emerging markets and frontier
countries may have more or less government regulation and generally do not
impose as extensive and frequent accounting, auditing, financial and other
reporting requirements as the securities markets of more developed countries. As
a result, there could be less information available about issuers in emerging
and frontier market countries, which could negatively affect the Investment
Adviser’s ability to evaluate local companies or their potential impact on the
Fund’s performance. Further, investments in securities of issuers located
in certain emerging countries involve the risk of loss resulting from
problems in share registration, settlement or custody, substantial economic,
political and social disruptions and the imposition of sanctions or exchange
controls (including repatriation restrictions). The legal remedies for investors
in emerging and frontier markets may be more limited than the remedies available
in the U.S., and the ability of U.S. authorities (e.g., SEC and
the U.S. Department of Justice) to bring actions against bad actors may be
limited. These risks are not normally associated with investments in more
developed countries. These risks may be greater for frontier markets. For
more information about these risks, see Appendix A.
◼
ESG
Integration Risk—The
Investment Adviser employs a fundamental investment process that may integrate
ESG factors with traditional fundamental factors. The relevance and
weightings of specific ESG factors to or within the fundamental investment
process varies across asset classes, sectors and strategies and no one factor or
consideration is determinative. When integrating ESG factors into the
investment process, the Investment Adviser may rely on third-party data that it
believes to be reliable, but it does not guarantee the accuracy of such
third-party data. ESG information from third-party data providers may be
incomplete, inaccurate or unavailable, which may adversely impact the investment
process. Moreover, ESG information, whether from an external and/or
internal source, is, by nature and in many instances, based on a qualitative and
subjective assessment. An element of subjectivity
21
and
discretion is therefore inherent to the interpretation and use of ESG
data. The process for conducting ESG assessments and implementation of ESG
views in client/fund portfolios, including the format and content of such
analysis and the tools and/or data used to perform such analysis, may also vary
among the Investment Adviser’s portfolio management teams. While the Investment
Adviser believes that the integration of material ESG factors into the
International Equity Income Fund’s investment process has the potential to
identify financial risks and contribute to the International Equity Income
Fund’s long-term performance, ESG factors may not be considered for each and
every investment decision, and there is no guarantee that the integration of ESG
factors will result in better performance. Investors can differ in their
views of what constitutes positive or negative ESG
characteristics. Moreover, the current lack of common standards may result
in different approaches to integrating ESG factors. As a result, the
International Equity Income Fund may invest in companies that do not reflect the
beliefs and values of any particular investor. The Investment Adviser’s
approach to ESG integration may evolve and develop over time, both due to a
refinement of investment decision-making processes to address ESG factors and
risks, and because of legal and regulatory developments.
◼
ESG
Standards Risk—The
International
Equity ESG Fund’s adherence to its ESG criteria and the application of the
Investment Adviser’s supplemental ESG analysis when selecting investments
generally will affect the Fund’s exposure to certain companies, sectors,
regions, and countries and may affect the Fund’s performance depending on
whether such investments are in or out of favor. For example, the Fund generally
will not seek to invest in companies that the Investment Adviser believes have
adverse social or environmental impacts (e.g., alcohol, tobacco, gambling, adult
entertainment, oil and gas, coal or weapons companies). Adhering to the ESG
criteria and applying the Investment Adviser’s supplemental ESG analysis may
also affect the Fund’s performance relative to similar funds that do not adhere
to such criteria or apply such analysis. Additionally, the Fund’s adherence to
the ESG criteria and the application of the supplemental ESG analysis in
connection with identifying and selecting equity investments in non-U.S. issuers
often require more subjective analysis and may be relatively more difficult than
applying the ESG criteria or the supplemental ESG analysis to equity investments
of all issuers because data availability may be more limited with respect to
non-U.S. issuers. Certain investments may be dependent on U.S. and foreign
government policies, including tax incentives and subsidies, which may change
without notice.
The
exclusionary criteria related to the Fund’s ESG criteria may result in the Fund
forgoing opportunities to buy certain securities when it might otherwise be
advantageous to do so, or selling securities for ESG reasons when it might be
otherwise disadvantageous for it to do so. The Fund’s investments in certain
companies may be susceptible to various factors that may impact their businesses
or operations, including costs associated with government budgetary constraints
that impact publicly funded projects and clean energy initiatives, the effects
of general economic conditions throughout the world, increased competition from
other providers of services, unfavorable tax laws or accounting policies and
high leverage.
Currently,
there is a lack of common industry standards relating to the development and
application of ESG criteria, which may make it difficult to compare the Fund’s
principal investment strategies with the investment strategies of other funds
that integrate certain ESG criteria. Although the Fund intends to invest in
issuers that the Investment Adviser believes adhere to the Fund’s ESG criteria,
the subjective value that investors may assign to certain types of ESG criteria
may differ substantially from that of the Fund. Investors can differ in their
views of what constitutes positive or negative ESG characteristics. As a result,
the Fund may invest in companies that do not reflect the beliefs and values of
any particular investor. In addition, the application of the Investment
Adviser’s supplemental ESG analysis may differ by asset class, sector, country
and region, and an issuer’s ESG practices may change over time. When assessing
whether an issuer meets the Fund’s ESG criteria and conducting an ESG analysis
of an issuer, the Investment Adviser generally will rely on third-party data
that it believes to be reliable, but it does not guarantee the accuracy of such
third-party data. ESG information from third-party data providers may be
incomplete, inaccurate or unavailable and may vary significantly from one
third-party data provider to another, which may adversely impact the investment
process. The Fund’s ESG criteria and the application of the supplemental ESG
analysis may be changed without shareholder approval.
◼
Foreign
Risk—When the
Fund invests in foreign securities, it may be subject to risk of loss not
typically associated with U.S. issuers. Loss may result because of more or less
foreign government regulation; less public information; less stringent investor
protections; less stringent accounting, corporate governance, financial
reporting and disclosure standards; less liquid, developed or efficient trading
markets, greater volatility and less economic, political and social stability in
the countries in which the Fund invests. Loss may also result from, among other
things, deteriorating economic and business conditions in other countries,
including the United States, regional and global conflicts, the imposition of
sanctions, exchange controls (including repatriation restrictions), foreign
taxes, confiscation of assets and property, trade restrictions (including
tariffs), expropriations and other government restrictions by the United States
and other governments, higher transaction costs, difficulty enforcing
contractual obligations or from problems in share registration, settlement or
custody. The type and severity of sanctions and other similar measures,
including counter sanctions and other retaliatory actions, that may be imposed
could vary broadly in scope, and their impact is impossible to predict. These
types of measures may include, but are not limited to, banning a sanctioned
country from global payment systems that facilitate cross-border payments,
restricting the settlement of securities transactions by certain investors, and
freezing the assets of particular countries, entities, or persons. The
imposition of sanctions and other similar measures could, among other things,
cause a decline in the value and/or liquidity of securities issued by the
sanctioned country or companies located in or economically tied to the
sanctioned country, downgrades in the credit ratings of the sanctioned country
or
22
Risks
of the Funds
companies
located in or economically tied to the sanctioned country, devaluation of the
sanctioned country’s currency, and increased market volatility and disruption in
the sanctioned country and throughout the world. Sanctions and other similar
measures could limit or prevent the Fund from buying and selling securities (in
the sanctioned country and other markets), significantly delay or prevent the
settlement of securities transactions, and significantly impact the Fund’s
liquidity and performance. The Fund or the Investment Adviser may determine not
to invest in, or may limit its overall investment in, a particular issuer,
country or geographic region due to, among other things, heightened risks
regarding sanctions, repatriation restrictions, confiscation of assets and
property, expropriation or nationalization. Geopolitical developments in certain
countries in which the Fund may invest have caused, or may in the future cause,
significant volatility in financial markets. These and other geopolitical
developments, including ongoing regional armed conflict in Europe and elsewhere,
could negatively impact the value of the Fund’s investments.
The Fund
will also be subject to the risk of negative foreign currency rate fluctuations,
which may cause the value of securities denominated in such foreign currency (or
other instruments through which the Fund has exposure to foreign currencies) to
decline in value. Currency exchange rates may fluctuate significantly over short
periods of time. Foreign risks will normally be greatest when the Fund invests
in securities of issuers located in emerging countries. For more information
about these risks, see Appendix A.
◼
Foreign
Custody Risk—The Fund
may hold foreign securities and cash with foreign banks, agents, and securities
depositories appointed by the Fund’s custodian (each a “Foreign Custodian”).
Some Foreign Custodians may be recently organized or new to the foreign custody
business. In some countries, Foreign Custodians may be subject to little or no
regulatory oversight over or independent evaluation of their operations.
Further, the laws of certain countries may place limitations on the Fund’s
ability to recover its assets if a Foreign Custodian enters bankruptcy.
Investments in emerging markets may be subject to even greater custody risks
than investments in more developed markets. Custody services in emerging market
countries are very often underdeveloped and may be considerably less well
regulated than in more developed countries, and thus may not afford the same
level of investor protection as would apply in developed
countries.
◼
Geographic
Risk—If
the Fund focuses its investments in securities of issuers located in a
particular country or geographic region, the Fund may be subjected,
to a greater extent than if its investments were less focused, to the risks of
volatile economic cycles and/or conditions and developments that may be
particular to that country or region, such as: adverse securities markets;
adverse exchange rates; adverse social, political, regulatory, economic,
business, environmental or other developments; or natural
disasters.
◼
Interest
Rate Risk—When
interest rates increase, fixed income securities or instruments held by the Fund
(which may include inflation protected securities) will generally decline in
value. Long-term fixed income securities or instruments will normally have more
price volatility because of this risk than short-term fixed income securities or
instruments. A wide variety of market factors can cause interest rates to rise,
including central bank monetary policy, rising inflation and changes in general
economic conditions. Changing interest rates may have unpredictable effects on
the markets, may result in heightened market volatility and may detract from
Fund performance to the extent the Fund is exposed to such interest rates and/or
volatility. In addition, changes in monetary policy may exacerbate the risks
associated with changing interest rates. Funds with longer average portfolio
durations will generally be more sensitive to changes in interest rates than
funds with a shorter average portfolio duration. Fluctuations in interest rates
may also affect the liquidity of fixed income securities and instruments held by
the Fund.
It is
difficult to predict the magnitude, timing or direction of interest rate changes
and the impact these changes will have on the markets in which the Fund
invests.
◼
Investment
Style Risk —Different
investment styles (e.g., “growth,”
“value” or “quantitative”) tend to shift in and out of favor depending upon
market and economic conditions and investor sentiment. The Fund may outperform
or underperform other funds that invest in similar asset classes but employ
different investment styles. Examples of different investment styles include
growth and value investing. Growth stocks may be more volatile than other stocks
because they are more sensitive to investor perceptions of the issuing company’s
growth of earnings potential. Growth companies are often expected by investors
to increase their earnings at a certain rate. When these expectations are not
met, investors can punish the stocks inordinately even if earnings showed an
absolute increase. Also, because growth companies usually invest a high portion
of earnings in their business, growth stocks may lack the dividends of some
value stocks that can cushion stock prices in a falling market. Growth oriented
funds will typically underperform when value investing is in favor. Value stocks
are those that are undervalued in comparison to their peers due to adverse
business developments or other factors.
◼
IPO
Risk—The market
value of shares issued in an IPO may fluctuate considerably due to factors such
as the absence of a prior public market, unseasoned trading, the small number of
shares available for trading and limited information about a company’s business
model, quality of management, earnings growth potential, and other criteria used
to evaluate its investment prospects. The purchase of IPO shares may involve
high transaction costs. Investments in IPO shares, which are subject to market
risk and liquidity risk, involve greater risks than investments in shares of
companies that have traded publicly on an exchange for extended periods of
time.
23
◼
Issuer
Concentration Risk—Under
normal circumstances, the Fund intends to invest in up to approximately 50
companies. As a result of the relatively small number of issuers in which the
Fund generally invests, they may be subject to greater risks than a fund that
invests in a greater number of issuers. A change in the value of any single
investment held by the Fund may affect the overall value of the Fund more than
it would affect a mutual fund that holds more investments. In particular, the
Fund may be more susceptible to adverse developments affecting any single issuer
in the Fund and may be susceptible to greater losses because of these
developments.
◼
Large
Shareholder Transactions Risk—The Fund
may experience adverse effects when certain large shareholders, such as other
funds, institutional investors (including those trading by use of
non-discretionary mathematical formulas), financial intermediaries (who may make
investment decisions on behalf of underlying clients and/or include the Fund in
their investment model), individuals, accounts and Goldman Sachs affiliates,
purchase or redeem large amounts of shares of the Fund. Such large shareholder
redemptions, which may occur rapidly or unexpectedly, may cause the Fund to sell
portfolio securities at times when it would not otherwise do so, which may
negatively impact the Fund’s NAV and liquidity. Similarly, large Fund share
purchases may adversely affect the Fund’s performance to the extent that the
Fund is delayed in investing new cash or otherwise maintains a larger cash
position than it ordinarily would. These transactions may also accelerate the
realization of taxable income to shareholders if such sales of investments
resulted in gains, and may also increase transaction costs. In addition, a large
redemption could result in the Fund’s current expenses being allocated over a
smaller asset base, leading to an increase in the Fund’s expense
ratio.
◼
Liquidity
Risk—The Fund
may invest in securities or instruments that trade in lower volumes, that are
less liquid than other investments and/or that may become illiquid or less
liquid in response to market developments or adverse investor perceptions.
Investments that are illiquid or that trade in lower volumes may be more
difficult to value and more difficult to sell at the desired times and prices.
When there is no willing buyer and investments cannot be readily sold at the
desired time or price, the Fund may have to accept a lower price or may not be
able to sell the security or instrument at all. An inability to sell one or more
portfolio positions can adversely affect the Fund’s value or prevent the Fund
from being able to take advantage of other investment
opportunities.
Illiquidity
can be caused by a drop in overall market trading volume, an inability to find a
willing buyer, or legal restrictions on the securities’ resale. In addition,
during certain periods, the liquidity of particular issuers or industries in
which the Fund may invest, or all securities within a particular investment
category in which the Fund may invest, may shrink or disappear suddenly and
without warning as a result of adverse economic, market or political events
(including periods of rapid interest rate changes), or adverse investor
perceptions whether or not accurate. Liquidity risk is heightened during these
periods.
To the
extent that the traditional dealer counterparties that engage in fixed income
trading do not maintain inventories of bonds (which provide an important
indication of their ability to “make markets”) that keep pace with the growth of
the bond markets over time, relatively low levels of dealer inventories could
lead to decreased liquidity and increased volatility in the fixed income
markets. Additionally, market participants other than the Fund may attempt to
sell fixed income holdings at the same time as the Fund, which could cause
downward pricing pressure and contribute to decreased
liquidity.
Liquidity
risk may also refer to the risk that the Fund will not be able to pay redemption
proceeds within the allowable time period stated in the Fund’s prospectus or
without significant dilution to remaining investors’ interests because of
unusual market conditions, declining prices of the securities sold, an unusually
high volume of redemption requests or other reasons. While the Fund reserves the
right to meet redemption requests through in-kind distributions, the Fund may
instead choose to raise cash to meet redemption requests through sales of
portfolio securities or permissible borrowings. If the Fund is forced to sell
securities at an unfavorable time and/or under unfavorable conditions and
prices, such sales may adversely affect the Fund’s NAV and dilute remaining
investors’ interests.
Certain
shareholders, including clients or affiliates of the Investment Adviser and/or
other funds managed by the Investment Adviser, may from time to time own or
control a significant percentage of the Fund’s shares. Redemptions by these
shareholders of their shares of the Fund may further increase the Fund’s
liquidity risk and may impact the Fund’s NAV. These shareholders may include,
for example, institutional investors, funds of funds, discretionary advisory
clients, accounts or Goldman Sachs affiliates and other shareholders, whose
buy-sell decisions are controlled by a single decision-maker.
◼
Management
Risk—A strategy
used by the Investment Adviser may fail to produce the intended
results.
◼
Market
Risk—The value
of the securities in which the Fund invests may go up or down in response
to the prospects of individual companies, particular sectors or governments
and/or general economic conditions throughout the world. Price changes may be
temporary or last for extended periods. The Fund’s investments may be
overweighted from time to time in one or more sectors or countries, which will
increase the Fund's exposure to risk of loss from adverse developments affecting
those sectors or countries.
Global
economies and financial markets are becoming increasingly interconnected, and
conditions and events in one country, region or financial market may adversely
impact issuers in a different country, region or financial market. Furthermore,
local, regional and global events such as war, military conflict, acts of
terrorism, social unrest, natural disasters, recessions, inflation,
24
Risks
of the Funds
rapid
interest rate changes, supply chain disruptions, sanctions, the spread of
infectious illness or other public health threats could also adversely impact
issuers, markets and economies, including in ways that cannot necessarily be
foreseen. The Fund could be negatively impacted if the value of a portfolio
holding were harmed by such political or economic conditions or events. In
addition, governmental and quasi-governmental organizations have taken a number
of unprecedented actions designed to support the markets. Such conditions,
events and actions may result in greater market risk.
◼
Mid-Cap
and Small-Cap Risk—The
securities of mid-capitalization and small-capitalization companies involve
greater risks than those associated with larger, more established companies and
may be subject to more abrupt or erratic price movements. Securities of such
issuers may lack sufficient market liquidity to enable the Fund to effect sales
at an advantageous time or without a substantial drop in price. Both
mid-capitalization and small-capitalization companies often have narrower
markets and more limited managerial and financial resources than larger, more
established companies. As a result, their performance can be more volatile and
they face greater risk of business failure, which could increase the volatility
of the Fund’s portfolio. Generally, the smaller the company size, the greater
these risks become.
◼
NAV
Risk—The net
asset value of the Fund and the value of your investment will
fluctuate.
◼
Non-Investment
Grade Fixed Income Securities Risk—Non-investment
grade fixed income securities and unrated securities of comparable credit
quality (commonly known as “junk bonds”) are considered speculative and are
subject to the increased risk of an issuer’s inability to meet principal and
interest payment obligations. These securities may be subject to greater price
volatility due to such factors as specific issuer developments, interest rate
sensitivity, negative perceptions of the junk bond markets generally and less
liquidity.
◼
Option
Writing Risk—Writing
(selling) call options limits the opportunity to profit from an increase in the
market value of stocks in exchange for up-front cash at the time of selling the
call option. When the International Equity Income Fund writes (sell) MSCI EAFE
Index (or other index or related ETF) call options, it receives cash but limits
its opportunity to profit from an increase in the market value of the applicable
index beyond the exercise price (plus the premium received) of the option. In a
rising market, the International Equity Income Fund could significantly
underperform the market. The Fund’s option strategies may not fully protect them
against declines in the value of the market. Cash received from premiums will
enhance return in declining markets, but the Fund will continue to bear the risk
of a decline in the value of the securities held in its portfolio. The benefit
from writing a call option is limited to the amount of premium received. In a
period of a sharply falling equity market, the Fund will likely also experience
sharp declines in its NAV.
◼
Private
Investments in Public Equities Risk—The Fund
may purchase equity securities in a private placement that are issued by issuers
who have outstanding, publicly-traded equity securities of the same class
(“private investments in public equity” or “PIPEs”). Shares in PIPEs generally
are not registered with the SEC until after a certain time period from the date
the private sale is completed. This restricted period can last many months.
Until the public registration process is completed, PIPEs are restricted as to
resale and the Fund cannot freely trade the securities. Generally, such
restrictions cause the PIPEs to be illiquid during this time. PIPEs may contain
provisions that the issuer will pay specified financial penalties to the holder
if the issuer does not publicly register the restricted equity securities within
a specified period of time, but there is no assurance that the restricted equity
securities will be publicly registered, or that the registration will remain in
effect.
◼
Sector
Risk—To the
extent the Fund focuses its investments in securities of issuers in one or more
sectors (such as the financial services or telecommunications sectors), the Fund
will be subject, to a greater extent than if its investments were diversified
across different sectors, to the risks of volatile economic cycles and/or
conditions and developments that may be particular to that sector, such as:
adverse economic, business, political, environmental or other
developments.
◼
Special
Purpose Acquisition Companies Risk—The Fund
may invest in stock, warrants, and other securities of SPACs. A SPAC is
typically a publicly traded company that raises funds through an IPO for the
purpose of acquiring or merging with another company to be identified subsequent
to the SPAC’s IPO. Because SPACs and similar entities are in essence blank check
companies without operating history or ongoing business other than seeking
acquisitions, the value of their securities is particularly dependent on the
ability of the entity’s management to identify and complete a profitable
acquisition. An investment in a SPAC is subject to a variety of risks, including
that (i) prior to any acquisition or merger, a SPAC’s assets are typically
invested in U.S. government securities, money market funds and similar
investments whose returns or yields may be significantly lower than those of the
Fund’s other investments; (ii) the Fund generally will not receive significant
income from its investments in SPACs (both prior to and after any acquisition or
merger) and, therefore, the Fund’s investments in SPACs will not significantly
contribute to the Fund’s distributions to shareholders; (iii) attractive
acquisition or merger targets may become scarce if the number of SPACs seeking
to acquire operating businesses increases; (iv) an attractive acquisition or
merger target may not be identified at all, in which case the SPAC will be
required to return any remaining monies to shareholders (unless such
shareholders approve alternative arrangements), and the Fund may be subject to
opportunity costs to the extent that alternative investments would have produced
higher returns; (v) if an acquisition or merger target is identified, the Fund
may elect not to participate in, or vote to approve, the proposed transaction or
the Fund may be required to divest its interests in the SPAC, due to regulatory
or other considerations, in which case the Fund may not
25
reap any
resulting benefits; (vi) an acquisition or merger once effected may prove
unsuccessful and an investment in the SPAC may lose value; (vii) an investment
in a SPAC may be diluted by additional, later offerings of securities by the
SPAC or by other investors exercising existing rights to purchase securities of
the SPAC; (viii) a significant portion of the funds raised by the SPAC may be
expended during the search for a target acquisition or merger; (ix) only a
thinly traded market for shares of or interests in a SPAC may develop, or there
may be no market at all, leaving the Fund unable to sell its interest in a SPAC
or to sell its interest only at a lower price; and (x) the values of investments
in SPACs may be highly volatile and may depreciate significantly over time. In
addition, the Fund may obtain certain private rights and other interests issued
by a SPAC (commonly referred to as “founder shares”), which may be subject to
forfeiture or expire worthless and which generally have more limited liquidity
than SPAC shares issued in an IPO.
◼
Stock
Risk—Stock
prices have historically risen and fallen in periodic cycles. U.S. and
foreign stock markets have experienced periods of substantial price volatility
in the past and may do so again in the future. Stock prices may fluctuate from
time to time in response to the activities of individual companies and in
response to general market and economic conditions. Individual companies may
report poor results or be negatively affected by industry and/or economic trends
and developments, and the stock prices of such companies may suffer a decline in
response.
More
information about the Fund’s portfolio securities and investment techniques, and
its associated risks, is provided in Appendix A. You should consider the
investment risks discussed in this section and in Appendix A. Both are important
to your investment choice.
26
Service
Providers
|
INVESTMENT
ADVISER |
|
Investment
Adviser |
Fund |
|
Goldman
Sachs Asset Management, L.P. (“GSAM”)
200
West Street
New
York, NY 10282 |
International
Equity ESG
International
Equity Income |
GSAM has
been registered as an investment adviser with the SEC since 1990 and is an
indirect, wholly-owned subsidiary of The Goldman Sachs Group, Inc. and an
affiliate of Goldman Sachs. Founded in 1869, The Goldman Sachs Group, Inc. is a
publicly-held financial holding company and a leading global investment banking,
securities and investment management firm. As of December 31, 2023, GSAM,
including its investment advisory affiliates, had assets under supervision of
approximately $2.54 trillion.
The
Investment Adviser provides day-to-day advice regarding the Fund’s portfolio
transactions. The Investment Adviser makes the investment decisions for the Fund
and places purchase and sale orders for the Fund’s portfolio transactions in
U.S. and foreign markets. As permitted by applicable law, these orders may be
directed to any executing brokers, dealers, futures commission
merchants (“FCM”) or other counterparties, including Goldman Sachs and its
affiliates. While the Investment Adviser is ultimately responsible for the
management of the Fund, it is able to draw upon the research and expertise of
its asset management affiliates for portfolio decisions and management with
respect to certain portfolio securities. GSAM is responsible for the risk
management function for the Fund. In addition, the Investment Adviser has access
to the research and certain proprietary technical models developed by Goldman
Sachs (subject to legal, internal, regulatory and Chinese Wall restrictions),
and will apply quantitative and qualitative analysis in determining the
appropriate allocations among categories of issuers and types of
securities.
The
Investment Adviser also performs the following additional services for the Fund
(to the extent not performed by others pursuant to agreements with the
Fund):
◼
Supervises
all non-advisory operations of the Fund
◼
Provides
personnel to perform necessary executive, administrative and clerical services
to the Fund
◼
Arranges
for the preparation of all required tax returns, reports to shareholders,
prospectuses and statements of additional information and other reports filed
with the SEC and other regulatory authorities
◼
Maintains
the records of the Fund
◼
Provides
office space and all necessary office equipment and services
An
investment in the Fund may be negatively impacted because of the operational
risks arising from factors such as processing errors and human errors,
inadequate or failed internal or external processes, failures in systems and
technology, changes in personnel, and errors caused by third-party service
providers or trading counterparties. The use of certain investment strategies
that involve manual or additional processing, such as over-the-counter
derivatives, increases these risks. Although the Fund attempts to minimize such
failures through controls and oversight, it is not possible to identify all of
the operational risks that may affect the Fund or to develop processes and
controls that completely eliminate or mitigate the occurrence of such failures.
The Fund and its shareholders could be negatively impacted as a
result.
From time
to time, Goldman Sachs or its affiliates may invest “seed” capital in the Fund.
These investments are generally intended to enable the Fund to commence
investment operations and achieve sufficient scale. Goldman Sachs and its
affiliates may hedge the exposure of the seed capital invested in the Fund by,
among other things, taking an offsetting position in the benchmark of the
Fund.
27
|
MANAGEMENT
FEES AND OTHER EXPENSES |
As
compensation for its services and its assumption of certain expenses, the
Investment Adviser is entitled to the following fees, computed daily and payable
monthly, at the annual rates listed below (as a percentage of each respective
Fund’s average daily net assets):
|
Fund |
Contractual
Management
Fee
Annual
Rate |
Average
Daily
Net
Assets |
Actual
Rate
For
the Fiscal
Year
Ended
October
31, 2023* |
|
International
Equity ESG |
0.85%
|
First
$1 Billion
|
0.82% |
|
|
0.77%
|
Next
$1 Billion |
|
|
|
0.73%
|
Next
$3 Billion |
|
|
|
0.71%
|
Next
$3 Billion |
|
|
|
0.70% |
Over
$8 Billion |
|
|
International
Equity Income |
0.80%
|
First
$1 Billion
|
0.80% |
|
|
0.72%
|
Next
$1 Billion |
|
|
|
0.68%
|
Next
$3 Billion |
|
|
|
0.67%
|
Next
$3 Billion |
|
|
|
0.66% |
Over
$8 Billion |
|
*
The
Actual Rate may not correlate to the Contractual Management Fee Annual Rate as a
result of management fee waivers that may be in effect from time to
time.
The
Investment Adviser has agreed to waive a portion of its management fee payable
by International Equity ESG Fund in order to achieve an effective net
management fee rate of 0.82% as an annual percentage of the Fund’s average daily
net assets. This arrangement will remain in effect through at least February 28,
2025, and prior to such date, the Investment Adviser may not terminate the
arrangement without the approval of the Board of Trustees. This management fee
waiver may be modified or terminated by the Investment Adviser at its discretion
and without shareholder approval after such date, although the Investment
Adviser does not presently intend to do so.
In addition
to the management fee waiver discussed above, the Investment Adviser may waive
an additional portion of its management fee, including fees earned as the
Investment Adviser to any of the affiliated funds in which the Fund invests,
from time to time, and may discontinue or modify any such waivers in the future,
consistent with the terms of any fee waiver arrangements in
place.
A
discussion regarding the basis for the Board of Trustees’ approval of the
Management Agreement for the Fund in 2023 is available in the Fund's Annual
Report dated October 31, 2023.
The
Investment Adviser has agreed to reduce or limit “Other Expenses” (excluding
acquired fund fees and expenses, transfer agency fees and expenses, taxes,
interest, brokerage fees, expenses of shareholder meetings, litigation and
indemnification, and extraordinary expenses) to 0.004% of average daily net
assets for the International Equity ESG Fund and to 0.014% of average daily net
assets for the International Equity Income Fund, through at least February 28,
2025, and prior to such date, the Investment Adviser may not terminate the
arrangements without the approval of the Board of Trustees. The expense
limitations may be modified or terminated by the Investment Adviser at its
discretion and without shareholder approval after such date, although the
Investment Adviser does not presently intend to do so. The Fund’s “Other
Expenses” may be further reduced by any custody and transfer agency fee credits
received by the Fund.
28
Service
Providers
|
FUND
MANAGERS |
Fundamental
International Equity Portfolio Management Team
The
individuals jointly and primarily responsible for the day-to-day management of
the Fund are listed below. The Fund’s portfolio managers' individual
responsibilities may differ and may include, among other things, security
selection, asset allocation, risk budgeting and general oversight of the
management of the Fund’s portfolios.
|
Name
and Title |
Fund
Responsibility |
Years
Primarily
Responsible
|
Five
Year Employment History |
|
Alexis
Deladerrière, CFA
Managing
Director |
Portfolio
Manager—
International
Equity ESG
International
Equity Income |
Since
2012
2012 |
Mr.
Deladerrière is the Head of International Developed Markets
Equity
within the Fundamental Equity team and the portfolio
manager
for the International Equity ESG and International Equity
Income
strategies. Mr. Deladerrière joined the Investment Adviser in
July
2002 as a research analyst. |
|
Abhishek
Periwal, CFA
Managing
Director |
Portfolio
Manager—
International
Equity ESG
International
Equity Income |
Since
2018
2018 |
Mr.
Periwal is a portfolio manager for international equity strategies
within
the Fundamental Equity team, including the International
Equity
ESG and International Equity Income strategies. Mr. Periwal
joined
the Investment Adviser in 2007 as an investment
analyst. |
For
information about portfolio manager compensation, other accounts managed by a
portfolio manager and portfolio manager ownership of securities in the Fund, see
the SAI.
|
DISTRIBUTOR
AND TRANSFER AGENT |
Goldman
Sachs, 200 West Street, New York, NY 10282, serves as the exclusive distributor
(the “Distributor”) of the Fund’s shares. Goldman Sachs, 71 South Wacker Drive,
Suite 1200, Chicago, IL 60606, also serves as the Fund’s transfer agent (the
“Transfer Agent”) and, as such, performs various shareholder servicing
functions.
For its
transfer agency services, Goldman Sachs is entitled to receive a transfer agency
fee equal, on an annualized basis, to 0.03% of average daily net assets with
respect to Class R6 Shares, to 0.04% of average daily net assets with respect to
Institutional and Service Shares and 0.15% of average daily net assets with
respect to Class A, Class C, Investor, and Class R Shares.
Goldman
Sachs has agreed to waive a portion of its transfer agency fee (a component of
“Other Expenses”) equal to 0.05% and 0.03% as an annual percentage rate of the
average daily net assets attributable to Class A, Class C, Investor, and Class R
Shares, as applicable, of the International Equity ESG Fund and International
Equity Income Fund, respectively, through at least February 28, 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.
From time to time, Goldman Sachs or any of its affiliates may purchase and hold shares of the Fund. Goldman Sachs and its affiliates reserve the right to redeem at any time some or all of the shares acquired for their own accounts.
|
ACTIVITIES
OF GOLDMAN SACHS AND ITS AFFILIATES AND OTHER
ACCOUNTS
MANAGED BY GOLDMAN SACHS |
The
involvement of the Investment Adviser, Goldman Sachs and their affiliates in the
management of, or their interest in, other accounts and other activities of
Goldman Sachs will present conflicts of interest with respect to the Fund and
will, under certain circumstances, limit the Fund’s investment activities.
Goldman Sachs is a worldwide, full service investment banking, broker dealer,
asset management and financial services organization and a major participant in
global financial markets that provides a wide range of financial services to a
substantial and diversified client base that includes corporations, financial
institutions, governments and individuals. As such, it acts as a broker-dealer,
investment adviser, investment banker, underwriter, research provider,
administrator, financier, adviser, market maker, trader, prime broker,
derivatives dealer, clearing agent, lender, counterparty, agent, principal,
distributor, investor or in other commercial capacities for accounts or
companies or affiliated or unaffiliated investment funds (including pooled
investment vehicles and private funds) in which one or more accounts, including
the Fund, invest. In those and other capacities, Goldman Sachs and its
affiliates advise and deal with clients and third parties in all markets and
transactions and purchase, sell, hold and recommend a broad array of
investments, including securities, derivatives, loans, commodities, currencies,
credit default swaps, indices, baskets and other financial instruments and
products for their own accounts or for the accounts of their customers and have
other direct and indirect interests in the global fixed income, currency,
commodity, equities, bank loans and other markets and the securities and issuers
in which the Fund may directly and indirectly invest. Thus, it is
expected that the Fund will have multiple business relationships with and will
invest in, engage in transactions with, make voting decisions with respect to,
or obtain services from entities for which Goldman Sachs and its affiliates
perform or seek to perform investment banking or other services. The Investment
Adviser and/or certain of its affiliates are the managers of the Goldman Sachs
Funds. The Investment Adviser and its affiliates earn fees from this and other
relationships with the Fund. Although management fees paid by the Fund to the
Investment
29
Adviser and
certain other fees paid to the Investment Adviser’s affiliates are based on
asset levels, the fees are not directly contingent on Fund performance, and the
Investment Adviser and its affiliates will still receive significant
compensation from the Fund even if shareholders lose money. Goldman Sachs and
its affiliates engage in proprietary trading and advise accounts and funds which
have investment objectives similar to those of the Fund and/or which engage in
and compete for transactions in the same types of securities, currencies and
instruments as the Fund. Goldman Sachs and its affiliates will not have any
obligation to make available any information regarding their proprietary
activities or strategies, or the activities or strategies used for other
accounts managed by them, for the benefit of the management of the Fund. The
results of the Fund’s investment activities, therefore, will likely differ from
those of Goldman Sachs, its affiliates, and other accounts managed by Goldman
Sachs, and it is possible that the Fund could sustain losses during periods in
which Goldman Sachs and its affiliates and other accounts achieve significant
profits on their trading for proprietary or other accounts. In addition, the
Fund may enter into transactions in which Goldman Sachs and its affiliates or
their other clients have an adverse interest. For example, the Fund may take a
long position in a security at the same time that Goldman Sachs and its
affiliates or other accounts managed by the Investment Adviser or its affiliates
take a short position in the same security (or vice versa). These and other
transactions undertaken by Goldman Sachs, its affiliates or Goldman
Sachs-advised clients may, individually or in the aggregate, adversely impact
the Fund. Transactions by one or more Goldman Sachs-advised clients or the
Investment Adviser may have the effect of diluting or otherwise disadvantaging
the values, prices or investment strategies of the Fund. The Fund’s activities
will, under certain circumstances, be limited because of regulatory restrictions
applicable to Goldman Sachs and its affiliates, and/or their internal policies
designed to comply with such restrictions. As a global financial services firm,
Goldman Sachs and its affiliates also provide a wide range of investment banking
and financial services to issuers of securities and investors in securities.
Goldman Sachs, its affiliates and others associated with it are expected to
create markets or specialize in, have positions in and/or effect transactions
in, securities of issuers held by the Fund, and will likely also perform or seek
to perform investment banking and financial services for one or more of those
issuers. Goldman Sachs and its affiliates are expected to have business
relationships with and purchase or distribute or sell services or products from
or to distributors, consultants or others who recommend the Fund or who engage
in transactions with or for the Fund. For more information about conflicts of
interest, see the section entitled “Potential Conflicts of Interest” in the
SAI.
Under a
securities lending program approved by the Fund’s Board of Trustees, the Fund
has retained an affiliate of the Investment Adviser to serve as a securities
lending agent for the Fund to the extent that the Fund engages in the securities
lending program. For these services, the lending agent would receive a fee from
the Fund, including a fee based on the returns earned on the Fund’s investment
of the cash received as collateral for the loaned securities. The Board of
Trustees periodically reviews reports on portfolio securities loan transactions
for which the affiliated lending agent has acted as lending agent. In addition,
the Fund may make brokerage and other payments to Goldman Sachs and its
affiliates in connection with the Fund’s portfolio investment transactions, in
accordance with applicable law.
30
Distributions
The Fund
pays distributions from its investment income and from net realized capital
gains. You may choose to have distributions paid in:
◼
Cash
◼
Additional
shares of the same class of the same Fund
◼
Shares of
the same or an equivalent class of another Goldman Sachs Fund. Special
restrictions may apply. See the SAI.
You may
indicate your election on your account application. Any changes may be submitted
in writing or via telephone, in some instances, to the Transfer Agent (either
directly or through your Intermediary) at any time before the record date for a
particular distribution. If you do not indicate any choice, your distributions
will be reinvested automatically in the Fund. Distributions from net
capital gains, if any, are normally declared and paid annually for the Fund.
Distributions from net investment income, if any, are normally declared and paid
annually for the International Equity ESG Fund and semi-annually for the
International Equity Income Fund. In addition the Fund may occasionally make a
distribution at a time when it is not normally made. If cash distributions are
elected with respect to the Fund’s annual distributions from net
investment income, then cash distributions must also be elected with respect to
the net short-term capital gains component, if any, of the Fund’s annual
distributions.
The
election to reinvest distributions in additional shares will not affect the tax
treatment of such distributions, which will be treated as received by you and
then used to purchase the shares.
The Fund’s
investments in foreign securities may be subject to foreign withholding taxes.
Under certain circumstances, the Fund may elect to pass-through these taxes to
you. If this election is made, a proportionate amount of such taxes will
constitute a distribution to you, which would allow you either (i) to credit
such proportionate amount of foreign taxes against your U.S. federal income tax
liability or (ii) to take such amount as an itemized
deduction.
From time
to time a portion of the Fund’s distributions may constitute a return of capital
for tax purposes, and/or may include amounts in excess of the Fund’s net
investment income for the period calculated in accordance with generally
accepted accounting principles (GAAP).
When you
purchase shares of the Fund, part of the NAV per share may be represented by
undistributed income and/or realized gains that have previously been earned by
the Fund. Therefore, subsequent distributions on such shares from such income
and/or realized gains may be taxable to you even if the NAV of the shares is, as
a result of the distributions, reduced below the cost of such shares and the
distributions (or portions thereof) represent a return of a portion of the
purchase price.
31
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 the 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.
The Fund
will be deemed to have received an order for purchase, redemption or exchange of
Fund shares when the order is accepted in “proper form” by 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 the 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, the
Fund may accept cashier’s checks or official bank checks.
Investor
and Class R Shares are not sold directly to the public. Instead, Investor and
Class R Shares generally are available only to Section 401(k), 403(b), 457,
profit sharing, money purchase pension, tax-sheltered annuity, defined benefit
pension, non-qualified deferred compensation plans and non-qualified pension
plans or other employee benefit plans (including health savings accounts) or
SIMPLE plans that are sponsored by one or more employers (including governmental
or church employers) or employee organizations (“Employee Benefit Plans”).
Investor Shares may also be sold to accounts established under a fee-based
program that is sponsored and maintained by an Intermediary that has entered
into a contractual relationship with Goldman Sachs to offer such shares through
such programs (“Eligible Fee-Based Program”). Investor and Class R Shares are
not available to traditional and Roth Individual Retirement Accounts (“IRAs”),
SEPs and SARSEPs; except that Investor Shares are available to such accounts or
plans to the extent they are purchased through an Eligible Fee-Based Program.
Employee Benefit Plans and Eligible Fee-Based Programs must purchase Investor or
Class R Shares through an Intermediary using a plan level or omnibus
account.
Employee
Benefit Plans generally may open an account and purchase Investor and/or Class R
Shares through Intermediaries, financial planners, Employee Benefit Plan
administrators and other financial intermediaries. Investor and/or Class R
Shares may not be available through certain
Intermediaries.
32
Shareholder
Guide
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.
For
Institutional Shares, the minimum initial investment is $1,000,000 for
individual or Institutional Investors, alone or in combination with other assets
under the management of the Investment Adviser and its affiliates, except that
no initial minimum will be imposed on (i) Employee Benefit Plans that hold their
Institutional Shares through plan-level or omnibus accounts; or (ii) investment
advisers investing for accounts for which they receive asset-based fees where
the investment adviser or its Intermediary purchases Institutional Shares
through an omnibus account. For this purpose, “Institutional Investors” shall
include “wrap” account sponsors (provided they have an agreement covering the
arrangement with the Distributor); corporations; qualified non-profit
organizations, charitable trusts, foundations and endowments; any state, county
or city, or any instrumentality, department, authority or agency thereof; and
banks, trust companies or other depository institutions investing for their own
account or on behalf of their clients.
No minimum
amount is required for initial purchases in Investor, Class R and Class R6
Shares (except as provided below) or additional investments in Institutional,
Service, Investor, Class R or Class R6 Shares.
For Class
R6 Shares, the minimum initial investment is $5,000,000 for institutional
investors, including companies, foundations, endowments, municipalities, trusts
and other entities who purchase Class R6 Shares directly with the Transfer
Agent.
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.
33
What Should I Know
When I Purchase Shares Through An Intermediary?
If shares
of the 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 the 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
◼
Act,
directly or through an agent, as the sole shareholder of
record
◼
Maintain
account records for customers
◼
Process
orders to purchase, redeem and exchange shares for customers
◼
Process
payments for customers
Intermediaries
that invest in shares on behalf of their customers may charge brokerage
commissions or other fees directly to their customer accounts in connection with
their investments. You should contact your Intermediary for information
regarding such charges, as these fees, if any, may affect the return such
customers realize with respect to their investments.
The
Investment Adviser, Distributor and/or their affiliates may make payments or
provide services to Intermediaries and other persons to promote the sale,
distribution and/or servicing of shares of the Fund and other Goldman Sachs
Funds, except that the Investment Adviser, Distributor and their affiliates do
not make such payments on behalf of Class R6 Shares. These payments are made out
of the Investment Adviser’s, Distributor’s and/or their affiliates’ own assets,
and are not an additional charge to the Fund. The payments are in addition to
the distribution and service fees, service fees and shareholder administration
fees and sales charges described in the Prospectus. Such payments are intended
to compensate Intermediaries and other persons for, among other things:
marketing shares of the Fund and other Goldman Sachs Funds, which may consist of
payments relating to the Fund’s inclusion on preferred or recommended fund lists
or in certain sales programs sponsored by the recipients; access to the
Intermediaries’ registered representatives or salespersons, including at
conferences and other meetings; assistance in training and education of
personnel; marketing support; the provision of analytical or other data to the
Investment Adviser or its affiliates relating to sales of shares of the Fund and
other Goldman Sachs Funds; the support or purchase of technology
platforms/software; and/or other specified services intended to assist in the
distribution and marketing of the Fund and other Goldman Sachs Funds, including
provision of consultative services to the Investment Adviser or its affiliates
relating to marketing and/or sale of shares of the Fund and other Goldman Sachs
Funds. The payments may also, to the extent permitted by applicable regulations,
sponsor various trainings and educational programs. The payments by the
Investment Adviser, Distributor and/or their affiliates, which are in addition
to the fees paid for these services by the Fund, may also compensate
Intermediaries and other persons for sub-accounting, sub-transfer agency,
administrative, shareholder processing and/or recordkeeping services. These
additional payments may exceed amounts earned on these assets by the Investment
Adviser, Distributor and/or their affiliates for the performance of these or
similar services. The amount of these additional payments is normally not
expected to exceed 0.50% (annualized) of the amount sold or invested through the
recipients. In addition, certain Intermediaries may have access to certain
services from the Investment Adviser, Distributor and/or their affiliates,
including research reports, economic analysis, and portfolio analysis, portfolio
construction and similar tools and software. In certain cases, the
Intermediaries may not pay for these products or services or may only pay for a
portion of the total cost of these products or services. Please refer to the
“Payments to Others (Including Intermediaries)” section of the SAI for more
information about these and similar payments and services.
The
payments made by the Investment Adviser, Distributor and/or their affiliates and
the services provided by an Intermediary or other person may differ for
different Intermediaries and other persons. The presence of these and similar
payments, receipt of these services and the basis on which an Intermediary
compensates its registered representatives or salespersons may create an
incentive for a particular Intermediary, registered representative, salesperson
or other person to highlight, feature or recommend Funds based, at least in
part, on the level of compensation paid. You should contact your Intermediary,
or any other person that provides services to you, for more information about
the payments it receives and any potential conflicts of
interest.
34
Shareholder
Guide
You may be
required to pay a commission directly to a broker or financial intermediary for
effecting transactions in Institutional Shares. In addition to Institutional
Shares, the Fund also offers other classes of shares to investors. These other
share classes are subject to different fees and expenses (which affect
performance) and are entitled to different services than Institutional Shares.
Information regarding these other share classes is included in the Prospectus
for the applicable share class and may also be obtained from your Intermediary
or from Goldman Sachs by calling the number on the back cover of the
Prospectus.
What Else Should I
Know About Share Purchases?
The Trust
reserves the right to:
◼
Refuse to
open an account or require an Intermediary to refuse to open an account if you
fail to (i) provide a taxpayer identification number, a Social Security Number
or other government-issued identification (e.g., for an individual, a driver’s
license or passport) or (ii) certify that such number or other information is
correct (if required to do so under applicable law).
◼
Reject or
restrict any purchase or exchange order by a particular purchaser (or group of
related purchasers) for any reason in its discretion. Without limiting the
foregoing, the Trust may reject or restrict purchase and exchange orders by a
particular purchaser (or group of related purchasers) when a pattern of frequent
purchases, sales or exchanges of shares of the Fund is evident, or if purchases,
sales or exchanges are, or a subsequent redemption might be, of a size that
would disrupt the management of the Fund.
◼
Close the
Fund to new investors from time to time and reopen any such Fund whenever it is
deemed appropriate by the Investment Adviser.
◼
Provide
for, modify or waive the minimum investment requirements.
◼
Modify the
manner in which shares are offered.
◼
Modify the
sales charge rate applicable to future purchases of shares.
Shares of
the Fund are only registered for sale in the United States and certain of its
territories. Generally, shares of the Fund will only be offered or sold to “U.S.
persons” and all offerings or other solicitation activities will be conducted
within the United States, in accordance with the rules and regulations of the
Securities Act of 1933, as amended (“Securities Act”).
The Fund
may allow you to purchase shares through an Intermediary with securities instead
of cash if consistent with the Fund’s investment policies and operations and
approved by the Investment Adviser.
Notwithstanding
the foregoing, the Trust and Goldman Sachs reserve the right to reject or
restrict purchase or exchange requests from any investor. The Trust and Goldman
Sachs will not be liable for any loss resulting from rejected purchase or
exchange orders.
Please be
advised that abandoned or unclaimed property laws for certain states (to which
your account may be subject) require financial organizations to transfer
(escheat) unclaimed property (including shares of the Fund) to the appropriate
state if no activity occurs in an account for a period of time specified by
state law. For IRA accounts escheated to a state under these abandoned property
laws, the escheatment will generally be treated as a taxable distribution to
you; federal and any applicable state income tax will be withheld. This may
apply to your Roth IRA as well.
Customer
Identification Program. Federal
law requires the Fund to obtain, verify and record identifying information for
certain investors, which will be reviewed solely for customer identification
purposes, which may include the name, residential or business street address,
date of birth (for an individual), Social Security Number or taxpayer
identification number or other information, for each investor who opens an
account directly with the Fund. Applications without the required information
may not be accepted by the Fund. Throughout the life of your account, the Fund
may request updated identifying information in accordance with their Customer
Identification Program. After accepting an application, to the extent permitted
by applicable law or their Customer Identification Program, the Fund reserves
the right to: (i) place limits on transactions in any account until the identity
of the investor is verified; (ii) refuse an investment in the Fund; or (iii)
involuntarily redeem an investor’s shares and close an account in the event that
the Fund is unable to verify an investor’s identity or are unable to obtain all
required information. The Fund and its agents will not be responsible for any
loss or tax liability in an investor’s account resulting from the investor’s
delay in providing all required information or from closing an account and
redeeming an investor’s shares pursuant to their Customer Identification
Program.
How Are Shares
Priced?
The price
you pay when you buy shares is the Fund’s next-determined NAV per share (as
adjusted for any applicable sales charge) after the Transfer Agent (or, if
applicable, an Authorized Institution) has received and accepted your order in
proper form. The price you receive when you sell shares is the Fund’s
next-determined NAV per share (adjusted for any applicable CDSCs) after the
Transfer Agent (or, if applicable, an Authorized Institution) has received and
accepted your order in proper form, with the redemption proceeds reduced by any
applicable charges (e.g., CDSCs). Each class generally calculates its NAV as
follows:
|
NAV
= |
(Value
of Assets of the Class)
–
(Liabilities of the Class) |
|
|
Number
of Outstanding Shares of the
Class |
35
The Fund’s
investments for which market quotations are readily available are valued at
market value on the basis of quotations provided by pricing sources. If accurate
quotations are not readily available, if the Fund’s fund accounting agent is
unable for other reasons to facilitate pricing of individual securities or
calculate the Fund’s NAV, or if the Investment Adviser believes that such
quotations do not accurately reflect fair value, the fair value of the Fund’s
investments may be determined in good faith under valuation procedures approved
by the Board of Trustees. Thus, such pricing may be based on subjective
judgments and it is possible that the prices resulting from such valuation
procedures may differ materially from the value realized on a sale. Cases where
there is no clear indication of the value of the Fund’s investments include,
among others, situations where a security or other asset or liability does not
have a price source or a price is unavailable.
Equity
securities listed on an exchange are generally valued at the last available sale
price on the exchange on which they are principally traded. To the extent the
Fund invests in foreign equity securities, “fair value” prices will be provided
by an independent third-party pricing (fair value) service in accordance with
the fair value procedures approved by the Board of Trustees. Fair value prices
are used because many foreign markets operate at times that do not coincide with
those of the major U.S. markets. Events that could affect the values of foreign
portfolio holdings may occur between the close of the foreign market and the
time of determining the NAV, and would not otherwise be reflected in the
NAV.
Fixed
income securities are generally valued on the basis of prices (including
evaluated prices) and quotations provided by pricing services or securities
dealers. Pricing services may use matrix pricing or valuation models, which
utilize certain inputs and assumptions, including, but not limited to, yield or
price with respect to comparable fixed income securities, to determine current
value. Pricing services generally value fixed income securities assuming orderly
transactions of an institutional round lot size, but the Fund may hold or
transact in such securities in smaller odd lot sizes. Odd lots may trade at
lower prices than institutional round lots.
Investments
in other open-end registered investment companies (if any), excluding
investments in ETFs, are valued based on the NAV of those open-end registered
investment companies (which may use fair value pricing as discussed in their
prospectuses). Investments in ETFs will generally be valued at the last sale
price or official closing price on the exchange on which they are principally
traded.
In
addition, the Investment Adviser, consistent with its procedures and applicable
regulatory guidance, may (but need not) determine to make an adjustment to the
previous closing prices of either domestic or foreign securities in light of
significant events, to reflect what it believes to be the fair value of the
securities at the time of determining the Fund’s NAV. Significant events that
could affect a large number of securities in a particular market may include,
but are not limited to: situations relating to one or more single issuers in a
market sector; significant fluctuations in U.S. or foreign markets; market
dislocations; market disruptions or unscheduled market closings; equipment
failures; natural or man-made disasters or acts of God; armed conflicts;
governmental actions or other developments; as well as the same or similar
events which may affect specific issuers or the securities markets even though
not tied directly to the securities markets. Other significant events that could
relate to a single issuer may include, but are not limited to: corporate actions
such as reorganizations, mergers and buy-outs; corporate announcements,
including those relating to earnings, products and regulatory news; significant
litigation; ratings downgrades; bankruptcies; and trading limits or
suspensions.
One effect
of using an independent third-party pricing (fair value) service and fair
valuation may be to reduce stale pricing arbitrage opportunities presented by
the pricing of Fund shares. However, it involves the risk that the values used
by the Fund to price its investments may be different from those used by other
investment companies and investors to price the same
investments.
Please note
the following with respect to the price at which your transactions are
processed:
◼
NAV per
share of each share class is generally calculated by the Fund’s fund accounting
agent on each business day as of the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m. Eastern time) or such other times as the New
York Stock Exchange or NASDAQ market may officially close. Fund shares will
generally not be priced on any day the New York Stock Exchange is
closed.
◼
The Trust
reserves the right to reprocess purchase (including dividend reinvestments),
redemption and exchange transactions that were processed at a NAV that is
subsequently adjusted, and to recover amounts from (or distribute amounts to)
shareholders accordingly based on the official closing NAV, as
adjusted.
◼
The Trust
reserves the right to advance the time by which purchase and redemption orders
must be received for same business day credit as otherwise permitted by the
SEC.
Consistent
with industry practice, investment transactions not settling on the same day are
recorded and factored into the Fund’s NAV on the business day following trade
date (T+1). The use of T+1 accounting generally does not, but may, result in a
NAV that differs materially from the NAV that would result if all transactions
were reflected on their trade dates.
36
Shareholder
Guide
Note:
The time at which transactions and shares are priced and the time by which
orders must be received may be changed in case of an emergency or if regular
trading on the New York Stock Exchange is stopped at a time other than its
regularly scheduled closing time. In the event the New York Stock Exchange does
not open for business, the Trust may, but is not required to, open one or more
Funds for purchase, redemption and exchange transactions if the Federal Reserve
wire payment system is open. To learn whether the Fund is open for business
during this situation, please call the appropriate phone number located on the
back cover of the Prospectus.
Foreign
securities may trade in their local markets on days the Fund is closed. As a
result, if the Fund holds foreign securities, its NAV may be impacted on days
when investors may not purchase or redeem Fund shares.
The Fund
relies on various sources to calculate its NAV. The ability of the Fund’s fund
accounting agent to calculate the NAV per share of each share class of the Fund
is subject to operational risks associated with processing or human errors,
systems or technology failures, cyber attacks and errors caused by third party
service providers, data sources, or trading counterparties. Such failures may
result in delays in the calculation of the Fund’s NAV and/or the inability to
calculate NAV over extended time periods. The Fund may be unable to recover any
losses associated with such failures. In addition, if the third party service
providers and/or data sources upon which the Fund directly or indirectly relies
to calculate its NAV or price individual securities are unavailable or otherwise
unable to calculate the NAV correctly, it may be necessary for alternative
procedures to be utilized to price the securities at the time of determining the
Fund’s NAV.
|
Common
Questions Applicable to the Purchase of
Class
A Shares |
What Is The Offering
Price Of Class A Shares?
The
offering price of Class A Shares of the Fund is the next determined NAV per
share plus an initial sales charge paid to Goldman Sachs at the time of purchase
of shares. The sales
charge varies depending upon the amount you purchase. In some cases, described
below, the initial sales charge may be eliminated altogether, and the offering
price will be the NAV per share. The current sales charges and commissions paid
to Intermediaries for Class A Shares of the Fund are as follows:
|
Amount
of Purchase
(including
sales charge, if any) |
Sales
Charge as
Percentage
of
Offering
Price |
Sales
Charge
as
Percentage
of
Net Amount
Invested |
Maximum
Dealer
Allowance
as
Percentage
of
Offering
Price* |
|
Less
than $50,000 |
5.50% |
5.82% |
5.00% |
|
$50,000
up to (but less than) $100,000 |
4.75 |
4.99 |
4.00 |
|
$100,000
up to (but less than) $250,000 |
3.75 |
3.90 |
3.00 |
|
$250,000
up to (but less than) $500,000 |
2.75 |
2.83 |
2.25 |
|
$500,000
up to (but less than) $1 million |
2.00 |
2.04 |
1.75 |
|
$1
million or more |
0.00** |
0.00** |
*** |
*
Dealer’s
allowance may be changed periodically. During special promotions, the entire
sales charge may be reallowed to Intermediaries. Intermediaries to whom
substantially the entire sales charge is reallowed may be deemed to be
“underwriters” under the Securities Act.
**
No
sales charge is payable at the time of purchase of Class A Shares of $1 million
or more, but a CDSC of 1.00% may be imposed in the event of certain redemptions
within 18 months. For more information about Class A Shares’ CDSCs, please see
“What Else Do I Need To Know About Class A Shares’ CDSC?”
below.
***
The
Distributor may pay a one-time commission to Intermediaries who initiate or are
responsible for purchases of $1 million or more of shares of the Fund equal to
1.00% of the amount under $3 million, 0.50% of the next $2 million, and 0.25%
thereafter. In instances where this one-time commission is not paid to a
particular Intermediary (including Goldman Sachs’ Private Wealth Management
Unit), the CDSC on Class A Shares, generally, will be waived. The Distributor
may also pay, with respect to all or a portion of the amount purchased, a
commission in accordance with the foregoing schedule to Intermediaries who
initiate or are responsible for purchases by Employee Benefit Plans investing in
the Fund which satisfy the criteria set forth below in “When Are Class A Shares
Not Subject To A Sales Load?” or $1 million or more by certain “wrap” accounts.
Purchases by such plans will be made at NAV with no initial sales charge, but if
shares are redeemed within 18 months, a CDSC of 1.00% may be imposed upon the
plan, the plan sponsor or the third-party administrator. In addition,
Intermediaries will remit to the Distributor such payments received in
connection with “wrap” accounts in the event that shares are redeemed within 18
months.
Different
Intermediaries may impose different sales charges. These variations are
described in Appendix C—Additional Information About Sales Charge Variations,
Waivers and Discounts.
You should
note that the actual sales charge that appears in your mutual fund transaction
confirmation may differ slightly from the rate disclosed above in the Prospectus
due to rounding calculations.
37
As
indicated in the preceding chart, and as discussed further below and in the
section titled “How Can The Sales Charge On Class A Shares Be Reduced?” and in
Appendix C—Additional Information About Sales Charge Variations, Waivers and
Discounts, you may, under certain circumstances, be entitled to pay reduced
sales charges on your purchases of Class A Shares or have those charges waived
entirely. To take advantage of these discounts, your Intermediary must notify
the Fund’s Transfer Agent at the time of your purchase order that a discount may
apply to your current purchases. You may also be required to provide appropriate
documentation to receive these discounts, including:
(i)
Information
or records regarding shares of the Fund or other Goldman Sachs Funds held in all
accounts (e.g., retirement accounts) of the shareholder at all Intermediaries;
or
(ii)
Information
or records regarding shares of the Fund or other Goldman Sachs Funds held at any
Intermediary by related parties of the shareholder, such as members of the same
family or household.
What Else Do I Need
To Know About Class A Shares’ CDSC?
Purchases
of $1 million or more of Class A Shares will be made at NAV with no initial
sales charge. However, if you redeem shares within 18 months after the beginning
of the month in which the purchase was made, a CDSC of 1.00% may be imposed. The
CDSC may not be imposed if your Intermediary agrees with the Distributor to
return all or an applicable prorated portion of its commission to the
Distributor. The CDSC is waived on redemptions in certain circumstances. See “In
What Situations May The CDSC On Class A Or C Shares Be Waived Or Reduced?” below
and, if you hold shares through an Intermediary, see Appendix C—Additional
Information About Sales Charge Variations, Waivers and
Discounts.
When Are Class A
Shares Not Subject To A Sales Load?
Class A
Shares of the Fund may be sold at NAV without payment of any sales charge to the
following individuals and entities:
◼
Goldman
Sachs, its affiliates or their respective officers, partners, directors or
employees (including retired employees and former partners), any partnership of
which Goldman Sachs is a general partner, any Trustee or officer of the Trust
and designated family members of any of these individuals;
◼
Qualified
employee benefit plans of Goldman Sachs;
◼
Trustees or
directors of investment companies for which Goldman Sachs or an affiliate acts
as sponsor;
◼
Any
employee or registered representative of any Intermediary (or such
Intermediaries’ affiliates and subsidiaries) or their respective spouses or
domestic partners, children and parents;
◼
Banks,
trust companies or other types of depository institutions;
◼
Any state,
county or city, or any instrumentality, department, authority or agency thereof,
which is prohibited by applicable investment laws from paying a sales charge or
commission in connection with the purchase of shares of the
Fund;
◼
Employee
Benefit Plans, other than Employee Benefit Plans that purchase Class A Shares
through brokerage relationships in which sales charges are customarily imposed.
Under such circumstances, Plans will be assessed sales charges as described
further in “Shareholder Guide—Common Questions Applicable To the Purchase of
Class A Shares”;
◼
Investors
who purchase Class A Shares through an omnibus account sponsored by an
Intermediary that has an agreement with the Distributor covering such investors
to offer Class A Shares without charging an initial sales
charge;
◼
Insurance
company separate accounts that make the Fund available as an underlying
investment in certain group annuity contracts;
◼
“Wrap”
accounts for the benefit of clients of broker-dealers, financial institutions or
financial planners, provided they have entered into an agreement with GSAM
specifying aggregate minimums and certain operating policies and
standards;
◼
Investment
advisers investing for accounts for which they receive asset-based
fees;
◼
Accounts
over which GSAM or its advisory affiliates have investment
discretion;
◼
Shareholders
who roll over distributions from any tax-qualified Employee Benefit Plan or
tax-sheltered annuity to an IRA which invests in the Goldman Sachs Funds if the
tax-qualified Employee Benefit Plan or tax-sheltered annuity receives
administrative services provided by certain third party administrators that have
entered into a special service arrangement with Goldman Sachs relating to such
plan or annuity;
◼
State
sponsored 529 college savings plans;
◼
Investors
that purchase Class A Shares through the GS Retirement Plan Plus and Goldman
Sachs 401(k) Programs;
◼
Former
shareholders of certain funds who (i) received shares of a Goldman Sachs Fund in
connection with a reorganization of an acquired fund into a Goldman Sachs Fund,
(ii) had previously qualified for purchases of Class A Shares of the acquired
funds without the imposition of a sales load under the guidelines of the
applicable acquired fund family, and (iii) as of August 24, 2012 held their
Goldman Sachs Fund shares directly with the Goldman Sachs Funds’ Transfer Agent,
as long as they continue to hold the shares directly at the Transfer Agent;
or
◼
Investors
who purchase Class A Shares in accounts that are no longer associated with an
Intermediary and held direct at the Transfer Agent, including retirement
accounts.
38
Shareholder
Guide
You
must certify eligibility for any of the above exemptions on your account
application and notify your Intermediary and the Fund if you no longer are
eligible for the exemption. You may be eligible for different or additional
exemptions based on your Intermediary; see Appendix C—Additional Information
About Sales Charge Variations, Waivers and Discounts.
The Fund
will grant you an exemption subject to confirmation of your eligibility by your
Intermediary. You may be charged a fee by your Intermediary.
How Can The Sales
Charge On Class A Shares Be Reduced?
◼
Right
of Accumulation: When buying
Class A Shares in Goldman Sachs Funds, your current aggregate investment
determines the initial sales load you pay. You may qualify for reduced sales
charges when the current market value of holdings across Class A Shares and/or
Class C Shares, plus new purchases, reaches $50,000 or more. Class A Shares
and/or Class C Shares of any of the Goldman Sachs Funds may be combined under
the Right of Accumulation. If the Fund’s Transfer Agent is properly notified,
the “Amount of Purchase” in the chart in the section “What Is The Offering Price
Of Class A Shares?” will be deemed to include all Class A Shares and/or Class C
Shares of the Goldman Sachs Funds that were held at the time of purchase by any
of the following persons: (i) you, your spouse or domestic partner, your parents
and your children; and (ii) any trustee, guardian or other fiduciary of a single
trust estate or a single fiduciary account. This includes, for example, any
Class A Shares and/or Class C Shares held at an Intermediary other than the one
handling your current purchase. For purposes of applying the Right of
Accumulation, shares of the Fund and any other Goldman Sachs Funds purchased by
an existing client of Goldman Sachs Private Wealth Management or GS Ayco Holding
LLC will be combined with Class A Shares and/or Class C Shares and other assets
held by all other Goldman Sachs Private Wealth Management accounts or accounts
of GS Ayco Holding LLC, respectively. In addition, under some circumstances,
Class A Shares and/or Class C Shares of the Fund and Class A Shares and/or Class
C Shares of any other Goldman Sachs Fund purchased by partners, directors,
officers or employees of certain organizations may be combined for the purpose
of determining whether a purchase will qualify for the Right of Accumulation
and, if qualifying, the applicable sales charge level. To qualify for a reduced
sales load, you or your Intermediary must notify the Fund’s Transfer Agent at
the time of investment that a quantity discount is applicable. If you do not
notify your Intermediary at the time of your current purchase or a future
purchase that you qualify for a quantity discount, you may not receive the
benefit of a reduced sales charge that might otherwise apply. Use of this option
is subject to a check of appropriate records.
In some
circumstances, other Class A Shares and/or Class C Shares may be aggregated with
your current purchase under the Right of Accumulation as described in the SAI.
For purposes of determining the “Amount of Purchase,” all Class A Shares and/or
Class C Shares currently held will be valued at their current market
value.
◼
Statement
of Intention: You may
obtain a reduced sales charge by means of a written Statement of Intention which
expresses your non-binding commitment to invest (not counting reinvestments of
dividends and distributions) in the aggregate $50,000 or more within a period of
13 months in Class A Shares of one or more of the Goldman Sachs Funds. Any
investments you make during the period will receive the discounted sales load
based on the full amount of your investment commitment. Purchases made during
the previous 90 days may be included; however, capital appreciation does not
apply toward these combined purchases. If the investment commitment of the
Statement of Intention is not met prior to the expiration of the 13-month
period, the entire amount will be subject to the higher applicable sales charge
unless the failure to meet the investment commitment is due to the death of the
investor. By selecting the Statement of Intention, you authorize the Transfer
Agent to escrow and redeem Class A Shares in your account to pay this additional
charge if the Statement of Intention is not met. You must, however, inform the
Transfer Agent (either directly or through your Intermediary) that the Statement
of Intention is in effect each time shares are purchased. Each purchase will be
made at the public offering price applicable to a single transaction of the
dollar amount specified on the Statement of Intention. The SAI has more
information about the Statement of Intention, which you should read
carefully.
Different
Intermediaries may have different policies regarding Rights of Accumulation and
Statements of Intention. These variations are described in Appendix C—Additional
Information About Sales Charge Variations, Waivers and Discounts.
|
Common
Questions Applicable to the Purchase Of Class C
Shares |
What Is The Offering
Price Of Class C Shares?
You may
purchase Class C Shares of the Fund at the next determined NAV without paying an
initial sales charge. However, if you redeem Class C Shares within 12 months of
purchase, a CDSC of 1.00% will normally be deducted from the redemption
proceeds. In connection with purchases by Employee Benefit Plans, where Class C
Shares are redeemed within 12 months of purchase, a CDSC of 1.00% may be imposed
upon the plan sponsor or third party administrator. Class C Shares acquired in
exchange for shares subject to a CDSC will be subject to the CDSC, if any, of
the shares originally held. No CDSC is imposed in connection with an exchange of
Class C Shares at the time of such exchange. When Class C Shares are exchanged
for Class C Shares of another fund, the period of time that such shares will be
subject to a CDSC (if any) will be measured as of the date of the original
purchase. With respect to such shares held by Employee Benefit Plans, the CDSC
may be imposed on the plan sponsor or third party
administrator.
39
Different
Intermediaries may impose different sales charges. These variations are
described in “Appendix C—Additional Information About Sales Charge Variations,
Waivers and Discounts.”
Proceeds
from the CDSC are payable to the Distributor and may be used in whole or in part
to defray the Distributor’s expenses related to providing distribution-related
services to the Fund in connection with the sale of Class C Shares, including
the payment of compensation to Intermediaries. A commission equal to 1% of the
amount invested is normally paid by the Distributor to
Intermediaries.
What Should I Know
About The Automatic Conversion Of Class C Shares?
Class C
Shares of the Fund will automatically convert into Class A Shares (which bear
lower distribution and service (12b-1) fees and do not bear additional personal
and account maintenance services fees) of the same Fund on or about the
fifteenth day of the last month of the quarter that is eight years after the
purchase date. No sales charges or other charges will apply in connection with
any conversion.
If you
acquire Class C Shares of the Fund by exchange from Class C Shares of another
Goldman Sachs Fund, your Class C Shares will convert into Class A Shares of such
Fund based on the date of the initial purchase. If you acquire Class C Shares
through reinvestment of distributions, your Class C Shares will convert into
Class A Shares based on the date of the initial purchase of the shares on which
the distribution was paid.
Shareholders
will not recognize a gain or loss for federal income tax purposes upon the
conversion of Class C Shares for Class A Shares of the same Fund. The automatic
conversion of Class C Shares to Class A Shares will not apply to shares held
through group retirement plan recordkeeping platforms of certain Intermediaries
who hold such shares in an omnibus account and do not track participant level
share lot aging to facilitate such a conversion.
New
employee benefit plans are not eligible to purchase Class C Shares. Employee
benefit plans which had this share class of the Fund available to participants
on or before September 18, 2018, may continue to open accounts for new
participants in such share class of the Fund and purchase additional shares in
existing participant accounts.
If you
purchased your shares through an Intermediary, it is the responsibility of your
Intermediary to work with the Transfer Agent to effect the conversion and to
ensure that Class C Shares are automatically converted after the appropriate
period of time. In addition, if your shares are no longer subject to a CDSC, you
may be able to exchange your Class C Shares for Class A Shares without the
payment of a sales charge prior to the automatic conversion subject to the
policies and procedures of the Intermediary through whom you have purchased your
shares. Please contact your Intermediary with questions regarding your
eligibility to exchange Class C Shares for Class A Shares.
|
Common
Questions Applicable to the Purchase Of
Class
A and C Shares |
What Else Do I Need
To Know About The CDSC On Class A Or C Shares?
◼
The CDSC is
based on the lesser of the NAV of the shares at the time of redemption or the
original offering price (which is the original NAV).
◼
No CDSC is
charged on shares acquired from reinvested dividends or capital gains
distributions.
◼
No CDSC is
charged on the per share appreciation of your account over the initial purchase
price.
◼
When
counting the number of months since a purchase of Class A or Class C Shares was
made, all purchases made during a month will be combined and considered to have
been made on the first day of that month.
◼
To keep
your CDSC as low as possible, each time you place a request to sell shares, the
Fund will first sell any shares in your account that do not carry a CDSC and
then the shares in your account that have been held the
longest.
In What Situations
May The CDSC On Class A Or C Shares Be Waived Or Reduced?
The CDSC on
Class A and Class C Shares that are subject to a CDSC may be waived or reduced
if the redemption relates to:
◼
Mandatory
retirement distributions or loans to participants or beneficiaries from Employee
Benefit Plans;
◼
Hardship
withdrawals by a participant or beneficiary in an Employee Benefit
Plan;
◼
The
separation from service by a participant or beneficiary in an Employee Benefit
Plan;
◼
Excess
contributions distributed from an Employee Benefit Plan;
◼
Distributions
from a qualified Employee Benefit Plan invested in the Goldman Sachs Funds which
are being rolled over to an IRA in the same share class of a Goldman Sachs
Fund;
◼
The death
or disability (as defined in Section 72(m)(7) of the Internal Revenue Code of
1986, as amended (the “Code”)) of a shareholder, participant or beneficiary in
an Employee Benefit Plan;
◼
Satisfying
the minimum distribution requirements of the Code;
40
Shareholder
Guide
◼
Establishing
“substantially equal periodic payments” as described under Section 72(t)(2) of
the Code;
◼
Redemption
proceeds which are to be reinvested in accounts or non-registered products over
which GSAM or its advisory affiliates have investment
discretion;
◼
A
systematic withdrawal plan. The Fund reserves the right to limit such
redemptions, on an annual basis, to 12% of the value of your Class C Shares and
10% of the value of your Class A Shares;
◼
Redemptions
or exchanges of Fund shares held through an Employee Benefit Plan using the Fund
as part of a qualified default investment alternative or “QDIA”;
or
◼
Other
redemptions, at the discretion of the Trust’s officers, relating to shares
purchased through Employee Benefit Plans.
You
may be eligible for different or additional exemptions based on your
Intermediary; see “Appendix C—Additional Information About Sales Charge
Variations, Waivers and Discounts.”
|
How
To Sell Shares |
How Can I Sell Shares
Of The Fund?
Generally,
Shares may be sold (redeemed) only through Intermediaries. Customers of an
Intermediary will normally give their redemption instructions to the
Intermediary, and the Intermediary will, in turn, place the order with the
Transfer Agent. On any business day the Fund is open, the Fund will generally
redeem its Shares upon request at their next-determined NAV per share (subject
to any applicable CDSC) after the Transfer Agent (or, if applicable, the
Authorized Institution) has received and accepted a redemption order in proper
form, as described under “How To Buy Shares—How Can I Purchase Shares Of The
Fund?” above. Redemptions may be requested by electronic trading platform
(through your Intermediary), in writing or by telephone (unless the Intermediary
opts out of the telephone redemption privilege on the account application). You
should contact your Intermediary to discuss redemptions and redemption proceeds.
The Fund may transfer redemption proceeds to an account with your Intermediary.
In the alternative, your Intermediary may request that redemption proceeds be
sent to you by check or wire (if the wire instructions are designated in the
current records of the Transfer Agent).
When Do I Need A
Medallion Signature Guarantee To Redeem Shares?
Generally,
a redemption request must be in writing and signed by an authorized person with
a Medallion signature guarantee if:
◼
A request
is made in writing to redeem Class A, Class C, Investor or Class R Shares in an
amount over $50,000 via check;
◼
You would
like the redemption proceeds sent to an address that is not your address of
record; or
◼
You would
like the redemption proceeds sent to a domestic bank account that is not
designated in the current records of the Transfer Agent.
A Medallion
signature guarantee must be obtained from a bank, brokerage firm or other
financial intermediary that is a member of an approved Medallion Guarantee
Program or that is otherwise approved by the Trust. A notary public cannot
provide a Medallion signature guarantee. The written request may be confirmed by
telephone with both the requesting party and the designated Intermediary to
verify instructions. Additional documentation may be
required.
What Do I Need To
Know About Telephone Redemption Requests?
The Trust,
the Distributor and the Transfer Agent will not be liable for any loss or tax
liability you may incur in the event that the Trust accepts unauthorized
telephone redemption requests that the Trust reasonably believes to be genuine.
The Trust may accept telephone redemption instructions from any person
identifying himself or herself as the owner of an account or the owner’s
registered representative where the owner has not declined in writing to use
this service. Thus, you risk possible losses if a telephone redemption is not
authorized by you.
In an
effort to prevent unauthorized or fraudulent redemption and exchange requests by
telephone, Goldman Sachs and SS&C Global Investor & Distribution
Solutions, Inc. (“SS&C”) each employ reasonable procedures specified by the
Trust to confirm that such instructions are genuine. The following general
policies are currently in effect:
◼
Telephone
requests are recorded.
◼
Proceeds of
telephone redemption requests will be sent to your address of record or
authorized account designated in the current records of the Transfer Agent
(unless you provide written instructions and a Medallion signature guarantee
indicating another address or account).
◼
For the
30-day period following a change of address, telephone redemptions will only be
filled by a wire transfer to the authorized account designated in the current
records of the Transfer Agent (see immediately preceding bullet point). In order
to receive the redemption by check during this time period, the redemption
request must be in the form of a written, Medallion signature guaranteed
letter.
41
◼
The
telephone redemption option does not apply to Shares held in an account
maintained and serviced by your Intermediary. If your Shares are held in an
account with an Intermediary, you should contact your registered representative
of record, who may make telephone redemptions on your behalf.
◼
The
telephone redemption option may be modified or terminated at any time without
prior notice.
◼
The Fund
may allow redemptions via check up to $50,000 in Class A, Class C, Investor and
Class R Shares requested via telephone.
Note:
It may be difficult to make telephone redemptions in times of unusual economic
or market conditions.
How Are Redemption
Proceeds Paid?
By
Wire: You may
arrange for your redemption proceeds to be paid as federal funds to an account
with your Intermediary or to a domestic bank account designated in the current
records of the Transfer Agent. In addition, redemption proceeds may be
transmitted through an electronic trading platform to an account with your
Intermediary. The following general policies govern wiring redemption
proceeds:
◼
Redemption
proceeds will normally be paid in federal funds, between one and two business
days (or such other times in accordance with the requirements of your
Intermediary) following receipt of a properly executed wire transfer redemption
request. In certain circumstances, however (such as unusual market conditions or
in cases of very large redemptions or excessive trading), it may take up to
seven days to pay redemption proceeds.
◼
Redemption
requests may only be postponed or suspended for longer than seven days as
permitted under Section 22(e) of the Investment Company Act of 1940 (the
“Investment Company Act”) if (i) the New York Stock Exchange is closed for
trading or trading is restricted; (ii) an emergency exists which makes the
disposal of securities owned by the Fund or the fair determination of the value
of the Fund’s net assets not reasonably practicable; or (iii) the SEC, by order
or regulation, permits the suspension of the right of
redemption.
◼
If you are
selling shares you recently paid for by check or purchased by Automated Clearing
House (“ACH”), the Fund will pay you when your check or ACH has cleared, which
may take up to 15 days.
◼
If the
Federal Reserve Bank is closed on the day that the redemption proceeds would
ordinarily be wired, wiring the redemption proceeds may be delayed until the
Federal Reserve Bank reopens.
◼
To change
the bank wiring instructions designated in the current records of the Transfer
Agent, you must send written instructions signed by an authorized person
designated in the current records of the Transfer Agent. A Medallion signature
guarantee may be required if you are requesting a redemption in conjunction with
the change.
◼
None of the
Trust, the Investment Adviser or Goldman Sachs assumes any responsibility for
the performance of your bank or Intermediary in the transfer process. If a
problem with such performance arises, you should deal directly with your bank or
Intermediary.
By
Check: You may
elect to receive your redemption proceeds by check. Redemption proceeds paid by
check will normally be mailed to the address of record within two business days
(or such other times in accordance with the requirements of your Intermediary)
following receipt of a properly executed redemption request, except in certain
circumstances (such as those set forth above with respect to wire transfer
redemption requests). If you are selling shares you recently paid for by check
or ACH, the Fund will pay you when your check or ACH has cleared, which may take
up to 15 days.
What Else Do I Need
To Know About Redemptions?
The
following generally applies to redemption requests:
◼
Additional
documentation may be required when deemed appropriate by the Transfer Agent. A
redemption request will not be in proper form until such additional
documentation has been received.
◼
Intermediaries
are responsible for the timely transmittal of redemption requests by their
customers to the Transfer Agent. In order to facilitate the timely transmittal
of redemption requests, Intermediaries may set times by which they must receive
redemption requests. Intermediaries may also require additional documentation
from you.
The Trust
reserves the right to:
◼
Redeem your
shares in the event your Intermediary’s relationship with Goldman Sachs is
terminated, and you do not transfer your account to another Intermediary or in
the event that the Fund is no longer an option in your Employee Benefit Plan or
no longer available through your Eligible Fee-Based Program.
◼
Redeem your
shares if your account balance is below the required Fund minimum. The Fund will
not redeem your shares on this basis if the value of your account falls below
the minimum account balance solely as a result of market conditions. The Fund
will give you 60 days prior written notice to allow you to purchase sufficient
additional shares of the Fund in order to avoid such redemption. Different rules
may apply to investors who have established brokerage accounts with Goldman
Sachs in accordance with the terms and conditions of their account
agreements.
42
Shareholder
Guide
◼
Redeem your
shares in the case of actual or suspected threatening conduct or actual or
suspected fraudulent, suspicious or illegal activity by you or any other
individual associated with your account.
◼
Subject to
applicable law, redeem your shares in other circumstances determined by the
Board of Trustees to be in the best interest of the Trust.
◼
Pay
redemptions by a distribution in-kind of securities (instead of cash). If you
receive redemption proceeds in-kind, you should expect to incur transaction
costs upon the disposition of those securities. In addition, if you receive
redemption proceeds in-kind, you will be subject to market gains or losses upon
the disposition of those securities.
◼
Reinvest
any amounts (e.g., dividends, distributions or redemption proceeds) which you
have elected to receive by check should your check remain uncashed for more than
180 days. No interest will accrue on amounts represented by uncashed checks.
Your check will be reinvested in your account at the NAV on the day of the
reinvestment. When reinvested, those amounts are subject to the risk of loss
like any Fund investment. If you elect to receive distributions in cash and a
check remains uncashed for more than 180 days, your cash election may be changed
automatically to reinvest and your future dividend and capital gains
distributions will be reinvested in the Fund at the NAV as of the date of
payment of the distribution. This provision may not apply to certain retirement
or qualified accounts, accounts with a non-U.S. address or closed accounts. Your
participation in a systematic withdrawal program may be terminated if a check
remains uncashed.
◼
Charge an
additional fee in the event a redemption is made via wire
transfer.
The Fund
typically expects to meet redemption requests by using holdings of cash or cash
equivalents and/or proceeds from the sale of portfolio holdings. In addition,
under stressed market conditions, as well as for other temporary or emergency
purposes, the Fund may distribute redemption proceeds in-kind (instead of cash),
access a line of credit or overdraft facility, or borrow through other sources
to meet redemption requests.
None of the
Trust, the Investment Adviser or Goldman Sachs will be responsible for any loss
in an investor’s account or tax liability resulting from an involuntary
redemption.
Can I Reinvest
Redemption Proceeds In The Same Or Another Goldman Sachs
Fund?
You may
redeem shares of the Fund and reinvest a portion or all of the redemption
proceeds in the same share class of another Goldman Sachs Fund at NAV. To be
eligible for this privilege, you must have held the shares you want to redeem
for at least 30 days and you must reinvest the share proceeds within 90 days
after you redeem. You should obtain and read the applicable prospectus before
investing in any other Goldman Sachs Fund.
You may
reinvest redemption proceeds as follows:
◼
If you pay
a CDSC upon redemption of Class A or Class C Shares and then reinvest in Class A
or Class C Shares of another Goldman Sachs Fund as described above, your account
will be credited with the amount of the CDSC you paid. The reinvested shares
will, however, continue to be subject to a CDSC. The holding period of the
shares acquired through reinvestment will include the holding period of the
redeemed shares for purposes of computing the CDSC payable upon a subsequent
redemption.
◼
The
reinvestment privilege may be exercised at any time in connection with
transactions in which the proceeds are reinvested at NAV in a tax-sheltered
Employee Benefit Plan. In other cases, the reinvestment privilege may be
exercised once per year upon receipt of a written request.
◼
You may be
subject to tax as a result of a redemption. You should consult your tax adviser
concerning the tax consequences of a redemption and
reinvestment.
Can I Exchange My
Investment From One Goldman Sachs Fund To Another Goldman Sachs
Fund?
You may
exchange shares of a Goldman Sachs Fund at NAV without the imposition of an
initial sales charge or CDSC, if applicable, at the time of exchange for certain
shares of another Goldman Sachs Fund. The exchange privilege may be materially
modified or withdrawn at any time upon 60 days’ written notice. You should
contact your Intermediary to arrange for exchanges of shares of the Fund for
shares of another Goldman Sachs Fund.
You should
keep in mind the following factors when making or considering an
exchange:
◼
You should
obtain and carefully read the prospectus of the Goldman Sachs Fund you are
acquiring before making an exchange. You should be aware that not all Goldman
Sachs Funds may offer all share classes.
◼
Currently,
the Fund does not impose any charge for exchanges although the Fund may impose a
charge in the future.
◼
The
exchanged shares of the new Goldman Sachs Fund may later be exchanged for shares
of the same class of the original Fund held at the next determined NAV without
the imposition of an initial sales charge or CDSC. However, if additional shares
of the new Goldman Sachs Fund were purchased after the initial exchange, and
that Fund’s shares do not impose a sales charge or CDSC, then the applicable
sales charge or CDSC of the original Fund’s shares will be imposed upon the
exchange of those shares.
43
◼
When you
exchange shares subject to a CDSC, no CDSC will be charged at that time.
However, for purposes of determining the amount of CDSC applicable to those
shares acquired in the exchange, the length of time you have owned the shares
will be measured from the date you acquired the original shares subject to a
CDSC, and the amount and terms of the CDSC will be those applicable to the
original shares acquired and will not be affected by a subsequent
exchange.
◼
Eligible
investors may exchange certain classes of shares for another class of shares of
the same Fund. For further information, contact your
Intermediary.
◼
All
exchanges which represent an initial investment in a Goldman Sachs Fund must
satisfy the minimum initial investment requirement of that Fund. This
requirement may be waived at the discretion of the Trust. Exchanges into a
Goldman Sachs Fund need not meet the traditional minimum investment requirement
for that Fund if the entire balance of the original Fund account is
exchanged.
◼
Exchanges
are available only in states where exchanges may be legally
made.
◼
It may be
difficult to make telephone exchanges in times of unusual economic or market
conditions.
◼
Goldman
Sachs and SS&C may use reasonable procedures described above in “How To Sell
Shares—What Do I Need To Know About Telephone Redemption Requests?” in an effort
to prevent unauthorized or fraudulent telephone exchange
requests.
◼
Normally, a
telephone exchange will be made only to an identically registered
account.
◼
Exchanges
into Goldman Sachs Funds or certain share classes of Goldman Sachs Funds that
are closed to new investors may be restricted.
For federal
income tax purposes, an exchange from one Goldman Sachs Fund to another is
treated as a redemption of the shares surrendered in the exchange, on which you
may be subject to tax, followed by a purchase of shares received in the
exchange. Exchanges within Employee Benefit Plan accounts will not result in
capital gains or loss for federal or state income tax purposes. You should
consult your tax adviser concerning the tax consequences of an
exchange.
|
Shareholder
Services |
Can I Arrange To Have
Automatic Investments Made On A Regular Basis?
You may be
able to make automatic investments in Class A and Class C Shares through your
bank via ACH transfer or via bank draft or through your Intermediary each month.
The minimum dollar amount for this service is $250 for the initial investment
and $50 per month for additional investments. Forms for this option are
available online at www.gsamfunds.com and from your Intermediary, or you may
check the appropriate box on the account application.
Can My Distributions
From The Fund Be Invested In Other Goldman Sachs Funds?
You may
elect to cross-reinvest distributions paid by a Goldman Sachs Fund in shares of
the same class of other Goldman Sachs Funds.
◼
Shares will
be purchased at NAV.
◼
You may
elect cross-reinvestment into an identically registered account or a similarly
registered account provided that at least one name on the account is registered
identically.
◼
You cannot
make cross-reinvestments into a Goldman Sachs Fund unless that Fund’s minimum
initial investment requirement is met.
◼
You should
obtain and read the prospectus of the Goldman Sachs Fund into which
distributions are invested.
Can I Arrange To Have
Automatic Exchanges Made On A Regular Basis?
You may
elect to exchange automatically a specified dollar amount of Class A or Class C
Shares of the Fund for shares of the same class of other Goldman Sachs
Funds.
◼
Shares will
be purchased at NAV if a sales charge had been imposed on the initial
purchase.
◼
You may
elect to exchange into an identically registered account or a similarly
registered account provided that at least one name on the account is registered
identically.
◼
Shares
subject to a CDSC acquired under this program may be subject to a CDSC at the
time of redemption from the Goldman Sachs Fund into which the exchange is made
depending upon the date and value of your original purchase.
◼
Automatic
exchanges are made monthly on the 15th day of each month or the first business
day thereafter.
◼
Minimum
dollar amount: $50 per month.
◼
You cannot
make automatic exchanges into a Goldman Sachs Fund unless that Fund’s minimum
initial investment requirement is met.
◼
You should
obtain and read the prospectus of the Goldman Sachs Fund into which automatic
exchanges are made.
◼
An exchange
is considered a redemption and a purchase and therefore may be a taxable
transaction.
44
Shareholder
Guide
Can I Have Systematic
Withdrawals Made On A Regular Basis?
You may
redeem from your Class A or Class C Share account systematically via check or
ACH transfer or through your Intermediary in any amount of $50 or
more.
◼
It is
normally undesirable to maintain a systematic withdrawal plan at the same time
that you are purchasing additional Class A or Class C Shares because of the
sales charges that are imposed on certain purchases of Class A Shares and
because of the CDSCs that are imposed on certain redemptions of Class A and
Class C Shares.
◼
Checks are
normally mailed within two business days after your selected systematic
withdrawal date of either the 15th or 25th of the month. ACH payments may take
up to three business days to post to your account after your selected systematic
withdrawal date between, and including, the 3rd and 26th of the
month.
◼
Each
systematic withdrawal is a redemption and therefore may be a taxable
transaction.
◼
The CDSC
applicable to Class A or Class C Shares redeemed under the systematic withdrawal
plan may be waived. The Fund reserves the right to limit such redemptions, on an
annual basis, to 12% each of the value of your Class C Shares and 10% of the
value of your Class A Shares.
What Types Of Reports
Will I Be Sent Regarding My Investment?
Intermediaries
are responsible for providing any communication from the Fund to shareholders,
including but not limited to, prospectuses, prospectus supplements, proxy
materials and notices regarding the source of dividend payments under Section 19
of the Investment Company Act. They may charge additional fees not described in
the Prospectus to their customers for such services.
You will be
provided with a printed confirmation of each transaction in your account and a
quarterly account statement if you invest in Class A, Class C, Investor or Class
R Shares and a monthly account statement if you invest in Institutional, Service
or Class R6 Shares. If your account is held through your Intermediary, you will
receive this information from your Intermediary.
You will
also receive an annual shareholder report containing audited financial
statements and a semi-annual shareholder report. If you have consented to the
delivery of a single copy of shareholder reports, prospectuses and other
information to all shareholders who share the same mailing address with your
account, you may revoke your consent at any time by contacting your Intermediary
or Goldman Sachs Funds at the appropriate phone number or address found on the
back cover of the Prospectus. The Fund will begin sending individual copies to
you within 30 days after receipt of your revocation. If your account is held
through an Intermediary, please contact the Intermediary to revoke your
consent.
|
Distribution
and Service Fees |
What Are The
Different Distribution And/Or Service Fees Paid By The Fund’s
Shares?
The Trust
has adopted distribution and service plans (each a “Plan”) under which Class A,
Class C and Class R Shares bear distribution and/or service fees paid to Goldman
Sachs, some of which Goldman Sachs may pay to Intermediaries. Intermediaries
seek distribution and/or servicing fee revenues to, among other things, offset
the cost of servicing small and medium sized plan investors and providing
information about the Fund. If the fees received by Goldman Sachs pursuant to
the Plans exceed its expenses, Goldman Sachs may realize a profit from these
arrangements. Goldman Sachs generally receives and pays the distribution and
service fees on a quarterly basis.
Under the
Plans, Goldman Sachs is entitled to a monthly fee from the Fund for distribution
services equal, on an annual basis, to 0.25%, 0.75% and 0.50% of each applicable
Fund’s average daily net assets attributed to Class A, Class C, and Class R
Shares, respectively. Because these fees are paid out of the Fund’s assets on an
ongoing basis, over time, these fees will increase the cost of your investment
and may cost you more than paying other types of such
charges.
The
distribution fees are subject to the requirements of Rule 12b-1 under the
Investment Company Act, and may be used (among other things)
for:
◼
Compensation
paid to and expenses incurred by Intermediaries, Goldman Sachs and their
respective officers, employees and sales representatives;
◼
Commissions
paid to Intermediaries;
◼
Allocable
overhead;
◼
Telephone
and travel expenses;
◼
Interest
and other costs associated with the financing of such compensation and
expenses;
◼
Printing of
prospectuses for prospective shareholders;
◼
Preparation
and distribution of sales literature or advertising of any type;
and
◼
All other
expenses incurred in connection with activities primarily intended to result in
the sale of Class A, Class C and Class R Shares.
45
In
connection with the sale of Class C Shares, Goldman Sachs normally begins paying
the 0.75% distribution fee as an ongoing commission to Intermediaries after the
shares have been held for one year. Goldman Sachs normally begins accruing the
annual 0.25% and 0.50% distribution fees for the Class A and Class R Shares,
respectively, as ongoing commissions to Intermediaries, immediately. Goldman
Sachs generally pays the distribution fee on a quarterly basis.
|
Class
C Personal And Account Maintenance
Services
And Fees |
Under the
Class C Plan, Goldman Sachs is also entitled to receive a separate fee equal on
an annual basis to 0.25% of each applicable Fund’s average daily net assets
attributed to Class C Shares. This fee is for personal and account maintenance
services, and may be used to make payments to Goldman Sachs, Intermediaries and
their officers, sales representatives and employees for responding to inquiries
of, and furnishing assistance to, shareholders regarding ownership of their
shares or their accounts or similar services not otherwise provided on behalf of
the Fund. If the fees received by Goldman Sachs pursuant to the Plan exceed its
expenses, Goldman Sachs may realize a profit from this
arrangement.
In
connection with the sale of Class C Shares, Goldman Sachs normally begins paying
the 0.25% ongoing service fee to Intermediaries after the shares have been held
for one year.
|
Service
Shares Service Plan And Shareholder
Administration
Plan |
The Trust,
on behalf of the Funds offering Service Shares, has adopted a Service Plan and
Shareholder Administration Plan for Service Shares, pursuant to which Goldman
Sachs and certain Intermediaries are entitled to receive payments for their
services from the Trust. These payments are equal to 0.25% (annualized) for
personal and account maintenance services, plus an additional 0.25% (annualized)
for shareholder administration services of the average daily net assets of
Service Shares of the Fund that are attributable to or held in the name of
Goldman Sachs or an Intermediary for its customers. Fees for personal and
account maintenance services are paid pursuant to the Service Shares’ Service
Plan and are subject to the requirements of Rule 12b-1 under the Investment
Company Act. Because these fees are paid out of the Fund’s assets on an ongoing
basis, over time, these fees will increase the cost of your investment and may
cost you more than paying other types of such charges.
|
Restrictions
on Excessive Trading
Practices |
Policies
and Procedures on Excessive Trading Practices. In
accordance with the policy adopted by the Board of Trustees, the Trust
discourages frequent purchases and redemptions of Fund shares and does not
permit market timing or other excessive trading practices. Purchases and
exchanges should be made with a view to longer-term investment purposes only
that are consistent with the investment policies and practices of the respective
Fund. Excessive, short-term (market timing) trading practices may disrupt
portfolio management strategies, increase brokerage and administrative costs,
harm Fund performance and result in dilution in the value of Fund shares held by
longer-term shareholders. The Trust and Goldman Sachs reserve the right to
reject or restrict purchase or exchange requests from any investor. The Trust
and Goldman Sachs will not be liable for any loss resulting from rejected
purchase or exchange orders. To minimize harm to the Trust and its shareholders
(or Goldman Sachs), the Trust (or Goldman Sachs) will exercise this right if, in
the Trust’s (or Goldman Sachs’) judgment, an investor has a history of excessive
trading or if an investor’s trading, in the judgment of the Trust (or Goldman
Sachs), has been or may be disruptive to the Fund. In making this judgment,
trades executed in multiple accounts under common ownership or control may be
considered together to the extent they can be identified. No waivers of the
provisions of the policy established to detect and deter market timing and other
excessive trading activity are permitted that would harm the Trust or its
shareholders or would subordinate the interests of the Trust or its shareholders
to those of Goldman Sachs or any affiliated person or associated person of
Goldman Sachs.
As a
deterrent to excessive trading, many foreign equity securities held by the
Goldman Sachs Funds are priced by an independent pricing service using fair
valuation. For more information on fair valuation, please see “How To Buy
Shares—How Are Shares Priced?”
Pursuant to
the policy adopted by the Board of Trustees of the Trust, Goldman Sachs has
developed criteria that it uses to identify trading activity that may be
excessive. Excessive trading activity in the Fund is measured by the number of
“round trip” transactions in a shareholder’s account. A “round trip” includes a
purchase or exchange into the Fund followed or preceded by a redemption or
exchange out of the same Fund. If the Fund detects that a shareholder has
completed two or more round trip transactions in a single Fund within a rolling
90-day period, the Fund may reject or restrict subsequent purchase or exchange
orders by that shareholder permanently. In addition, the Fund may, in its sole
discretion, permanently reject or restrict purchase or exchange orders by a
shareholder if the Fund detects other trading activity that is deemed to be
disruptive to the management of the Fund or otherwise harmful to the Fund. For
purposes of these transaction surveillance procedures, the Fund may consider
trading activity in multiple
46
Shareholder
Guide
accounts
under common ownership, control, or influence. A shareholder that has been
restricted from participation in the Fund pursuant to this policy will be
allowed to apply for re-entry after one year. A shareholder applying for
re-entry must provide assurances acceptable to the Fund that the shareholder
will not engage in excessive trading activities in the future.
Goldman
Sachs may modify its surveillance procedures and criteria from time to time
without prior notice regarding the detection of excessive trading or to address
specific circumstances. Goldman Sachs will apply the criteria in a manner that,
in Goldman Sachs’ judgment, will be uniform.
Fund shares
may be held through omnibus arrangements maintained by Intermediaries, such as
broker-dealers, investment advisers and insurance companies. In addition, Fund
shares may be held in omnibus Employee Benefit Plans, Eligible Fee-Based
Programs and other group accounts. Omnibus accounts include multiple investors
and such accounts typically provide the Fund with a net purchase or redemption
request on any given day where the purchases and redemptions of Fund shares by
the investors are netted against one another. The identity of individual
investors whose purchase and redemption orders are aggregated are ordinarily not
tracked by the Fund on a regular basis. A number of these Intermediaries may not
have the capability or may not be willing to apply the Fund’s market timing
policies. While Goldman Sachs may monitor share turnover at the omnibus account
level, the Fund’s ability to monitor and detect market timing by shareholders in
these omnibus accounts may be limited in certain circumstances, and certain of
these Intermediaries may charge the Fund a fee for providing certain shareholder
financial information requested as part of the Fund’s surveillance process. The
netting effect makes it more difficult to identify, locate and eliminate market
timing activities. In addition, those investors who engage in market timing and
other excessive trading activities may employ a variety of techniques to avoid
detection. There can be no assurance that the Fund and Goldman Sachs will be
able to identify all those who trade excessively or employ a market timing
strategy, and curtail their trading in every instance. If necessary, the Trust
may prohibit additional purchases of Fund shares by an Intermediary or by
certain customers of the Intermediary. Intermediaries may also monitor their
customers’ trading activities in the Fund. The criteria used by Intermediaries
to monitor for excessive trading may differ from the criteria used by the Fund.
If an Intermediary fails to cooperate in the implementation or enforcement of
the Trust’s excessive trading policies, the Trust may take certain actions
including terminating the relationship.
47
Taxation
As with any
investment, you should consider how your investment in the Fund will be taxed.
The tax information below is provided as general information. More tax
information is available in the SAI. You should consult your tax adviser about
the federal, state, local or foreign tax consequences of your investment in the
Fund. Except as otherwise noted, the tax information provided assumes that you
are a U.S. citizen or resident.
Unless your
investment is through an Employee Benefit Plan or other tax-advantaged account,
you should carefully consider the possible tax consequences of Fund
distributions and the sale of your Fund shares.
|
DISTRIBUTIONS |
The Fund
contemplates declaring as dividends each year all or substantially all of its
taxable income. Distributions you receive from the Fund are generally subject to
federal income tax, and may also be subject to state or local taxes. This is
true whether you reinvest your distributions in additional Fund shares or
receive them in cash. For federal tax purposes, the Fund's distributions
attributable to net investment income and short-term capital gains are taxable
to you as ordinary income, while any distributions of long-term capital gains
are taxable to you as long-term capital gains, no matter how long you have owned
your Fund shares.
Under
current provisions of the Code, the maximum individual rate applicable to
long-term capital gains is 15% or 20%, depending on whether the individual's
income exceeds certain threshold amounts. Fund distributions to noncorporate
shareholders attributable to dividends received by the Fund from U.S. and
certain qualified foreign corporations will generally be taxed at the
preferential rates described above, as long as certain other requirements are
met. For these lower rates to apply, the noncorporate shareholder must own the
relevant Fund shares for at least 61 days during the 121-day period beginning 60
days before the Fund’s ex-dividend date. The amount of the Fund’s distributions
that would otherwise qualify for this favorable tax treatment will be reduced as
a result of the Fund’s securities lending activities or high portfolio turnover
rate.
The
International Equity Income Fund’s income or loss each year from writing index
call options will, generally, be treated as short-term capital gain or
loss.
Distributions
in excess of the Fund’s current and accumulated earnings and profits are treated
as a tax-free return of your investment to the extent of your basis in the
shares, and generally as capital gain thereafter. A return of capital, which for
tax purposes is treated as a return of your investment, reduces your basis in
shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition of shares. A distribution will reduce the Fund’s NAV per share and
may be taxable to you as ordinary income or capital gain even though, from an
economic standpoint, the distribution may constitute a return of
capital.
An
additional 3.8% Medicare tax is imposed on certain net investment income
(including ordinary dividends and capital gain distributions received from the
Fund and net gains from redemptions or other taxable dispositions of Fund
shares) of U.S. individuals, estates and trusts to the extent that such person’s
“modified adjusted gross income” (in the case of an individual) or “adjusted
gross income” (in the case of an estate or trust) exceeds certain threshold
amounts.
The Fund’s
transactions in derivatives (such as futures contracts and swaps) will be
subject to special tax rules, the effect of which may be to accelerate income to
the Fund, defer losses to the Fund, cause adjustments in the holding periods of
the Fund’s securities and convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount, timing and
character of distributions to you. The Fund’s use of derivatives may result in
the Fund realizing more short-term capital gains and ordinary income subject to
tax at ordinary income tax rates than it would if it did not use
derivatives.
Because of
the International Equity Income Fund’s practice of writing call options on the
MSCI EAFE Index, other national or regional indices or related ETFs, the
possibility exists that an overlap between the Fund’s equity investments and the
components of the indices, if substantial enough, might cause a deferral of the
Fund’s recognition of losses for tax purposes or a reduction in the amount of
the Fund’s distributions that qualify for the favorable tax rate applicable to
dividends. The Fund intends to manage its investments in a manner designed to
avoid these adverse tax results to the extent reasonably practicable, but there
is no assurance that the Fund will accomplish this objective at all
times.
Although
distributions are generally treated as taxable to you in the year they are paid,
distributions declared in October, November or December but paid in January are
taxable as if they were paid in December. It is not anticipated that any
significant percentage of the Fund’s dividends paid will be eligible for
dividends-received deduction. This percentage may further be reduced as a result
of the Fund’s securities lending activities or by a high portfolio turnover
rate. Character and tax status of all distributions will be available to
shareholders after the close of each calendar year.
48
Taxation
The The
Fund may be subject to foreign withholding or other foreign taxes on income or
gain from certain foreign securities. In general, the Fund may deduct these
taxes in computing its taxable income. Rather than deducting these foreign
taxes, the Fund may make an election to treat a proportionate amount of those
taxes as constituting a distribution to each shareholder, which would generally
allow you either (i) to credit that proportionate amount of taxes against your
U.S. Federal income tax liability as a foreign tax credit or (ii) to take that
amount as an itemized deduction.