UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-5349
Goldman Sachs Trust
(Exact name of registrant as specified in charter)
71 South Wacker Drive, Suite 500, Chicago, Illinois 60606
(Address of principal executive offices) (Zip code)
Peter V. Bonanno | Copies to: | |
Goldman, Sachs & Co. | Jeffrey A. Dalke, Esq. | |
One New York Plaza | Drinker Biddle & Reath LLP | |
New York, New York 10004 | One Logan Square | |
18th and Cherry Streets | ||
Philadelphia, PA 19103 | ||
(Name and address of agents for service) |
Registrant’s telephone number, including area code: (312) 655-4400
Date of fiscal year end: August 31
Date of reporting period: February 28, 2006
ITEM 1. | REPORTS TO STOCKHOLDERS. | |
The Semi–Annual Report to Stockholders is filed herewith. |
RESEARCH SELECT FUNDSM | Semiannual Report February 28, 2006 |
Long-term growth of capital potential through a focused portfolio of U.S. equity investments | |||
Asset Management |
Goldman Sachs Research Select FundSM
The Research Select Fund invests primarily in U.S. equity investments and is subject to market risk so that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular industry sectors and/or general economic conditions.The Fund may invest in securities of any capitalization, including mid-cap and small-cap companies, which involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. |
NOT FDIC-INSURED | May Lose Value | No Bank Guarantee | ||
How Is the Goldman Sachs
Research Select Fund Constructed?
Through this Fund, investors can access the best research ideas of the Goldman Sachs Value and Growth investment teams.
Research Select Fund
Dear Shareholder,
This report provides an overview on the performance of the Goldman Sachs Research Select Fund during the six-month reporting period that ended February 28, 2006.
Performance Review
Over the six-month period that ended February 28, 2006, the Fund’s Class A, B, C, Institutional and Service Shares generated cumulative total returns, without sales charges, of 6.84%, 6.52%, 6.52%, 7.20% and 7.45%, respectively. These returns compare to the 5.93% cumulative total return of the Fund’s benchmark, the S&P 500 Index (with dividends reinvested), over the same time period. | |
The Fund generated positive returns and outperformed its benchmark during the reporting period. From a growth stock perspective, the portfolio benefited from stock selection in the Energy sector and select holdings in a number of other sectors. Conversely, weakness in select Health Care companies and an underweight in the Consumer Cyclicals sector detracted from results. | |
From a value stock perspective, the portfolio benefited from stock selection in the Energy and Consumer Discretionary industries. Conversely, weakness in Consumer Cyclicals, Health Care and Utilities detracted from performance. | |
In terms of growth-oriented Energy stocks, strong Fund performers included Schlumberger Ltd., Baker Hughes, Inc. and Suncor Energy, Inc. Schlumberger declared a 2-for-1 stock split and increased its dividend by nearly 20% during the period. In addition to this shareholder-friendly action, the company reported full-year earnings results that surpassed consensus expectations. Similarly, Baker Hughes benefited from the industry’s increased efforts to find hydrocarbons, as well as several analyst upgrades. Oil sands company Suncor Energy finished 2005 strongly as output increased and its profits doubled during the fourth quarter. Oil sands companies are characterized as non-conventional oil companies since they primarily mine tar sands to obtain oil versus conventional oil companies that use a traditional well-based method. Until recently, removing oil from tar sands was not believed to be a profitable venture, but we believe that has changed over the past few years with the development of lower-cost extraction methods, combined with higher oil prices. In the beginning of 2006, the company’s output was cut in half by a fire, but it recovered quickly. Elsewhere, Freddie Mac rallied during the period as it announced a $2 billion stock buyback plan. We believe this indicates that Freddie Mac is focused on strengthening its business. Freddie Mac currently holds an additional $4.8 billion in excess capital above the imposed capital surcharge. | |
Detracting from the growth portion of the portfolio were several stocks, including Cendant Corp. Cendant announced plans to break up the company into four parts and downwardly revised its earnings guidance for the fourth quarter of 2005 and 2006, citing weakness in its travel businesses. Its stock fell sharply on the news. In terms of the restructuring, we think that it is to Cendant’s advantage to break up the company, as we believe the conglomerate strategy has been a factor in Cendant’s lagging stock price. | |
In terms of the value portion of the portfolio, Burlington Resources, Inc. enhanced results as its shares rose sharply during the reporting period. While we are positive on the |
fundamentals for North American natural gas and supply/demand trends, Energy companies differ widely in their capital allocation disciplines and effectiveness in growing their reserves. We continue to favor Energy companies with strong, shareholder-oriented management teams, quality reserves, high returns on invested capital and low cost structures. Burlington Resources has a management team that we believe is executing well from an operating and a financial standpoint. | |
An example of a stock in the value portion of the portfolio that detracted from results was Health Care company Amgen, Inc. While Amgen was one of our top performers in 2005, its shares fell during the period. Despite this recent weakness, we continue to find Amgen to be attractively valued relative to its industry peers. In addition, we continue to believe in the strong leadership of the company’s management team, which recently raised its share buyback plan. |
SECTOR ALLOCATION AS OF 2/28/06 |
The percentage shown for each investment category reflects the value of investments in that category as a percentage of market value. Short-term investments include repurchase agreements. |
Portfolio Positioning
The Goldman Sachs Research Select Fund is a U.S. large-cap portfolio that blends the “best ideas” from Goldman Sachs Asset Management’s Growth and Value Investment Teams. During the reporting period, these teams continued to utilize their disciplined investment process to seek compelling investment opportunities. Throughout the period, the Fund continued to be style neutral. |
Portfolio Highlights
During the reporting period, there were a number of holdings that enhanced results, including the following: | |
n | J.C. Penney Co., Inc. — In Consumer Cyclicals, J.C. Penney was a positive contributor to performance. We believe recent progress in the company’s turnaround, including share buybacks and improved operating results, lifted the stock to higher levels. While the turnaround has been impressive to date, we feel company management remains keenly focused on improving operating margins and store productivity. |
n | The McGraw-Hill Cos., Inc. — Ratings agency McGraw-Hill, which owns Standard & Poor’s (S&P), performed well during the period. Its business meets our investment criteria as it operates in an industry environment that can be characterized as quasi-monopolistic or a “partnership-monopoly.” This is because most issuers tend to have at least two ratings, one from S&P and one from Moody’s. The two companies rate approximately 90% of the debt issuance in the U.S. We believe McGraw Hill’s growth is supported by favorable secular trends such as the globalization of capitalism, deregulation and financial innovation. |
n | Caremark Rx, Inc. — Caremark Rx, a pharmacy benefit manager, contributed to performance during the period. At the end of 2005, the company announced a 34% rise in third quarter earnings as a result of strength in its mail order and generic pharmaceutical divisions. In addition, the company provided an outlook for its operations in 2006 that was in line with expectations. Caremark designs and administers programs for reducing drug costs, primarily by designing drug formularies and mail order prescriptions. |
We thank you for your investment and look forward to your continued confidence. | |
Goldman Sachs Growth and Value Investment Teams | |
New York, March 17, 2006 |
Research Select Fund
PERFORMANCE REVIEW |
September 1, 2005–February 28, 2006 | Fund Total Return (based on NAV)1 | S&P 500 Index2 | ||||||||
Class A | 6.84 | % | 5.93 | % | ||||||
Class B | 6.52 | 5.93 | ||||||||
Class C | 6.52 | 5.93 | ||||||||
Institutional | 7.20 | 5.93 | ||||||||
Service | 7.45 | 5.93 | ||||||||
1 | The net asset value (NAV) represents the net assets of the class of the Fund (ex-dividend) divided by the total number of shares of the class outstanding. The Fund’s performance reflects the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges. |
2 | The S&P 500 Index is the Standard & Poor’s 500 Composite Index of 500 stocks, an unmanaged index of common stock prices. The Index figures do not include any deduction for fees, expenses or taxes. It is not possible to invest directly in an unmanaged index. |
STANDARDIZED TOTAL RETURNS3 |
For the period ended 12/31/05 | One Year | Five Years | Since Inception | Inception Date | ||||||||||||
Class A | -2.56 | % | -6.19 | % | -6.67 | % | 6/19/00 | |||||||||
Class B | -2.64 | -6.19 | -6.58 | 6/19/00 | ||||||||||||
Class C | 1.36 | -5.83 | -6.41 | 6/19/00 | ||||||||||||
Institutional | 3.44 | -4.75 | -5.35 | 6/19/00 | ||||||||||||
Service | 3.44 | -5.12 | -5.71 | 6/19/00 | ||||||||||||
3 | The Standardized Total Returns are average annual total returns as of the most recent calendar quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 5.5% for Class A Shares, the assumed contingent deferred sales charge for Class B Shares (5% maximum declining to 0% after six years) and the assumed contingent deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns. |
The returns represent past performance. Past performance does not guarantee future results. The Fund’s investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. Please visit our Web site at: www.gs.com/funds to obtain the most recent month-end returns. Performance reflects expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
TOP 10 HOLDINGS AS OF 2/28/064 |
Holding | % of Net Assets | Line of Business | ||||||
Burlington Resources, Inc. | 4.1 | % | Natural Gas | |||||
Exxon Mobil Corp. | 4.0 | Oil & Gas | ||||||
Freddie Mac | 3.8 | Specialty Finance | ||||||
PepsiCo, Inc. | 3.2 | Beverages | ||||||
Microsoft Corp. | 3.2 | Computer Software | ||||||
Exelon Corp. | 3.1 | Electrical Utilities | ||||||
QUALCOMM, Inc. | 3.1 | Semiconductors | ||||||
The McGraw-Hill Companies, Inc. | 3.0 | Commercial Services | ||||||
Bank of America Corp. | 3.0 | Banks | ||||||
Schlumberger Ltd. | 3.0 | Oil Well Services & Equipment | ||||||
4 | The top 10 holdings may not be representative of the Fund’s future investments. |
Statement of Investments
Shares | Description | Value | ||||||||
Common Stocks – 97.8% | ||||||||||
Aerospace & Defense – 4.0% | ||||||||||
31,837 | General Dynamics Corp. | $ | 3,924,547 | |||||||
46,930 | United Technologies Corp. | 2,745,405 | ||||||||
6,669,952 | ||||||||||
Banks – 9.4% | ||||||||||
109,274 | Bank of America Corp. | 5,010,213 | ||||||||
119,557 | J.P. Morgan Chase & Co. | 4,918,575 | ||||||||
49,367 | Washington Mutual, Inc. | 2,107,971 | ||||||||
55,534 | Wells Fargo & Co. | 3,565,282 | ||||||||
15,602,041 | ||||||||||
Beverages – 3.2% | ||||||||||
90,800 | PepsiCo, Inc. | 5,367,188 | ||||||||
Biotechnology – 2.0% | ||||||||||
43,326 | Amgen, Inc.* | 3,270,680 | ||||||||
Broadcasting & Cable/ Satellite TV – 0.0% | ||||||||||
740 | CBS Corp. Class B | 18,100 | ||||||||
Commercial Services – 3.0% | ||||||||||
95,410 | The McGraw-Hill Cos., Inc. | 5,065,317 | ||||||||
Computer Services – 2.8% | ||||||||||
104,680 | First Data Corp. | 4,724,208 | ||||||||
Computer Software – 6.5% | ||||||||||
30,410 | Electronic Arts, Inc.* | 1,580,408 | ||||||||
196,915 | Microsoft Corp. | 5,297,013 | ||||||||
313,257 | Oracle Corp.* | 3,890,652 | ||||||||
10,768,073 | ||||||||||
Drugs & Medicine – 1.6% | ||||||||||
61,700 | Abbott Laboratories | 2,725,906 | ||||||||
Electric Utilities – 3.1% | ||||||||||
89,890 | Exelon Corp. | 5,133,618 | ||||||||
Foods – 1.8% | ||||||||||
48,000 | Wm. Wrigley Jr. Co. | 3,049,920 | ||||||||
Gaming/ Lodging – 2.9% | ||||||||||
107,460 | Cendant Corp. | 1,785,985 | ||||||||
41,290 | Harrah’s Entertainment, Inc. | 2,969,577 | ||||||||
4,755,562 | ||||||||||
Home Building & Related – 0.8% | ||||||||||
31,755 | American Standard Companies, Inc. | 1,256,863 | ||||||||
Household/ Personal Care – 1.7% | ||||||||||
45,733 | Procter & Gamble Co. | 2,740,779 | ||||||||
Insurance – 3.3% | ||||||||||
37,900 | AMBAC Financial Group, Inc. | 2,848,185 | ||||||||
39,837 | XL Capital Ltd. | 2,690,989 | ||||||||
5,539,174 | ||||||||||
Internet & Online – 1.0% | ||||||||||
4,710 | Google, Inc.* | 1,707,940 | ||||||||
Medical Products – 5.5% | ||||||||||
92,448 | Baxter International, Inc. | 3,499,157 | ||||||||
36,980 | Medtronic, Inc. | 1,995,071 | ||||||||
47,640 | Stryker Corp. | 2,201,921 | ||||||||
20,190 | Zimmer Holdings, Inc.* | 1,396,744 | ||||||||
9,092,893 | ||||||||||
Movies & Entertainment – 2.5% | ||||||||||
25,103 | The Walt Disney Co. | 702,633 | ||||||||
122,170 | Time Warner, Inc. | 2,114,763 | ||||||||
34,450 | Viacom, Inc. Class B* | 1,376,622 | ||||||||
4,194,018 | ||||||||||
Natural Gas – 4.1% | ||||||||||
75,338 | Burlington Resources, Inc. | 6,793,981 | ||||||||
Networking/ Telecommunication Equipment – 2.6% | ||||||||||
215,280 | Cisco Systems, Inc.* | 4,357,267 | ||||||||
Oil & Gas – 6.9% | ||||||||||
42,230 | Canadian Natural Resources Ltd. | 2,304,069 | ||||||||
113,431 | Exxon Mobil Corp. | 6,734,398 | ||||||||
32,670 | Suncor Energy, Inc. | 2,442,083 | ||||||||
11,480,550 | ||||||||||
Oil Well Services & Equipment – 5.3% | ||||||||||
57,712 | Baker Hughes, Inc. | 3,922,685 | ||||||||
42,950 | Schlumberger Ltd. | 4,939,250 | ||||||||
8,861,935 | ||||||||||
Pharmacy Benefit Manager – 2.0% | ||||||||||
67,400 | Caremark Rx, Inc.* | 3,353,150 | ||||||||
Retailing – 5.6% | ||||||||||
38,747 | J. C. Penney Co., Inc. | 2,272,124 | ||||||||
62,540 | Lowe’s Companies, Inc. | 4,263,977 | ||||||||
62,000 | Wal-Mart Stores, Inc. | 2,812,320 | ||||||||
9,348,421 | ||||||||||
Semiconductors – 4.5% | ||||||||||
66,270 | Linear Technology Corp. | 2,442,712 | ||||||||
108,380 | QUALCOMM, Inc. | 5,116,620 | ||||||||
7,559,332 | ||||||||||
Specialty Finance – 7.4% | ||||||||||
47,910 | American Express Co. | 2,581,391 | ||||||||
96,700 | Countrywide Financial Corp. | 3,334,216 | ||||||||
94,400 | Freddie Mac | 6,361,616 | ||||||||
12,277,223 | ||||||||||
Telecommunications – 3.0% | ||||||||||
104,660 | American Tower Corp.* | 3,331,328 | ||||||||
23,450 | Research In Motion Ltd.* | 1,653,928 | ||||||||
4,985,256 | ||||||||||
Telephone Utilities – 0.9% | ||||||||||
55,408 | AT&T, Inc. | 1,528,707 | ||||||||
6
Shares | Description | Value | ||||||||
Common Stocks – (continued) | ||||||||||
Tobacco – 0.4% | ||||||||||
9,934 | Altria Group, Inc. | $ | 714,255 | |||||||
TOTAL COMMON STOCKS | ||||||||||
(Cost $136,184,553) | $ | 162,942,309 | ||||||||
Principal | Interest | Maturity | ||||||||||||||
Amount | Rate | Date | Value | |||||||||||||
Repurchase Agreement – 2.0% | ||||||||||||||||
Joint Repurchase Agreement Account II(a) | ||||||||||||||||
$ | 3,300,000 | 4.57 | % | 03/01/2006 | $ | 3,300,000 | ||||||||||
Maturity Value: $3,300,419 | ||||||||||||||||
(Cost $3,300,000) | ||||||||||||||||
TOTAL INVESTMENTS – 99.8% | ||||||||||||||||
(Cost $139,484,553) | $ | 166,242,309 | ||||||||||||||
The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. |
* | Non-income producing security. | |
(a) | Joint repurchase agreement was entered into on February 28, 2006. |
ADDITIONAL INVESTMENT INFORMATION |
JOINT REPURCHASE AGREEMENT ACCOUNT II — At February 28, 2006, the Fund had an undivided interest in the following Joint Repurchase Agreement Account II which equaled $3,300,000 in principal amount.
Principal | Interest | Maturity | Maturity | |||||||||||
Repurchase Agreements | Amount | Rate | Date | Value | ||||||||||
Banc of America Securities LLC | $ | 3,019,900,000 | 4.56 | % | 03/01/2006 | $ | 3,020,282,521 | |||||||
Barclays Capital PLC | 3,000,000,000 | 4.57 | 03/01/2006 | 3,000,380,833 | ||||||||||
Credit Suisse First Boston LLC | 500,000,000 | 4.57 | 03/01/2006 | 500,063,472 | ||||||||||
Deutsche Bank Securities, Inc. | 3,020,000,000 | 4.57 | 03/01/2006 | 3,020,383,372 | ||||||||||
Greenwich Capital Markets | 300,000,000 | 4.58 | 03/01/2006 | 300,038,167 | ||||||||||
J.P. Morgan Securities, Inc. | 400,000,000 | 4.56 | 03/01/2006 | 400,050,667 | ||||||||||
Morgan Stanley & Co. | 2,925,000,000 | 4.57 | 03/01/2006 | 2,925,371,312 | ||||||||||
UBS Securities LLC | 1,500,000,000 | 4.57 | 03/01/2006 | 1,500,190,417 | ||||||||||
Wachovia Capital Markets | 400,000,000 | 4.58 | 03/01/2006 | 400,050,889 | ||||||||||
TOTAL | $ | 15,064,900,000 | $ | 15,066,811,650 | ||||||||||
7
Statement of Assets and Liabilities
Assets: | |||||||||
Investment in securities, at value (identified cost $139,484,553) | $ | 166,242,309 | |||||||
Cash | 33,377 | ||||||||
Receivables: | |||||||||
Investment securities sold | 2,710,819 | ||||||||
Dividends and interest | 164,590 | ||||||||
Fund shares sold | 6,398 | ||||||||
Reimbursement from adviser | 5,152 | ||||||||
Other assets | 1,324 | ||||||||
Total assets | 169,163,969 | ||||||||
Liabilities: | |||||||||
Payables: | |||||||||
Investment securities purchased | 1,739,057 | ||||||||
Fund shares repurchased | 521,017 | ||||||||
Amounts owed to affiliates | 242,618 | ||||||||
Accrued expenses | 118,183 | ||||||||
Total liabilities | 2,620,875 | ||||||||
Net Assets: | |||||||||
Paid-in capital | 546,957,102 | ||||||||
Accumulated undistributed net investment loss | (327,618 | ) | |||||||
Accumulated net realized loss on investment transactions | (406,844,146 | ) | |||||||
Net unrealized gain on investments | 26,757,756 | ||||||||
NET ASSETS | $ | 166,543,094 | |||||||
Net Assets: | |||||||||
Class A | $ | 55,028,423 | |||||||
Class B | 79,065,740 | ||||||||
Class C | 30,426,579 | ||||||||
Institutional | 2,020,972 | ||||||||
Service | 1,380 | ||||||||
Shares Outstanding: | |||||||||
Class A | 7,335,812 | ||||||||
Class B | 11,001,525 | ||||||||
Class C | 4,230,354 | ||||||||
Institutional | 263,649 | ||||||||
Service | 184 | ||||||||
Total shares of beneficial interest outstanding, $0.001 par value (unlimited shares authorized) | 22,831,524 | ||||||||
Net asset value, offering and redemption price per share:(a) | |||||||||
Class A | $7.50 | ||||||||
Class B | 7.19 | ||||||||
Class C | 7.19 | ||||||||
Institutional | 7.67 | ||||||||
Service | 7.50 | ||||||||
(a) | Maximum public offering price per share (NAV per share multiplied by 1.0582) for Class A Shares is $7.94. At redemption, Class B and Class C Shares may be subject to a contingent deferred sales charge, assessed on the amount equal to the lesser of the current net asset value or the original purchase price of the shares. |
8
Statement of Operations
Investment income: | ||||||
Dividends(a) | $ | 1,315,968 | ||||
Interest (including securities lending income of $225) | 48,306 | |||||
Total income | 1,364,274 | |||||
Expenses: | ||||||
Management fees | 881,914 | |||||
Distribution and Service fees(b) | 653,531 | |||||
Transfer agent fees(c) | 166,095 | |||||
Custody and accounting fees | 50,101 | |||||
Professional fees | 28,574 | |||||
Registration fees | 19,597 | |||||
Trustee fees | 7,138 | |||||
Service Share fees | 24 | |||||
Other | 3,964 | |||||
Total expenses | 1,810,938 | |||||
Less — expense reductions | (97,981 | ) | ||||
Net expenses | 1,712,957 | |||||
NET INVESTMENT LOSS | (348,683 | ) | ||||
Realized and unrealized gain (loss) on investment transactions: | ||||||
Net realized gain from investment transactions (including commissions recaptured of $11,935) | 13,227,589 | |||||
Net change in unrealized gain (loss) on investments | (1,603,392 | ) | ||||
Net realized and unrealized gain on investment transactions | 11,624,197 | |||||
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 11,275,514 | ||||
(a) | Foreign taxes withheld on dividends were $778. |
(b) | Class A, Class B and Class C Shares had Distribution and Service fees of $72,864, $421,571 and $159,096, respectively. |
(c) | Class A, Class B, Class C, Institutional Class and Service Class Shares had Transfer agent fees of $55,376, $80,099, $30,228, $390 and $2, respectively. |
9
Statements of Changes in Net Assets
For the | ||||||||||
Six Months Ended | For the | |||||||||
February 28, 2006 | Year Ended | |||||||||
(Unaudited) | August 31, 2005 | |||||||||
From operations: | ||||||||||
Net investment income (loss) | $ | (348,683 | ) | $ | 1,459 | |||||
Net realized gain from investment transactions | 13,227,589 | 32,713,329 | ||||||||
Net change in unrealized gain (loss) on investments | (1,603,392 | ) | (10,461,220 | ) | ||||||
Net increase in net assets resulting from operations | 11,275,514 | 22,253,568 | ||||||||
Distributions to shareholders: | ||||||||||
From net investment income | ||||||||||
Institutional Shares | (1,463 | ) | — | |||||||
Total distributions to shareholders | (1,463 | ) | — | |||||||
From share transactions: | ||||||||||
Proceeds from sales of shares | 1,769,529 | 9,893,325 | ||||||||
Reinvestment of dividends and distributions | 1,322 | — | ||||||||
Cost of shares repurchased | (37,135,551 | ) | (87,632,589 | ) | ||||||
Net decrease in net assets resulting from share transactions | (35,364,700 | ) | (77,739,264 | ) | ||||||
TOTAL DECREASE | (24,090,649 | ) | (55,485,696 | ) | ||||||
Net assets: | ||||||||||
Beginning of period | 190,633,743 | 246,119,439 | ||||||||
End of period | $ | 166,543,094 | $ | 190,633,743 | ||||||
Accumulated undistributed net investment income (loss) | $ | (327,618 | ) | $ | 22,528 | |||||
10
Notes to Financial Statements
1. ORGANIZATION |
Goldman Sachs Trust (the “Trust”) is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended, (“the Act”) as an open-end management investment company. The Trust includes the Goldman Sachs Research Select Fund (the “Fund”). The Fund is a diversified portfolio offering five classes of shares — Class A, Class B, Class C, Institutional and Service. Class A Shares of the Fund are sold with front-end sales charge of up to 5.50%. Class B Shares of the Fund are sold with a contingent deferred sales charge that declines from 5.00% to zero, depending upon the period of time the shares are held. Class C Shares of the Fund are sold with a contingent deferred sales charge of 1.00% during the first 12 months. Institutional and Service Class Shares of the Fund are not subject to a sales charge. Such sales loads are paid directly to Goldman Sachs & Co. (“Goldman Sachs”) as distributor of the Fund.
2. SIGNIFICANT ACCOUNTING POLICIES |
The following is a summary of the significant accounting policies consistently followed by the Fund. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that may affect the reported amounts. Actual results could differ from those estimates.
A. Investment Valuation — Investments in equity securities and investment companies traded on a U.S. securities exchange or the NASDAQ system are valued daily at their last sale price or official closing price on the principal exchange or system on which they are traded. If no sale occurs, such securities and investment companies are valued at the last bid price. Debt securities are valued at prices supplied by independent pricing services, broker/dealer-supplied valuations or matrix pricing systems. Unlisted equity securities for which market quotations are available are valued at the last sale price on valuation date, or if no sale occurs, at the last bid price. Investments in investment companies (other than those that are exchange traded) are valued at the net asset value per share on the valuation date. Short-term debt obligations maturing in sixty days or less are valued at amortized cost, which approximates market value. Securities for which quotations are not readily available or are deemed not to reflect market value by the investment adviser are valued at fair value using methods approved by the Trust’s Board of Trustees.
B. Security Transactions and Investment Income — Security transactions are reflected as of the trade date. Realized gains and losses on sales of portfolio securities are calculated using the identified-cost basis. Dividend income is recorded on the ex-dividend date, net of foreign withholding taxes, if any, which are reduced by any amounts reclaimable by the Fund, where applicable. Interest income is recorded on the basis of interest accrued, premium amortized and discount accreted.
C. Expenses — Expenses incurred by the Trust that do not specifically relate to an individual Fund of the Trust are allocated to the Fund on a straight-line and/or pro rata basis depending upon the nature of the expense.
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (continued) |
D. Federal Taxes — It is the Fund’s policy to comply with the requirements of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute each year substantially all of its investment company taxable income and capital gains to its shareholders. Accordingly, no federal tax provision is required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income and capital gains distributions, if any, are declared and paid annually.
E. Repurchase Agreements — Repurchase agreements involve the purchase of securities subject to the seller’s agreement to repurchase them at a mutually agreed upon date and price. During the term of a repurchase agreement, the value of the underlying securities held as collateral on behalf of the Fund, including accrued interest, is required to exceed the value of the repurchase agreement, including accrued interest. If the seller defaults or becomes insolvent, realization of the collateral by the Fund may be delayed or limited and there may be a decline in the value of the collateral during the period while the Fund seeks to assert its rights. The underlying securities for all repurchase agreements are held in safekeeping at the Fund’s custodian or designated subcustodians under triparty repurchase agreements.
F. Segregation Transactions — As set forth in the prospectus, the Fund may enter into certain derivative transactions to seek to increase total return. Forward foreign currency exchange contracts, futures contracts, written options, when-issued securities and forward commitments represent examples of such transactions. As a result of entering into these transactions, the Fund is required to segregate or physically move liquid assets, on the books of their custodian or to respective counterparty, with a current value equal to or greater than the market value of the corresponding transactions.
G. Commission Recapture — The Fund may direct portfolio trades, subject to obtaining best execution, to various brokers who have agreed to rebate a portion of the commissions generated. Such rebates are made directly to the Fund as cash payments and are included in the net realized gain (loss) on investments in the Statement of Operations.
3. AGREEMENTS |
GSAM, an affiliate of Goldman Sachs, serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Fund. Under the Agreement, GSAM manages the Fund, subject to the general supervision of the Trust’s Board of Trustees.
Average Daily Net Assets | Annual Rate | |||
Up to $1 billion | 1.00 | % | ||
Next $1 billion | 0.90 | |||
Over $2 billion | 0.86 | |||
Additionally, GSAM has voluntarily agreed to waive a portion of its Management fee equal to 0.05% of the Fund’s average daily net assets until further notice. For the six months ended February 28, 2006, GSAM waived approximately $44,100 in Management fees.
Notes to Financial Statements (continued)
4. PORTFOLIO SECURITIES TRANSACTIONS |
The cost of purchases and proceeds from sales and maturities of long-term securities for the six months ended February 28, 2006, were $44,694,023 and $81,355,831, respectively.
5. SECURITIES LENDING |
Pursuant to exemptive relief granted by the SEC and the terms and conditions contained therein, the Fund may lend its securities through a securities lending agent, Boston Global Advisers (“BGA”), a wholly-owned subsidiary of Goldman Sachs, to certain qualified borrowers including Goldman Sachs and affiliates. In accordance with the Fund’s securities lending procedures, the loans are collateralized at all times with cash and/or securities with a market value at least equal to the securities on loan. The market value of the loaned securities is determined at the close of business of the Fund, at their last sale price or official closing price on the principal exchange or system on which they are traded, and any additional required collateral is delivered to the Funds on the next business day. As with other extensions of credit, the Fund bears the risk of delay on recovery or loss of rights in the collateral should the borrower of the securities fail financially.
6. LINE OF CREDIT FACILITY |
The Fund participates in a $350,000,000 committed, unsecured revolving line of credit facility together with other registered investment companies having management or investment advisory agreements with GSAM. Under the most restrictive arrangement, the Fund must own securities having a market value in excess of 300% of the Fund’s total bank borrowings. This facility is to be used solely for temporary or emergency purposes. The interest rate on borrowings is based on the federal funds rate. The committed facility also requires a fee to be paid by the Fund based on the amount of the commitment that has not been utilized. During the six months ended February 28, 2006, the Fund did not have any borrowings under this facility.
7. TAX INFORMATION |
As of the Fund’s most recent fiscal year end, August 31, 2005, the Fund’s capital loss carryforward on a tax basis was as follows:
Capital loss carryforward*: | |||||
Expiring 2010 | $ | (188,226,383 | ) | ||
Expiring 2011 | (230,211,382 | ) | |||
Total capital loss carryforward | $ | (418,437,765 | ) | ||
* | Expiration occurs on August 31 of the year indicated. |
At February 28, 2006, the Fund’s aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes was as follows:
Tax Cost | $ | 141,097,454 | ||
Gross unrealized gain | 26,138,101 | |||
Gross unrealized loss | (993,246 | ) | ||
Net unrealized security gain | $ | 25,144,855 | ||
The difference between book-basis and tax-basis unrealized gains is attributable primarily to wash sales.
Notes to Financial Statements (continued)
8. OTHER MATTERS |
Legal Proceedings — Purported class and derivative action lawsuits were filed in April and May 2004 in the United States District Court for the Southern District of New York against Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds including this Fund, and the Trustees and Officers of the Trust. In June 2004, these lawsuits were consolidated into one action and in November 2004 a consolidated and amended complaint was filed against GSG, GSAM, Goldman Sachs Asset Management International (“GSAMI”), Goldman Sachs and certain related parties including certain Goldman Sachs Funds including this Fund, and the Trustees and Officers of the Trust. The Fund in this report, along with certain other investment portfolios of the Trust, were named as nominal defendants in the amended complaint. Plaintiffs filed a second amended consolidated complaint on April 15, 2005. The second amended consolidated complaint alleges violations of the Act and the Investment Advisers Act of 1940. The second complaint also asserts claims involving common law breach of fiduciary duty and unjust enrichment. The complaint alleges, among other things, that between April 2, 1999 and January 9, 2004 (the “Class Period”), GSAM and other defendants made improper and excessive brokerage commission and other payments to brokers that sold shares of the Goldman Sachs Funds and omitted statements of fact in registration statements and reports filed pursuant to the Act which were necessary to prevent such registration statements and reports from being materially false and misleading. The complaint further alleges that the Goldman Sachs Funds paid excessive and improper advisory fees to Goldman Sachs. The complaint also alleges that GSAM and GSAMI used 12b-1 fees for improper purposes and made improper use of soft dollars. The complaint further alleges that the Trust’s Officers and Trustees breached their fiduciary duties in connection with the foregoing. On January 13, 2006, all claims against the defendants were dismissed by the U.S. District Court. On February 22, 2006 the plaintiffs appealed this decision.
9. SUMMARY OF SHARE TRANSACTIONS |
Share activity is as follows:
For the Six Months Ended | For the Year Ended | |||||||||||||||
February 28, 2006 | August 31, 2005 | |||||||||||||||
Shares | Dollars | Shares | Dollars | |||||||||||||
Class A Shares | ||||||||||||||||
Shares sold | 154,947 | $ | 1,102,002 | 389,956 | $ | 2,645,107 | ||||||||||
Shares converted from Class B(a) | 24,981 | 178,845 | 17,538 | 118,017 | ||||||||||||
Shares repurchased | (1,765,229 | ) | (12,725,670 | ) | (4,731,921 | ) | (31,874,324 | ) | ||||||||
(1,585,301 | ) | (11,444,823 | ) | (4,324,427 | ) | (29,111,200 | ) | |||||||||
Class B Shares | ||||||||||||||||
Shares sold | 40,295 | 282,652 | 149,704 | 964,102 | ||||||||||||
Shares converted to Class A(a) | (26,005 | ) | (178,845 | ) | (18,172 | ) | (118,017 | ) | ||||||||
Shares repurchased | (2,597,353 | ) | (17,976,445 | ) | (5,284,205 | ) | (34,421,895 | ) | ||||||||
(2,583,063 | ) | (17,872,638 | ) | (5,152,673 | ) | (33,575,810 | ) | |||||||||
Class C Shares | ||||||||||||||||
Shares sold | 25,268 | 174,499 | 868,563 | 5,827,529 | ||||||||||||
Shares repurchased | (860,580 | ) | (5,942,037 | ) | (3,055,386 | ) | (20,136,823 | ) | ||||||||
(835,312 | ) | (5,767,538 | ) | (2,186,823 | ) | (14,309,294 | ) | |||||||||
Institutional Shares | ||||||||||||||||
Shares sold | 28,516 | 210,301 | 66,297 | 456,412 | ||||||||||||
Reinvestment Shares | 178 | 1,322 | — | — | ||||||||||||
Shares repurchased | (65,130 | ) | (476,302 | ) | (175,922 | ) | (1,199,372 | ) | ||||||||
(36,436 | ) | (264,679 | ) | (109,625 | ) | (742,960 | ) | |||||||||
Service Shares | ||||||||||||||||
Shares sold | 10 | 75 | 26 | 175 | ||||||||||||
Shares repurchased | (2,088 | ) | (15,097 | ) | (26 | ) | (175 | ) | ||||||||
(2,078 | ) | (15,022 | ) | — | — | |||||||||||
NET DECREASE | (5,042,190 | ) | $ | (35,364,700 | ) | (11,773,548 | ) | $ | (77,739,264 | ) | ||||||
(a) | Class B Shares will automatically convert into Class A Shares at the end of the calendar quarter that is eight years after the initial purchase date of either the Fund or another Goldman Sachs Fund. |
GOLDMAN SACHS RESEARCH SELECT FUND |
Financial Highlights
Income (loss) from | Distributions | |||||||||||||||||||||||||||||||
investment operations | to shareholders | |||||||||||||||||||||||||||||||
Net asset | ||||||||||||||||||||||||||||||||
value, | Net | Net realized | Total from | From net | Net asset | |||||||||||||||||||||||||||
beginning | investment | and unrealized | investment | investment | value, end | Total | ||||||||||||||||||||||||||
Year - Share Class | of period | income (loss)(a) | gain (loss) | operations | income | of period | return(b) | |||||||||||||||||||||||||
FOR THE SIX MONTHS ENDED FEBRUARY 28, (Unaudited) | ||||||||||||||||||||||||||||||||
2006 - A | $ | 7.02 | $ | — | (d) | $ | 0.48 | $ | 0.48 | $ | — | $ | 7.50 | 6.84 | % | |||||||||||||||||
2006 - B | 6.75 | (0.02 | ) | 0.46 | 0.44 | — | 7.19 | 6.52 | ||||||||||||||||||||||||
2006 - C | 6.75 | (0.02 | ) | 0.46 | 0.44 | — | 7.19 | 6.52 | ||||||||||||||||||||||||
2006 - Institutional | 7.16 | 0.02 | 0.50 | 0.52 | (0.01 | ) | 7.67 | 7.20 | ||||||||||||||||||||||||
2006 - Service | 6.98 | — | (d) | 0.52 | 0.52 | — | 7.50 | 7.45 | ||||||||||||||||||||||||
FOR THE YEARS ENDED AUGUST 31, | ||||||||||||||||||||||||||||||||
2005 - A | 6.33 | 0.03 | (e) | 0.66 | 0.69 | — | 7.02 | 10.90 | ||||||||||||||||||||||||
2005 - B | 6.14 | (0.02 | )(e) | 0.63 | 0.61 | — | 6.75 | 9.93 | ||||||||||||||||||||||||
2005 - C | 6.14 | (0.02 | )(e) | 0.63 | 0.61 | — | 6.75 | 9.93 | ||||||||||||||||||||||||
2005 - Institutional | 6.44 | 0.06 | (e) | 0.66 | 0.72 | — | 7.16 | 11.18 | ||||||||||||||||||||||||
2005 - Service | 6.31 | 0.02 | (e) | 0.65 | 0.67 | — | 6.98 | 10.62 | ||||||||||||||||||||||||
2004 - A | 5.65 | (0.01 | ) | 0.69 | 0.68 | — | 6.33 | 12.04 | ||||||||||||||||||||||||
2004 - B | 5.52 | (0.05 | ) | 0.67 | 0.62 | — | 6.14 | 11.23 | ||||||||||||||||||||||||
2004 - C | 5.52 | (0.05 | ) | 0.67 | 0.62 | — | 6.14 | 11.23 | ||||||||||||||||||||||||
2004 - Institutional | 5.73 | 0.02 | 0.69 | 0.71 | — | 6.44 | 12.39 | |||||||||||||||||||||||||
2004 - Service | 5.64 | (0.01 | ) | 0.68 | 0.67 | — | 6.31 | 11.88 | ||||||||||||||||||||||||
2003 - A | 4.99 | (0.02 | ) | 0.68 | 0.66 | — | 5.65 | 13.23 | ||||||||||||||||||||||||
2003 - B | 4.90 | (0.05 | ) | 0.67 | 0.62 | — | 5.52 | 12.65 | ||||||||||||||||||||||||
2003 - C | 4.91 | (0.05 | ) | 0.66 | 0.61 | — | 5.52 | 12.42 | ||||||||||||||||||||||||
2003 - Institutional | 5.03 | — | (d) | 0.70 | 0.70 | — | 5.73 | 13.92 | ||||||||||||||||||||||||
2003 - Service | 4.98 | (0.02 | ) | 0.68 | 0.66 | — | 5.64 | 13.25 | ||||||||||||||||||||||||
2002 - A | 7.07 | (0.04 | ) | (2.04 | ) | (2.08 | ) | — | 4.99 | (29.42 | ) | |||||||||||||||||||||
2002 - B | 7.01 | (0.08 | ) | (2.03 | ) | (2.11 | ) | — | 4.90 | (30.10 | ) | |||||||||||||||||||||
2002 - C | 7.02 | (0.08 | ) | (2.03 | ) | (2.11 | ) | — | 4.91 | (30.06 | ) | |||||||||||||||||||||
2002 - Institutional | 7.11 | (0.01 | ) | (2.07 | ) | (2.08 | ) | — | 5.03 | (29.25 | ) | |||||||||||||||||||||
2002 - Service | 7.07 | (0.04 | ) | (2.05 | ) | (2.09 | ) | — | 4.98 | (29.56 | ) | |||||||||||||||||||||
2001 - A | 10.77 | (0.06 | ) | (3.64 | ) | (3.70 | ) | — | 7.07 | (34.35 | ) | |||||||||||||||||||||
2001 - B | 10.76 | (0.13 | ) | (3.62 | ) | (3.75 | ) | — | 7.01 | (34.85 | ) | |||||||||||||||||||||
2001 - C | 10.77 | (0.13 | ) | (3.62 | ) | (3.75 | ) | — | 7.02 | (34.82 | ) | |||||||||||||||||||||
2001 - Institutional | 10.78 | (0.03 | ) | (3.64 | ) | (3.67 | ) | — | 7.11 | (34.04 | ) | |||||||||||||||||||||
2001 - Service | 10.78 | (0.08 | ) | (3.63 | ) | (3.71 | ) | — | 7.07 | (34.35 | ) | |||||||||||||||||||||
(a) | Calculated based on the average shares outstanding methodology. |
(b) | Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the period and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Total returns for periods less than one full year are not annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. |
(c) | Annualized. |
(d) | Less than $0.005 per share. |
(e) | Reflects a special dividend which amounted to $0.03 per share and 0.39% of average net assets. |
18
Ratios assuming no | ||||||||||||||||||||||||||
expense reductions | ||||||||||||||||||||||||||
Ratio of | Ratio of | |||||||||||||||||||||||||
Net assets | Ratio of | net investment | Ratio of | net investment | ||||||||||||||||||||||
at end of | net expenses | income (loss) | total expenses | income (loss) | Portfolio | |||||||||||||||||||||
period | to average | to average | to average | to average | turnover | |||||||||||||||||||||
(in 000s) | net assets | net assets | net assets | net assets | rate | |||||||||||||||||||||
$ | 55,028 | 1.45 | %(c) | 0.09 | %(c) | 1.56 | %(c) | (0.02 | )% (c) | 25 | % | |||||||||||||||
79,066 | 2.20 | (c) | (0.66 | )(c) | 2.31 | (c) | (0.77 | )(c) | 25 | |||||||||||||||||
30,427 | 2.20 | (c) | (0.66 | )(c) | 2.31 | (c) | (0.77 | )(c) | 25 | |||||||||||||||||
2,021 | 1.05 | (c) | 0.50 | (c) | 1.16 | (c) | 0.39 | (c) | 25 | |||||||||||||||||
1 | 1.55 | (c) | 0.11 | (c) | 1.66 | (c) | 0.00 | (c) | 25 | |||||||||||||||||
62,597 | 1.49 | 0.49 | (e) | 1.63 | 0.35 | (e) | 51 | |||||||||||||||||||
91,665 | 2.24 | (0.26 | )(e) | 2.38 | (0.40 | )(e) | 51 | |||||||||||||||||||
34,207 | 2.24 | (0.26 | )(e) | 2.38 | (0.40 | )(e) | 51 | |||||||||||||||||||
2,149 | 1.09 | 0.89 | (e) | 1.23 | 0.75 | (e) | 51 | |||||||||||||||||||
16 | 1.59 | 0.34 | (e) | 1.73 | 0.20 | (e) | 51 | |||||||||||||||||||
83,908 | 1.50 | (0.11 | ) | 1.57 | �� | (0.18 | ) | 41 | ||||||||||||||||||
115,016 | 2.25 | (0.86 | ) | 2.32 | (0.93 | ) | 41 | |||||||||||||||||||
44,543 | 2.25 | (0.86 | ) | 2.32 | (0.93 | ) | 41 | |||||||||||||||||||
2,638 | 1.10 | 0.29 | 1.17 | 0.22 | 41 | |||||||||||||||||||||
14 | 1.60 | (0.20 | ) | 1.67 | (0.27 | ) | 41 | |||||||||||||||||||
103,749 | 1.52 | (0.35 | ) | 1.58 | (0.41 | ) | 121 | |||||||||||||||||||
136,103 | 2.27 | (1.10 | ) | 2.33 | (1.16 | ) | 121 | |||||||||||||||||||
60,290 | 2.27 | (1.10 | ) | 2.33 | (1.16 | ) | 121 | |||||||||||||||||||
2,810 | 1.12 | 0.04 | 1.18 | (0.02 | ) | 121 | ||||||||||||||||||||
13 | 1.62 | (0.43 | ) | 1.68 | (0.49 | ) | 121 | |||||||||||||||||||
129,737 | 1.51 | (0.57 | ) | 1.54 | (0.60 | ) | 107 | |||||||||||||||||||
153,395 | 2.26 | (1.32 | ) | 2.29 | (1.35 | ) | 107 | |||||||||||||||||||
78,434 | 2.26 | (1.32 | ) | 2.29 | (1.35 | ) | 107 | |||||||||||||||||||
5,220 | 1.11 | (0.18 | ) | 1.14 | (0.21 | ) | 107 | |||||||||||||||||||
11 | 1.61 | (0.66 | ) | 1.64 | (0.69 | ) | 107 | |||||||||||||||||||
304,677 | 1.50 | (0.73 | ) | 1.53 | (0.76 | ) | 171 | |||||||||||||||||||
303,539 | 2.25 | (1.48 | ) | 2.28 | (1.51 | ) | 171 | |||||||||||||||||||
169,576 | 2.25 | (1.48 | ) | 2.28 | (1.51 | ) | 171 | |||||||||||||||||||
17,077 | 1.10 | (0.32 | ) | 1.13 | (0.35 | ) | 171 | |||||||||||||||||||
13 | 1.60 | (0.91 | ) | 1.63 | (0.94 | ) | 171 | |||||||||||||||||||
Fund Expenses (Unaudited) — Six Month Period Ended February 28, 2006
As a shareholder of Class A, Class B, Class C, Institutional or Service Shares of the Fund you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments (with respect to Class A Shares), contingent deferred sales charges (loads) on redemptions (with respect to Class B and Class C Shares), and redemption fees (with respect to Class A, Class B, Class C, Institutional and Service Shares, if any); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees (with respect to Class A, Class B and Class C Shares); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in Class A, Class B, Class C, Institutional and Service Shares of the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. | |
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from September 1, 2005 through February 28, 2006. |
Actual Expenses — The first line under each share class in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000=8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid” to estimate the expenses you paid on your account for this period. | |
Hypothetical Example for Comparison Purposes — The second line under each share class in the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which are not the Fund’s actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. |
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. |
Expenses Paid for the | ||||||||||||
Beginning Account | Ending Account Value | 6 months ended | ||||||||||
Share Class | Value 9/1/05 | 2/28/06 | 2/28/06* | |||||||||
Class A | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,068.40 | $ | 7.45 | ||||||
Hypothetical 5% return | 1,000.00 | 1,017.59 | + | 7.27 | ||||||||
Class B | ||||||||||||
Actual | 1,000.00 | 1,065.20 | 11.28 | |||||||||
Hypothetical 5% return | 1,000.00 | 1,013.87 | + | 11.00 | ||||||||
Class C | ||||||||||||
Actual | 1,000.00 | 1,065.20 | 11.28 | |||||||||
Hypothetical 5% return | 1,000.00 | 1,013.87 | + | 11.00 | ||||||||
Institutional | ||||||||||||
Actual | 1,000.00 | 1,072.00 | 5.41 | |||||||||
Hypothetical 5% return | 1,000.00 | 1,019.57 | + | 5.28 | ||||||||
Service | ||||||||||||
Actual | 1,000.00 | 1,074.50 | 7.98 | |||||||||
Hypothetical 5% return | 1,000.00 | 1,017.10 | + | 7.76 | ||||||||
* | Expenses for each share class are calculated using the Fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of net assets for the six months ended February 28, 2006. Expenses are calculated by multiplying the annualized expense ratio by the average account value for the period; then multiplying the result by the number of days in the most recent fiscal half year; and then dividing that result by the number of days in the calendar year. Expense ratios for the most recent fiscal half year may differ from expense ratios based on one-year data in the financial highlights. The expense ratios for the period were 1.45%, 2.20%, 2.20%, 1.05% and 1.55% for Class A, Class B, Class C, Institutional Class and Service Class, respectively. | |
+ | Hypothetical expenses are based on the Fund’s actual annualized expense ratios and an assumed rate of return of 5% per year before expenses. |
Goldman Sachs Funds
Goldman Sachs is a premier financial services firm, known since 1869 for creating thoughtful and customized investment solutions in complex global markets.
Today, The Investment Management Division of Goldman Sachs serves a diverse set of clients worldwide, including private institutions, public entities and individuals. With portfolio management teams located around the world — and $526.4 billion in assets under management as of December 31, 2005 — our investment professionals bring firsthand knowledge of local markets to every investment decision, making us one of the few truly global asset managers.
GOLDMAN SACHS FUNDS |
In building a globally diversified portfolio, you can select from more than 50 Goldman Sachs Funds and gain access to investment opportunities across borders, investment styles, asset classes and security capitalizations.
International Equity Funds ▪ Asia Equity Fund2 ▪ Emerging Markets Equity Fund ▪ International Small Cap Fund2 ▪ Japanese Equity Fund ▪ European Equity Fund ▪ International Equity Fund ▪ Structured International Equity Fund2 | Domestic Equity Funds ▪ Small Cap Value Fund ▪ Structured Small Cap Equity Fund2 ▪ Small/Mid Cap Growth Fund ▪ Growth Opportunities Fund ▪ Mid Cap Value Fund ▪ Concentrated Growth Fund ▪ Research Select FundSM ▪ Strategic Growth Fund ▪ Capital Growth Fund ▪ Large Cap Value Fund ▪ Growth and Income Fund ▪ Structured Large Cap Growth Fund2 ▪ Structured Large Cap Value Fund2 ▪ Structured U.S. Equity Fund2 Asset Allocation Funds ▪ Balanced Fund ▪ Asset Allocation Portfolios | Specialty Funds ▪ Tollkeeper FundSM ▪ Structured Tax-Managed Equity Fund2 ▪ U.S. Equity Dividend and Premium Fund ▪ Real Estate Securities Fund Fixed Income Funds ▪ Emerging Markets Debt Fund ▪ High Yield Fund ▪ High Yield Municipal Fund ▪ Global Income Fund ▪ Investment Grade Credit Fund ▪ Core Fixed Income Fund ▪ Government Income Fund ▪ U.S. Mortgages Fund ▪ Municipal Income Fund ▪ California Intermediate AMT-Free Municipal Fund ▪ New York Intermediate AMT-Free Municipal Fund ▪ Short Duration Tax-Free Fund ▪ Short Duration Government Fund ▪ Ultra-Short Duration Government Fund ▪ Enhanced Income Fund Money Market Funds1 |
1 | An investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds. |
2 | Effective December 30, 2005, the Asia Growth Fund was renamed the Asia Equity Fund and the International Growth Opportunities Fund was renamed the International Small Cap Fund. Also effective December 30, 2005, the CORESM International Equity, CORESM Small Cap Equity, CORESM Large Cap Growth, CORESM Large Cap Value and CORESM U.S. Equity Funds were renamed, respectively, the Structured International Equity, Structured Small Cap Equity, Structured Large Cap Growth, Structured Large Cap Value and Structured U.S. Equity Funds. Effective January 6, 2006, the CORESM Tax-Managed Equity Fund was renamed the Structured Tax-Managed Equity Fund. |
The Goldman Sachs Research Select FundSM and Tollkeeper FundSM are registered service marks of Goldman, Sachs & Co. |
TRUSTEES Ashok N. Bakhru, Chairman John P. Coblentz, Jr. Patrick T. Harker Mary Patterson McPherson Alan A. Shuch Wilma J. Smelcer Richard P. Strubel Kaysie P. Uniacke | OFFICERS Kaysie P. Uniacke, President James A. Fitzpatrick, Vice President James A. McNamara, Vice President John M. Perlowski, Treasurer Howard B. Surloff, Secretary |
GOLDMAN , SACHS & CO. Distributor and Transfer Agent | GOLDMAN SACHS ASSET MANAGEMENT, L.P. Investment Adviser |
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The reports concerning the Fund included in this shareholder report may contain certain forward-looking statements about the factors that may affect the performance of the Fund in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Fund, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Fund. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how a Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (I) without charge, upon request by calling 1-800-526-7384 (for Retail Shareholders) or 1-800-621-2550 (for Institutional Shareholders); and (II) on the Securities and Exchange Commission Web site at http://www.sec.gov.
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. Beginning the fiscal quarter ended November 30, 2004 and every first and third fiscal quarter thereafter, the Fund’s Form N-Q will become available on the SEC’s website at http://www.sec.gov within 60 days after the Fund’s first and third fiscal quarters. When available, the Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may also be obtained by calling 1-800-SEC-0330. When available, Form N-Q may be obtained upon request and without charge by calling 1-800-526-7384 (for Retail Shareholders) or 1-800-621-2550 (for Institutional Shareholders).
The Fund may invest in foreign securities, which may be more volatile and less liquid than investment in U.S. securities and will be subject to the risks of currency fluctuations and sudden economic or political developments. At times, the Fund may be unable to sell certain of its portfolio securities without a substantial drop in price, if at all. The Fund may invest in fixed income securities. Investments in fixed income securities are subject to the risks associated with debt securities including credit and interest rate risk.
Holdings and allocations may not be representative of current or future investments. Holdings and allocations may not include the Fund’s entire investment portfolio, which may change at any time. Fund holdings should not be relied on in making investment decisions and should not be construed as research or investment advice regarding particular securities.
Goldman Sachs Research Select FundSM is a registered service mark of Goldman, Sachs & Co.
This material is not authorized for distribution to prospective investors unless preceded or accompanied by a current Prospectus. Please consider a Fund’s objectives, risks, and charges and expenses, and read the Prospectus carefully before investing. The Prospectus contains this and other information about the Funds.
Copyright 2006 Goldman, Sachs & Co. All rights reserved. | 06-460 / RESSAR / 21.4K / 04-06 |
ITEM 2. | CODE OF ETHICS. Not applicable to the Semi–Annual Report for the period ended February 28, 2006 |
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable to the Semi–Annual Report for the period ended February 28, 2006 |
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable to the Semi–Annual Report for the period ended February 28, 2006 | |
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. | |
Not applicable. |
ITEM 6. | SCHEDULE OF INVESTMENTS. | |
Schedule of Investments is included as part of the Report to Shareholders filed under Item 1. |
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. | |
Not applicable. |
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED END MANAGEMENT INVESTMENT COMPANIES. | |
Not applicable. |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. | |
Not applicable. |
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees. | |
ITEM 11. | CONTROLS AND PROCEDURES. | |
(a) | The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934, as amended. | ||
(b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect the registrant’s internal control over financial reporting. | ||
ITEM 12. | EXHIBITS. |
(a)(1) | Goldman Sachs Trust’s Code of Ethics for Principal Executive and Senior Financial Officers is incorporated by reference to Exhibit 11(a)(1) of the registrant’s Form N-CSR filed on March 8, 2004 for its Real Estate Securities Fund (Accession Number 0000950123-04-0002984). | ||
(a)(2) | Exhibit 99.CERT | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 filed herewith. | ||
(b) | Exhibit 99.906CERT | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 filed herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
Goldman Sachs Trust | ||||||
By: | /s/ Kaysie P. Uniacke | |||||
Kaysie P. Uniacke | ||||||
President/Principal Executive Officer | ||||||
Goldman Sachs Trust | ||||||
Date: | May 5, 2006 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
By: | /s/ Kaysie P. Uniacke | |||||
Kaysie P. Uniacke | ||||||
President/Principal Executive Officer | ||||||
Goldman Sachs Trust | ||||||
Date: | May 5, 2006 | |||||
By: | /s/ John M. Perlowski | |||||
John M. Perlowski | ||||||
Treasurer/Principal Financial Officer | ||||||
Goldman Sachs Trust | ||||||
Date: | May 5, 2006 |