 | One International Place, 40th Floor +1 617 728 7100 Main +1 617 426 6567 Fax www.dechert.com
| |
HILARY BONACCORSI
hilary.bonaccorsi@dechert.com +1 617 728 7153 Direct +1 617 275 8384 Fax |
December 18, 2017
VIA EDGAR CORRESPONDENCE
Ms. Angela Mokodean
Senior Counsel
U.S. Securities and Exchange Commission (“SEC”)
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549-4644
Re: Goldman Sachs Trust (the “Registrant”), SEC File Numbers033-17619 and811-05349
Dear Ms. Mokodean:
This letter responds to comments you provided to Chelsea Childs and Shayna Gilmore of Dechert LLP, and me during a telephonic discussion on November 27, 2017 with respect to your review of Post-Effective Amendment No. 630 (“PEA No. 630”) to the Registrant’s registration statement filed with the SEC on October 13, 2017. PEA No. 630 was filed pursuant to Rule 485(a) under the Securities Act of 1933 for the purposes of: (i) registering Class R6 Shares of the Goldman Sachs Technology Opportunities Fund, and (ii) receiving the Commission’s review of disclosure related to changes to the principal investment strategies and risks of the Goldman Sachs Blue Chip Fund (formerly the Goldman Sachs Dynamic U.S. Equity Fund), Goldman Sachs Equity Income Fund (formerly the Goldman Sachs Growth and Income Fund) and Goldman Sachs Flexible Cap Fund (formerly the Goldman Sachs Flexible Cap Growth Fund). Capitalized terms have the meanings attributed to such terms in PEA No. 630. We have reproduced your comments below, followed by the Registrant’s responses.
General
| 1. | Comment: With respect to the Fee Waiver and/or Expense Limitation arrangements, to the extent the Investment Adviser is permitted to recoup any fees waived or expenses reimbursed pursuant to the arrangements, please disclose the terms of such recoupments. In addition, please confirm supplementally whether the fee waiver or expense limitation agreement for each Fund is either incorporated by reference or that it will be filed as an exhibit to the Registration Statement. |
| Response: The Registrant notes that the Investment Adviser is not entitled to reimbursement of any waived fees or reimbursed expenses from prior fiscal years. The Registrant also notes that any fee waiver or expense limitation arrangements are not made in writing, and therefore will not be filed as an exhibit to the Registration Statement. However, the Registrant can confirm that any fee waiver or expense limitation arrangements will be in effect for at least one year, and the Funds have provided disclosure consistent with Instruction 3(e) to Item 3 of FormN-1A, describing that the modification or termination of such an arrangement requires approval of the Fund’s Board of Trustees. |
| Ms. Angela Mokodean | |
| December 18, 2017 | ||
| Page 2 | ||
| 2. | Comment: The SEC Staff notes that for each Fund that offers Class R6 Shares, there is a footnote to the Fund’s “Average Annual Total Return Table” that states, in part, “Performance has not been adjusted to reflect the lower expenses of Class R6 Shares. Class R6 Shares would have had higher returns because: (i) Institutional Shares and Class R6 Shares represent interests in the same portfolio of securities, and (ii) Class R6 Shares have lower expenses.” Please revise the disclosure to conform to the Instructions to Item 4 of FormN-1A. Please also confirm supplementally that the presentation of the performance for Class R6 Shares is consistent with theno-action relief granted by the SEC Staff in theQuest for Value Dual Purpose, Inc.No-Action Letter.1 |
| Response: Instruction 3(b) to Item 4 of FormN-1A states that when a multiple class fund offers a new share class in a separate prospectus and separately presents information for the new share class in response to Item 4(b)(2), the registrant must include the bar chart with annual total returns for any other existing share class of the fund for the first year that the new share class is offered. Further, the instruction provides that such a fund must explain in a footnote that the returns are for a share class that is not presented in the prospectus, and that such other share class would have had substantially similar annual returns because the shares are invested in the same portfolio of securities and the annual returns would differ only to the extent that the share classes do not have the same expenses. |
| However, inQuest for Value, the SEC Staff permitted a fund to show in the prospectus for a new share class the performance history of an existing share class as if it were the performance history of the new share class, restated to reflect differences in certain fees and expenses between the share classes.2 The Registrant intends to follow the approach set forth inQuest for Value with respect to the presentation of the historical performance of Class R6 Shares. |
| Consistent withQuest for Value, the Funds’ current approach when launching a new share class is to attribute to the new share class the historical performance of an existing share class of the same Fund prior to the new share class’s inception and to disclose that the performance of the new share class for the period prior to its inception is that of the existing share class. If the new share class has lower fees and expenses than those of the existing share class whose historical performance is attributed to the new share class, the accompanying disclosure typically indicates that (i) the performance has not been adjusted to reflect the lower fees and expenses of the new share class; and (ii) the |
| 1 | SeeQuest for Value Dual Purpose Fund, Inc., SECNo-Action Letter (pub. avail. Feb. 28, 1997). |
| 2 | The position taken by the SEC Staff in theQuest for Value was also consistent with the position it took in an earlier letter.SeeMassMutual Institutional Funds, SECNo-Action Letter (pub. avail. Sept. 28, 1995). |
| Ms. Angela Mokodean | |
| December 18, 2017 | ||
| Page 3 | ||
| performance of the new share class would have been higher than that of the existing class because: (1) the new and existing share classes represent interests in the same portfolio of securities; and (2) the fees and expenses of the new share class are lower than those of the existing share class. The Funds therefore believe that the footnote disclosure in the “Average Annual Total Returns” tables present information for Class R6 Shares in a manner consistent with FormN-1A and the instructions therein and provides meaningful information to investors. |
| Additionally, the Funds believe that this presentation is consistent with SEC Staff views inQuest for Value. The fees and expenses for Class R6 Shares will be equal to or lower than those of Institutional Shares (whose historical performance will be attributed to the Class R6 Shares). Therefore, the Funds believe that no adjustments to the historical performance of Institutional Shares are permitted for Class R6 Shares. |
Goldman Sachs Blue Chip Fund Prospectus
| 3. | Comment:Please explain supplementally why the Investment Adviser believes that its definition of “blue chip” companies is appropriate. The SEC Staff notes that other fund complexes appear to take into account additional factors when defining “blue chip” companies. Such factors include: consistent dividend payments, ability to survive economic downturns, brand recognition, large market capitalization, liquidity of stock and maturity of the company. |
| Response:The Registrant respectfully submits that there is not an accepted definition of what constitutes a “blue chip” company, and the factors included in the Fund’s principal strategy are the factors that the Fund’s portfolio management team has determined to be the most relevant when assessing whether an issuer is a “blue chip” company. In addition, the Registrant respectfully notes that the factors included in the Fund’s principal strategy arenon-exhaustive. To clarify this point, the Registrant has revised the principal strategy to read (responsive text marked as bold, underlined): “Blue chip companies are companies that, in the Investment Adviser’s view, enjoycharacteristics that include strong market positions, seasoned management teams, solid financial fundamentals and high-quality reputations. |
| 4. | Comment: The Fund’s principal investment strategy provides that “the Investment Adviser may invest in companies that it believes have good, long-term prospects tobecome well-known, established or blue chip companies” (emphasis added). Please confirm supplementally that investments in such companies will not count towards the Fund’s 80% policy. |
| Response:The Registrant confirms that such investments will not be counted towards the Fund’s 80% policy. |
| Ms. Angela Mokodean | |
| December 18, 2017 | ||
| Page 4 | ||
Goldman Sachs Equity Income Fund Prospectus
| 5. | Comment:The Fund’s principal investment strategy states that “The Fund seeks to generate additional cash flow and may reduce volatility by the sale of call options on the S&P 500® Index or other regional stock market indices (or related exchange-traded funds (“ETFs”)).” Please explain supplementally how call options will be used for purposes of the Fund’s policy to invest at least 80% of its Net Assets in equity investments. |
Response: The Fund’s strategy of selling call options on the indices described above is intended to generate additional income and not as a means of gaining additional economic exposure to equity securities. As such, the Fund does not consider these positions to be covered by its policy to invest at least 80% of its Net Assets in equity investments.
Goldman Sachs Technology Opportunities Fund Prospectus
| 6. | Comment:Footnote 3 to the Fund’s “Fees and Expenses of the Fund” table states that “The ‘Other Expenses’ for Class R6 and Class T Shares have been estimated to reflect expenses expected to be incurred during the current fiscal year.”Please explain supplementally why this footnote is necessary. For example, is there an expense component for Class R6 Shares that is different from other share classes such that “Other Expenses” cannot be based on the Fund’s actual expenses? |
Response: Instruction 3(d)(i) to Item 3 of FormN-1A provides that a fund should base the expense figures reported in its fee and expense table on the expenses the fund incurred during its most recent fiscal year. However, Class R6 Shares and Class T Shares of the Fund have not yet commenced operations and the Fund therefore did not incur expenses with respect to those share classes during the most recent fiscal year. Instruction 6(a) to Item 3 of FormN-1A provides that new funds should provide estimated figures for “Other Expenses” that reflect the expenses the fund expects to incur during the current fiscal year. FormN-1A does not provide instructions for how to report expenses for a new share class of an existing fund. As such, the Registrant believes that, because Class R6 Shares and Class T Shares of the Fund have not yet commenced operations, the Fund may report the estimated expenses of Class R6 and Class T Shares in accordance with Instruction 6(a) to Item 3 of FormN-1A. In estimating these expenses, the Investment Adviser has considered the expenses for a similar share class as well as any differences in expense components (e.g., the transfer agency fee applicable to Class R6 Shares differs from that of the Fund’s Institutional Shares).
| 7. | Comment: Appendix B states that “Because Class T Shares of the Funds have not yet commenced operations as of the date of the Prospectus, financial highlights are not available.” Please consider whether similar disclosure should be included for Class R6 Shares of the Fund. |
Response: The Registrant has revised the disclosure to include Class R6 Shares.
| Ms. Angela Mokodean | |
| December 18, 2017 | ||
| Page 5 | ||
* * * * *
We believe that the foregoing has been responsive to the Staff’s comments. Please call the undersigned at (617)728-7153 if you wish to discuss this correspondence further.
Sincerely,
/s/ Hilary Bonaccorsi
Hilary Bonaccorsi
| cc: | Chris Carlson, Vice President and Associate General Counsel, Goldman Sachs Asset Management, L.P. |
Joseph McClain, Vice President and Assistant General Counsel, Goldman Sachs Asset Management, L.P.
Stephen H. Bier, Dechert LLP
Chelsea M. Childs, Dechert LLP