N-CSRS 1 y23412nvcsrs.htm VARIABLE INSURANCE TRUST SEMIANNUAL REPORTS N-CSRS
 

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 811-08361

Goldman Sachs Variable Insurance 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, Esq.   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: December 31

Date of reporting period: June 30, 2006

     
ITEM 1.   REPORTS TO STOCKHOLDERS.
     
    The Semi-Annual Report to Stockholders is filed herewith.

 

 

Goldman
Sachs Variable Insurance Trust
GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, NEW YORK, NEW YORK 10005
Growth and Income Fund
 
Semiannual Report
June 30, 2006
 

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Growth and Income Fund during the six-month reporting period that ended June 30, 2006.


Market Review

During the first half of 2006, the overall U.S. equity markets finished in positive territory, with the S&P 500 Index returning 2.71%. While the economy expanded and corporate profits remained strong, the headwinds from steadily rising interest rates, inflationary pressures, and the potential for additional Federal Reserve Board rate hikes tempered returns. From a market-cap perspective, small-cap stocks outperformed their mid- and large-cap counterparts over the six-month period, with the Russell 2000, Russell Midcap, and Russell 1000 Indexes returning 8.21%, 4.84%, and 2.76%, respectively. Within the mid-cap universe, value outperformed growth, as the Russell MidCap Value Index returned 7.02% and the Russell Midcap Growth Index returned 2.56%, respectively.

Investment Objective

The Fund seeks long-term growth of capital and growth of income.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006*
             
% of
Company Net Assets Business
Exxon Mobil Corp.
    4.8 %   Energy Resources
Bank of America Corp.
    4.6     Large Banks
J.P. Morgan Chase & Co.
    4.2     Large Banks
Pfizer, Inc.
    3.9     Drugs
Washington Mutual, Inc.
    3.1     Specialty Financials
ConocoPhillips
    3.1     Energy Resources
Entergy Corp.
    3.0     Electric Utilities
Citigroup, Inc.
    2.7     Large Banks
Wells Fargo & Co.
    2.5     Large Banks
McDonald’s Corp.
    2.5     Restaurants

* Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

 
1

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
 
Shareholder Letter (continued)

Performance Review

Over the six-month period that ended June 30, 2006, the Fund generated a cumulative total return of 6.02%. This return compares to the 6.56% cumulative total return of the Fund’s benchmark, the Russell 1000 Value Index (with dividends reinvested), over the same time period.

During the period, the Fund generated positive returns but trailed the gains in the benchmark. The Fund’s holdings in the Financials and Consumer Cyclicals sectors enhanced results, while its Technology and Energy stocks detracted from results.

In Consumer Cyclicals, auto safety provider, Autoliv, Inc., and department store retailer, J. C. Penney, Co., Inc., contributed to performance. Auto safety provider Autoliv has benefited from a low-cost labor structure. Additionally, the company has used recent free cash flow to improve its debt structure as well as to repurchase its own shares. J. C. Penney continued to perform strongly due to the company’s improved profitability and leadership. In Services, Walt Disney Co. and Comcast Corp. contributed to performance as both companies posted strong operating results across multiple business lines. We subsequently sold Walt Disney Co. to capture profits.

The Fund’s Technology holdings experienced pressures due to a combination of company-specific and sector-wide factors. Microsoft Corp. detracted from performance after the company moderated its outlook. The company also announced a shift in future spending patterns, which altered our original thesis and prompted us to sell the holding, despite its low valuation. While weak investor sentiment pressured shares of Activision, Inc., we remain positive on the long-term fundamentals for the video game maker. Within Energy, declines in natural gas prices weighed on Fund holdings, EOG Resources, Inc. and The Williams Companies, Inc. The winter of 2006 ranked as one of the warmest on record, resulting in weakness in natural gas fundamentals. Longer term, we remain positive on the prospects for these companies given their low cost structures, positive reserve trends, and disciplined management teams.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Value Portfolio Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Growth and Income Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. Please consider a fund’s objectives, risks and charges and

 
2

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 

expenses, and read the prospectus carefully before investing. The prospectus contains this and other information about the Fund.

The VIT Growth and Income Fund invests primarily in large-capitalization U.S. equity investments and also invests in fixed income securities. The Fund’s equity investments will be 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. Investments in fixed income securities are subject to the risks associated with debt securities including credit and interest rate risk. 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.

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term Investments include repurchase agreements and securities lending collateral. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
3

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 95.8%
    Aerospace & Defense – 1.4%
      59,013     General Dynamics Corp.   $ 3,862,991  
      9,900     The Boeing Co.     810,909  
                 
 
                  4,673,900  
   
    Biotechnology – 0.4%
      21,600     Amgen, Inc.*     1,408,968  
   
    Brokers – 3.2%
      90,554     Lehman Brothers Holdings, Inc.     5,899,593  
      21,500     Merrill Lynch & Co., Inc.     1,495,540  
      53,996     Morgan Stanley     3,413,087  
                 
 
                  10,808,220  
   
    Chemicals – 1.0%
      69,643     Rohm & Haas Co.     3,490,507  
   
    Computer Hardware – 3.3%
      336,062     Cisco Systems, Inc.*     6,563,291  
      138,968     Hewlett-Packard Co.     4,402,506  
                 
 
                  10,965,797  
   
    Computer Software – 0.8%
      228,640     Activision, Inc.*     2,601,923  
   
    Diversified Energy – 1.8%
      263,250     The Williams Companies, Inc.     6,149,520  
   
    Drugs – 5.2%
      105,356     Abbott Laboratories     4,594,575  
      555,008     Pfizer, Inc.     13,026,038  
                 
 
                  17,620,613  
   
    Electric Utilities – 7.5%
      21,100     Edison International     822,900  
      143,127     Entergy Corp.     10,126,235  
      107,885     Exelon Corp.     6,131,105  
      39,389     FirstEnergy Corp.     2,135,278  
      20,900     FPL Group, Inc.     864,842  
      165,390     PPL Corp.     5,342,097  
                 
 
                  25,422,457  
   
    Energy Resources – 9.1%
      158,296     ConocoPhillips     10,373,137  
      56,867     EOG Resources, Inc.     3,943,158  
      264,120     Exxon Mobil Corp.     16,203,762  
                 
 
                  30,520,057  
   
    Energy-MLP – 4.1%
      81,870     Energy Transfer Partners LP     3,655,495  
      188,438     Enterprise Products Partners LP     4,692,106  
      94,266     Magellan Midstream Partners LP     3,203,159  
      67,937     Williams Partners LP     2,137,298  
                 
 
                  13,688,058  
   
    Environmental & Other Services – 1.2%
      111,300     Waste Management, Inc.     3,993,444  
   
    Financial Technology – 0.7%
      55,246     First Data Corp.     2,488,280  
   
    Food & Beverage – 1.2%
      27,329     Kraft Foods, Inc.(a)     844,466  
      139,326     Unilever NV     3,141,801  
                 
 
                  3,986,267  
   
    Home Products – 1.9%
      200,888     Newell Rubbermaid, Inc.     5,188,937  
      22,387     The Clorox Co.     1,364,935  
                 
 
                  6,553,872  
   
    Large Banks – 14.0%
      322,990     Bank of America Corp.     15,535,819  
      191,104     Citigroup, Inc.     9,218,857  
      334,070     J.P. Morgan Chase & Co.     14,030,940  
      127,267     Wells Fargo & Co.     8,537,070  
                 
 
                  47,322,686  
   
    Media – 2.3%
      118,500     Comcast Corp.*     3,879,690  
      216,756     Time Warner, Inc.     3,749,879  
                 
 
                  7,629,569  
   
    Medical Products – 1.4%
      127,422     Baxter International, Inc.     4,684,033  
   
    Mining – 0.5%
      32,000     Nucor Corp.     1,736,000  
   
    Motor Vehicle – 0.7%
      42,701     Autoliv, Inc.     2,415,596  
   
    Oil Services – 1.4%
      32,003     Baker Hughes, Inc.     2,619,446  
      53,629     BJ Services Co.     1,998,216  
                 
 
                  4,617,662  
   
    Paper & Packaging – 2.9%
      75,300     International Paper Co.     2,432,190  
      212,784     Packaging Corp. of America     4,685,504  
      72,320     Plum Creek Timber Co., Inc. (REIT)     2,567,360  
                 
 
                  9,685,054  
   
    Parts & Equipment – 1.9%
      103,592     United Technologies Corp.     6,569,805  
   
    Property Insurance – 3.9%
      46,826     American International Group, Inc.     2,765,075  
      58,528     PartnerRe Ltd.     3,748,718  
      67,904     The Allstate Corp.     3,716,386  
      46,435     XL Capital Ltd.(a)     2,846,466  
                 
 
                  13,076,645  
   
    Regional Banks – 2.0%
      147,476     KeyCorp     5,261,944  
      11,621     M&T Bank Corp.     1,370,348  
                 
 
                  6,632,292  
   
 
The accompanying notes are an integral part of these financial statements.

4

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    REITs – 4.4%
      70,364     Apartment Investment & Management Co. (REIT)   $ 3,057,316  
      136,300     CapitalSource, Inc.     3,197,598  
      65,307     Developers Diversified Realty Corp.     3,407,719  
      138,543     iStar Financial, Inc.     5,229,998  
                 
 
                  14,892,631  
   
    Restaurants – 2.5%
      253,500     McDonald’s Corp.     8,517,600  
   
    Retail Apparel – 2.5%
      122,593     J. C. Penney Co., Inc.     8,276,254  
   
    Specialty Financials – 7.1%
      75,876     AllianceBernstein Holding LP     4,639,058  
      89,291     American Capital Strategies Ltd.(a)     2,989,463  
      138,171     Apollo Investment Corp.     2,553,400  
      82,297     Countrywide Financial Corp.     3,133,870  
      229,036     Washington Mutual, Inc.(a)     10,439,461  
                 
 
                  23,755,252  
   
    Telecom Equipment – 1.1%
      179,800     Motorola, Inc.     3,622,970  
   
    Telephone – 1.9%
      188,912     Verizon Communications, Inc.     6,326,663  
   
    Tobacco – 2.0%
      93,377     Altria Group, Inc.     6,856,673  
   
    Transports – 0.5%
      21,631     United Parcel Service, Inc. Class B     1,780,880  
   
    TOTAL COMMON STOCKS
    (Cost $289,046,556)   $ 322,770,148  
   
                             
Principal Interest Maturity
Amount Rate Date Value
   
Repurchase Agreement(b) – 3.6%
    Joint Repurchase Agreement Account II
    $ 12,200,000       5.28 %   07/03/2006     $12,200,000  
    Maturity Value:  $12,205,364
    (Cost $12,200,000)
   
    TOTAL INVESTMENTS BEFORE SECURITIES
LENDING COLLATERAL
    (Cost $301,246,556)     $334,970,148  
   
                     
Shares Description Value
   
Securities Lending Collateral – 4.5%
      15,105,925     Boston Global Investment Trust – Enhanced Portfolio   $ 15,105,925  
    (Cost $15,105,925)        
   
    TOTAL INVESTMENTS – 103.9%
    (Cost $316,352,481)   $ 350,076,073  
   
    LIABILITIES IN EXCESS OF
  OTHER ASSETS – (3.9)%		     (13,250,331 )
   
    NET ASSETS – 100.0%   $ 336,825,742  
   

  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) All or portion of security is on loan.
 
 (b) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment information appears on page 6.
             
   
    Investment Abbreviation:
    REIT   —   Real Estate Investment Trust
   
 
The accompanying notes are an integral part of these financial statements.

5

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)

ADDITIONAL INVESTMENT INFORMATION

JOINT REPURCHASE AGREEMENT ACCOUNT II — At June 30, 2006, the Fund had an undivided interest in the following Joint Repurchase Agreement Account II which equaled $12,200,000 in principal amount.

                                 
Principal Interest Maturity Maturity
Repurchase Agreements Amount Rate Date Value
Banc of America Securities LLC
  $ 2,860,000,000       5.30%       07/03/2006     $ 2,861,263,167  
Barclays Capital PLC
    1,500,000,000       5.32       07/03/2006       1,500,665,000  
Bear Stearns
    500,000,000       5.31       07/03/2006       500,221,250  
Deutsche Bank Securities, Inc.
    1,000,000,000       5.20       07/03/2006       1,000,433,333  
Greenwich Capital Markets
    300,000,000       5.32       07/03/2006       300,133,000  
J.P. Morgan Securities, Inc.
    400,000,000       5.28       07/03/2006       400,176,000  
Merrill Lynch
    500,000,000       5.25       07/03/2006       500,218,750  
Morgan Stanley & Co.
    3,000,000,000       5.25       07/03/2006       3,001,312,500  
UBS Securities LLC
    1,050,000,000       5.25       07/03/2006       1,050,459,375  
UBS Securities LLC
    475,000,000       5.30       07/03/2006       475,209,792  
UBS Securities LLC
    400,000,000       5.34       07/03/2006       400,178,000  
Wachovia Capital Markets
    250,000,000       5.26       07/03/2006       250,109,583  
TOTAL
   $ 12,235,000,000                     $ 12,240,379,750  
  At June 30, 2006, the Joint Repurchase Agreement Account II was fully collateralized by Federal Home Loan Bank, 0.00% to 11.00%, due 07/07/2006 to 04/20/2016; Federal Home Loan Mortgage Association, 3.00% to 8.50%, due 02/01/2007 to 07/01/2036; Federal National Mortgage Association, 0.00% to 10.50%, due 02/01/2007 to 07/01/2036; and U.S. Treasury Bonds, 5.00% to 7.14%, due 11/13/2008 to 10/20/2018. The aggregate market value of the collateral, including accrued interest, was $12,492,409,737.  
 
The accompanying notes are an integral part of these financial statements.

6

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)
               
    Assets:
   
Investment in securities, at value (identified cost $301,246,556)—including $14,786,120 of securities on loan
  $ 334,970,148  
   
Securities lending collateral, at value (cost $15,105,925)
    15,105,925  
   
Cash
    1,137  
   
Receivables:
       
     
Investment securities sold
    2,986,406  
     
Dividends and interest
    440,209  
     
Fund shares sold
    34,130  
   
Other assets
    3,336  
   
   
Total assets
     353,541,291  
   
    Liabilities:
   
Payables:
       
     
Payable upon return of securities loaned
    15,105,925  
     
Fund shares repurchased
    1,336,378  
     
Amounts owed to affiliates
    216,045  
   
Accrued expenses
    57,201  
   
   
Total liabilities
     16,715,549  
   
    Net Assets:
   
Paid-in capital
    291,299,880  
   
Accumulated undistributed net investment income
    3,931,816  
   
Accumulated net realized gain on investment transactions
    7,870,454  
   
Net unrealized gain on investments
    33,723,592  
   
   
NET ASSETS
   $ 336,825,742  
   
   
Total shares of beneficial interest outstanding, par value $0.001 (unlimited shares authorized)
    26,548,053  
   
Net asset value, offering and redemption price per share
  $ 12.69  
   
 
The accompanying notes are an integral part of these financial statements.

7

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND

Statement of Operations

For the Six Months Ended June 30, 2006 (Unaudited)
             
    Investment income:
   
Dividends(a)
  $ 4,734,569  
   
Interest (including securities lending income of $2,993)
    183,723  
   
   
Total income
     4,918,292  
   
    Expenses:
   
Management fees
    1,228,373  
   
Transfer agent fees
    65,513  
   
Custody and accounting fees
    40,073  
   
Printing fees
    32,899  
   
Professional fees
    30,762  
   
Trustee fees
    6,803  
   
Registration fees
    629  
   
Other
    6,906  
   
   
Total expenses
     1,411,958  
   
   
Less — expense reductions
    (1,090 )
   
   
Net expenses
     1,410,868  
   
   
NET INVESTMENT INCOME
     3,507,424  
   
    Realized and unrealized gain on investment transactions:
   
Net realized gain from investment transactions
    12,820,633  
   
Net change in unrealized gain on investments
    2,487,563  
   
   
Net realized and unrealized gain on investment transactions
     15,308,196  
   
   
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 18,815,620  
   

(a)  Foreign taxes withheld on dividends were $11,743.

 
The accompanying notes are an integral part of these financial statements.

8

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 

Statements of Changes in Net Assets

                     
For the
Six Months Ended For the
June 30, 2006 Year Ended
(Unaudited) December 31, 2005
    From operations:
   
Net investment income
  $ 3,507,424     $ 5,198,685  
   
Net realized gain on investment transactions
    12,820,633       22,131,005  
   
Payments by affiliates to reimburse certain security claims
    —       9,144  
   
Net change in unrealized gain (loss) on investments
    2,487,563       (15,849,453 )
   
   
Net increase in net assets resulting from operations
     18,815,620       11,489,381  
   
    Distributions to shareholders:
   
From net investment income
    —       (5,139,069 )
   
    From share transactions:
   
Proceeds from sales of shares
    25,637,077       58,037,222  
   
Reinvestment of dividends and distributions
    —       5,139,069  
   
Cost of shares repurchased
    (20,778,851 )     (32,770,160 )
   
   
Net increase in net assets resulting from share transactions
     4,858,226       30,406,131  
   
   
TOTAL INCREASE
     23,673,846       36,756,443  
   
    Net assets:
   
Beginning of period
    313,151,896       276,395,453  
   
   
End of period
  $ 336,825,742     $ 313,151,896  
   
   
Accumulated undistributed net investment income
   $ 3,931,816     $ 424,392  
   
    Summary of share transactions:
   
Shares sold
    2,048,372       4,906,882  
   
Shares issued on reinvestment of dividends and distributions
    —       428,971  
   
Shares repurchased
    (1,657,799 )     (2,776,580 )
   
   
NET INCREASE
     390,573       2,559,273  
   
 
The accompanying notes are an integral part of these financial statements.

9

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                 
Income (loss) from Ratios assuming no
investment operations expense reductions
Distributions
Net to Ratio of Ratio of Ratio of
Net asset realized shareholders Net asset Net assets Ratio of net investment total net investment
value, Net and Total from from net value, at end of net expenses income to expenses income to Portfolio
beginning investment unrealized investment investment end of Total period to average average to average average turnover
of period income(a) gain (loss) operations income period return(b) (in 000s) net assets net assets net assets net assets rate
 
    For the Six Months Ended June 30, (Unaudited)
    2006   $ 11.97     $ 0.13     $ 0.59     $ 0.72     $ —     $ 12.69       6.02 %   $ 336,826       0.86 %(c)     2.14 %(c)     0.86 %(c)     2.14 %(c)     32 %    
    For the Years Ended December 31,
    2005     11.71       0.21       0.25       0.46       (0.20 )     11.97       3.93       313,152       0.88       1.77       0.88       1.77       46      
    2004     10.00       0.19       1.69       1.88       (0.17 )     11.71       18.80       276,395       0.86       1.75       0.86       1.75       58      
    2003     8.14       0.13       1.85       1.98       (0.12 )     10.00       24.36       230,316       1.02       1.44       1.20       1.26       51      
    2002     9.33       0.13       (1.19 )     (1.06 )     (0.13 )     8.14       (11.34 )     36,911       1.05       1.51       1.27       1.29       98      
    2001     10.34       0.05       (1.02 )     (0.97 )     (0.04 )     9.33       (9.34 )     40,593       1.00       0.49       1.17       0.32       48      
   

(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 distributions and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than one year are not annualized.
(c)  Annualized.

The accompanying notes are an integral part of these financial statements.

 
10

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 

Notes to Financial Statements

June 30, 2006 (Unaudited)

1. ORGANIZATION

Goldman Sachs Variable Insurance 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 Growth and Income Fund (the “Fund”). The Fund is a diversified portfolio under the Act.
     Shares of the Trust may be purchased and held by separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Trust are not offered directly to the general public.

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 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 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.

D. Federal Taxes and Distributions to Shareholders — 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 provisions are required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gains distributions, if any, are declared and paid annually.

     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules, which may differ from generally accepted accounting principles. Therefore, the source of the Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain, or from tax return of capital.
     In addition, distributions paid by the Fund’s investments in real estate investment trusts (“REITs”) often include a “return of capital” which is recorded by the Fund as a reduction of the cost basis of the securities held. The Code requires a REIT to distribute at least 95% of its taxable income to investors. In many cases, however, because of “non-cash” expenses such as property depreciation, a REIT’s cash flow will exceed its taxable income. The REIT may distribute this excess cash to offer a more competitive yield. This portion of the distribution is deemed a return of capital and is generally not taxable to shareholders.
 
11

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
 
2. SIGNIFICANT ACCOUNTING POLICIES (continued)

E. 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 counterparties, with a current value equal to or greater than the market value of the corresponding transactions.

F. 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.

     Pursuant to exemptive relief granted by the Securities and Exchange Commission (“SEC”) and terms and conditions contained therein, the Fund, together with other registered investment companies having management or investment advisory agreements with Goldman Sachs Asset Management, L.P. (“GSAM”), or its affiliates may transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

3. AGREEMENTS

GSAM, an affiliate of Goldman, Sachs & Co. (“Goldman Sachs”), serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Fund. Under this Agreement, GSAM manages the Fund, subject to the general supervision of the Trust’s Board of Trustees.
     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAM is entitled to a fee (“Management fee”) computed daily and payable monthly, equal to an annual percentage rate of the Fund’s average daily net assets.
     The Investment Adviser has entered into a fee reduction commitment for the Fund which was implemented on a voluntary basis beginning on July 1, 2005 and on a contractual basis as of April 28, 2006 to achieve the rates listed below:
         
Average Daily Net Assets Annual Rate
First $1 Billion
    0.75 %
Next $1 Billion
    0.68 %
Over $2 Billion
    0.65 %

     GSAM has voluntarily agreed to limit certain “Other Expenses” of the Fund (excluding Management fees, Transfer Agency fees and expenses, taxes, interest, brokerage fees and litigation, indemnification costs, shareholder meeting and other extraordinary expenses exclusive of any offset arrangements) to the extent that such expenses exceed, on an annual basis, 0.114% of the average daily net assets of the Fund. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Fund is not obligated to reimburse GSAM for prior fiscal year expense reimbursements, if any. For the six months ended June 30, 2006, GSAM made no reimbursements to the Fund.

     In addition, the Fund has entered into certain offset arrangements with the custodian resulting in a reduction in the Fund’s expenses. For the six months ended June 30, 2006, custody fees were reduced by approximately $1,100.
     Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly equal to an annual rate of 0.04% of the average daily net assets of the Fund. Goldman Sachs serves as the distributor of the Fund’s shares at no cost to the Fund.
 
12

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 
 
3. AGREEMENTS (continued)
     At June 30, 2006, amounts owed to affiliates were approximately $205,000 and $11,000 for Management and Transfer Agent fees, respectively.

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long term securities for the six months ended June 30, 2006, were $105,435,753 and $103,128,278, respectively. For the six months ended June 30, 2006, Goldman Sachs earned approximately $4,600 of brokerage commissions from portfolio transactions executed on behalf of the Fund.

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 Fund 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.
     Both the Fund and BGA receive compensation relating to the lending of the Fund’s securities. The amount earned by the Fund for the six months ended June 30, 2006, is reported parenthetically under Investment Income on the Statement of Operations. For the six months ended June 30, 2006, BGA earned approximately $600 in fees as securities lending agent. At June 30, 2006, the Fund loaned securities having a market value of $14,786,120 collateralized by cash in the amount of $15,105,925. The Fund invests the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by GSAM, for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Fund bears the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.

6. LINE OF CREDIT FACILITY

The Fund participates in a $400,000,000 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 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. This 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 June 30, 2006, the Fund did not have any borrowings under this facility.
 
13

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND

7. TAX INFORMATION

As of the Fund’s most recent fiscal year end, December 31, 2005, the Fund’s capital loss carryforwards and certain timing differences on a tax basis were as follows.
           
Capital loss carryforward:(1)(2)
       
 
Expiring 2010
  $ (4,587,095 )
Timing differences (related to the deferral of certain REIT dividends for tax purposes)
    35,266  

(1)  Expiration occurs on December 31 of the year indicated and utilization of these losses may be limited under the Code.
 
(2)  During the year ended December 31, 2005, the Fund utilized $21,855,122 of capital loss carryforwards.

     At June 30, 2006, the Fund’s aggregate security unrealized gains and losses based on a cost for U.S. federal income tax purposes were as follows:

         
Tax cost
  $ 317,145,495  
Gross unrealized gain
    38,194,937  
Gross unrealized loss
    (5,264,359 )
Net unrealized security gain
  $ 32,930,578  

     The difference between book-basis and tax basis unrealized gains (losses) is attributable primarily to wash sales and return of capital distributions from underlying fund investments. The cumulative timing differences consist of deferred income distributions from underlying fund investments.

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 the Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds and the Trustees and Officers of the Goldman Sachs 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 and the Trustees and Officers of the Trust. The Fund, along with 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 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.

     Based on currently available information, GSAM and GSAMI believe that the likelihood that the pending purported class action and derivative action lawsuit will have a material adverse financial impact on the Fund is remote, and the pending action is not likely to materially affect its ability to provide investment management services to its clients, including the Goldman Sachs Funds.
 
14

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 
 
8. OTHER MATTERS (continued)

New Accounting Pronouncement — On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

 
15

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND

Statement Regarding Basis for Approval of Management Agreement (Unaudited)

The Trustees oversee the management of Goldman Sachs Variable Insurance Trust (the “Trust”), and review the investment performance and expenses of the investment fund covered by this Report (the “Fund”) at regularly scheduled meetings held during the Fund’s fiscal year. In addition, the Trustees determine annually whether to approve and continue the Trust’s investment management agreement (the “Management Agreement”) with Goldman Sachs Asset Management, L.P. (the “Investment Adviser”) for the Fund.

The Management Agreement was most recently approved by the Trustees, including all of the Trustees who are not parties to the Management Agreement or “interested persons” (as defined in the Investment Company Act of 1940, as amended) of any party thereto (the “Independent Trustees”), on June 15, 2006 (the “Annual Contract Meeting”).

To assist the Trustees in their deliberations at the Annual Contract Meeting, and in addition to the reviews of the Fund’s investment performance, expenses and other matters at regularly scheduled Board meetings, the Trustees have a Contract Review Committee (the “Committee”) whose members include all of the Independent Trustees. The Committee held meetings on December 15, 2005, February 8, 2006 and May 10, 2006. At these Committee meetings, the Independent Trustees considered matters relating to the Management Agreement including: (a) the Fund’s investment performance; (b) the Fund’s management fee arrangements; (c) the Investment Adviser’s undertaking to reimburse certain expenses of the Fund that exceed a specified level; (d) the Investment Adviser’s potential economies of scale and the breakpoints for the fees payable by the Fund under the Management Agreement; (e) the relative expense level of the Fund; (f) the Investment Adviser’s profitability with respect to the Trust and the Fund; (g) information on the advisory fees charged by the Investment Adviser to institutional accounts; (h) the quality of the non-advisory services provided to the Fund; (i) the statutory and regulatory requirements applicable to the approval and continuation of mutual fund investment management agreements; (j) an evaluation of Trustees’ the contract review process provided by an outside third party; and (k) information on the processes followed by the third party mutual fund data provider engaged as part of the Trustees’ contract review (the “Outside Data Provider”) in producing investment performance and expense comparisons for the Fund.

At the Annual Contract Meeting, the Trustees reviewed the matters that were considered at the Committee meetings and also considered additional matters including: (a) a summary of fee concessions by the Investment Adviser and its affiliates with respect to the Goldman Sachs mutual funds since 2003; (b) the quality of the Investment Adviser’s services; (c) the structure, staff and capabilities of the Investment Adviser and its portfolio management team; (d) the groups within the Investment Adviser that support the portfolio management team, including the legal and compliance departments, the valuation oversight group, the risk and performance analytics group, the business planning team and the technology group; (e) the Investment Adviser’s business continuity and disaster recovery planning; (f) the Investment Adviser’s financial resources and its ability to hire and retain talented personnel; (g) the fees received by the Investment Adviser’s affiliates from the Fund for transfer agency, securities lending, distribution, portfolio brokerage and other services; (h) the terms of the Management Agreement; (i) the administrative services provided under the Management Agreement, including the nature and extent of the Investment Adviser’s oversight of the Fund’s other service providers, including the custodian and fund accounting agent; and (j) the Investment Adviser’s policies addressing various potential conflicts of interest. At the Annual Contract Meeting, the Trustees also considered at further length the Fund’s investment performance, fees and expenses, including the Fund’s expense trends over time and the breakpoints in the contractual fee rate under the Management Agreement approved in 2005.

 
16

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 
 
Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)

In connection with the Committee meetings and the Annual Contract Meeting, the Trustees received written materials and oral presentations on the topics covered, and were advised by their independent legal counsel regarding their responsibilities under applicable law. Also, in conjunction with these meetings, the Trustees attended other sessions at which the Trustees reviewed the commission rates paid by the Fund on brokerage transactions, the Investment Adviser’s receipt of research services in connection with those transactions, and the payment of Rule 12b-1 distribution and service fees that are payable by the Fund on its Service Share Class. Information was also provided to the Trustees relating to the Fund’s portfolio turnover, revenue sharing by the Investment Adviser, portfolio manager compensation, the alignment of the interests of the Fund and the portfolio managers, the number and types of accounts managed by the portfolio managers, and other matters. During the course of their deliberations, the Independent Trustees met in executive sessions without employees of the Investment Adviser present.

The presentations made at the Contract Review Committee meetings and the Annual Contract Meeting encompassed the Fund and other mutual fund portfolios for which the Board of Trustees has responsibility. While the management agreements for the Fund and these other mutual fund portfolios were approved at the same Annual Contract Meeting, the Trustees considered the Management Agreement as it applied to the Fund separately.

In evaluating the Management Agreement at the Annual Contract Meeting, the Trustees relied upon their knowledge, resulting from their meetings and other interactions throughout the year, of the Investment Adviser, its services and the Fund. At those meetings the Trustees received materials relating to the Investment Adviser’s investment management and other services under the Management Agreement, including: (a) information on the investment performance of the Fund in comparison to other mutual funds and benchmark performance indices; (b) general investment outlooks in the markets in which the Fund invests; (c) compliance reports; and (d) expenses borne by the Fund. In addition, the Trustees were provided with disclosure materials regarding the Goldman Sachs mutual funds and their expenses that are provided to investors who invest in the funds, as well as information on the Goldman Sachs mutual funds’ competitive universe and discussed the broad range of other investment choices that are available to those investors.

In connection with their approval of the Management Agreement, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. As part of their review, the Trustees considered the nature, extent and quality of the services provided by the Investment Adviser. In this regard, the Trustees considered both the investment advisory services, and the other, non-advisory services, that are provided to the Fund by the Investment Adviser and its affiliates. These services include services as the Fund’s transfer agent, securities lending agent and distributor. In addition, affiliates of the Investment Adviser receive compensation in connection with the execution of the Fund’s portfolio securities transactions. The Trustees concluded that the Investment Adviser was both able to commit substantial financial and other resources to the operations of the Fund and had, in fact, continued to commit those resources in multiple areas including portfolio management, trading, technology, human resources, tax, treasury, legal, compliance, vendor oversight and risk management. The Trustees also believed that the Investment Adviser had made significant commitments to address regulatory compliance requirements applicable to the Fund and the Investment Adviser, including education and training initiatives.

 
17

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND
 
Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)

The Trustees also considered the investment performance of the Fund and the Investment Adviser. In this regard, the Trustees compared the investment performance of the Fund to the performance of other SEC-registered funds and to rankings and ratings issued by the Outside Data Provider. The Trustees also reviewed the Fund’s investment performance relative to its performance benchmark. This information on the Fund’s investment performance was provided for one, three and five year periods. In addition, the Trustees considered the investment performance trends of the Fund over time, and reviewed the investment performance of the Fund in light of its investment objective and policies, as well as in light of periodic analyses of its quality and risk profile. In addition, the Trustees considered whether the Fund had operated within its investment policies, and its record of compliance with its investment limitations. The Trustees believed that the Fund was providing investment performance within a competitive range for long-term investors.

The Board of Trustees also considered the contractual fee rate payable by the Fund under the Management Agreement. In this regard, the Trustees considered information on the services rendered by the Investment Adviser to the Fund, which included both advisory and administrative services that were directed to the needs and operations of the Fund as a registered mutual fund. They also considered information that indicated that these mutual fund services differed in various significant respects from the services provided to the Investment Adviser’s institutional accounts, which generally paid lower fees. In addition, the fees paid by the Fund and the Fund’s total operating expense ratios (before and after expense reimbursements) were compared to similar information for mutual funds advised by other, unaffiliated investment management firms. Most of the comparisons of the Fund’s fee rates and total operating expense ratios were prepared by the Outside Data Provider.

More particularly, the Trustees reviewed analyses prepared by the Outside Data Provider of the expense rankings of the Fund. The analyses provided a comparison of the Fund’s management fee rates to a relevant peer group and a category universe; an expense analysis which compared the Fund’s expenses to a peer group and a category universe; and a five-year history comparing the Fund’s expenses to the category average. The analyses also compared the Fund’s transfer agency fees, custody and accounting fees and other expenses to a peer group and median. The Trustees believed that the comparisons provided by the Outside Data Provider were useful in evaluating the reasonableness of the management fees paid by the Fund. In addition, the Trustees considered the Investment Adviser’s voluntary undertaking to limit the Fund’s total expense ratio (excluding certain expenses) to a specified level.

 
18

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND 
 
Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)

The Board of Trustees also considered the breakpoints in the contractual fee rate under the Management Agreement for the Fund that were approved in 2005, which had been implemented at the following annual percentages of the average daily net assets of the Fund:

       0.75% on the first $1 billion, 0.68% over $1 billion up to $2 billion and 0.65% over $2 billion.

In approving these new fee breakpoints, the Trustees had reviewed information regarding the Investment Adviser’s potential economies of scale, and whether the Fund and its shareholders were participating in the benefits of these economies. In this regard, the Trustees considered the amount of assets in the Fund; the information provided by the Investment Adviser relating to the costs of the services provided by the Investment Adviser and its affiliates and the profits realized by them; and information comparing fee rates charged by the Investment Adviser with fee rates charged by other, unaffiliated investment managers to other mutual funds. Upon reviewing these matters again at the Annual Contract Meeting in 2006, the Trustees continued to believe that the fee breakpoints were a way to ensure that benefits of scalability would be passed along to shareholders at the specified asset levels.

The Trustees also considered the other benefits derived by the Investment Adviser and its affiliates from the Fund as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services, and the brokerage and research services received by the Investment Adviser in connection with the placement of brokerage transactions for the Fund. In this regard, the Trustees noted that the Investment Adviser had adopted a policy to cease obtaining third party non-broker research based on the Fund’s brokerage transactions. They also noted that during the past year the Fund had created a new share class, Service Shares, with a distribution and service plan under which an affiliate of the Investment Adviser would receive fees.

In addition, the Trustees reviewed the Investment Adviser’s pre-tax revenues and pre-tax margins with respect to the Trust and the Fund. In this regard the Trustees reviewed, among other things, profitability analyses and summaries, revenue and expense schedules, and expense allocation methodologies, as well as a report of independent accountants regarding the results of certain agreed-upon procedures to verify expense allocation calculations that were designed to assist the Trustees in their evaluation of the Investment Adviser’s schedules of revenues and expenses. The Trustees considered the Investment Adviser’s revenues and margins both in absolute terms and in comparison to the information on the reported margins earned by other asset management firms.

After deliberation and consideration of the information provided, including the factors described above, the Trustees concluded that the management fees paid by the Fund were reasonable in light of the services provided by the Investment Adviser, its costs and the Fund’s current and reasonably foreseeable asset levels, and that the Management Agreement should be approved and continued.

 
19

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH AND INCOME FUND

Fund Expenses (Unaudited) — Six Month Period Ended June 30, 2006

            As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in 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 January 1, 2006 through June 30, 2006.  
 
            Actual Expenses — The first line of 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 of 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 is not the Fund’s actual return. 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. As a shareholder of the Fund, you do not incur any transaction costs, such as sales charges (loads), redemption fees, or exchange fees, but shareholders of other funds may incur such costs. 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 whose shareholders may incur transaction costs.  

                         
Expenses Paid
for the
Beginning Ending 6 months
Account Value Account Value ended
1/1/06 6/30/06 6/30/06*
Actual
  $ 1,000     $ 1,060.20     $ 4.40  
Hypothetical 5% return
    1,000       1,020.52 +     4.32  

  *   Expenses are calculated using the Fund’s annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six months ended June 30, 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 fiscal year. The annualized expense ratio for the period was 0.86%.  
  +   Hypothetical expenses are based on the Fund’s actual annualized expense ratios and an assumed rate of return of 5% per year before expenses.  

 
20

 

     
TRUSTEES
  OFFICERS
Ashok N. Bakhru, Chairman
   Kaysie P. Uniacke, President
John P. Coblentz, Jr.
  James A. Fitzpatrick, Vice President
Patrick T. Harker
  James A. McNamara, Vice President
Mary Patterson McPherson
  John M. Perlowski, Treasurer
Alan A. Shuch
  Peter V. Bonanno, Secretary
Wilma J. Smelcer
   
Richard P. Strubel
   
Kaysie P. Uniacke
   
 
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent 		   
 
GOLDMAN SACHS ASSET MANAGEMENT, L.P.
Investment Adviser
 
Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.
 
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 the 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 September 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 1-800-621-2550.
 
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.
 
Holdings and allocations shown 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.
 
    Toll Free (in U.S.): 800-292-4726
 
This report is prepared for the general information of contract owners and is not an offer of shares of the Goldman Sachs Variable Insurance Trust: Growth and Income Fund.
 
 
Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: August 18, 2006
 
VITG&ISAR/06-1200/08-06/41.3K    

 

Goldman
Sachs Variable Insurance Trust

GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, NEW YORK, NEW YORK 10005

 
Structured U.S. Equity Fund
 
Semiannual Report
June 30, 2006
 

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Structured U.S. Equity Fund during the six-month reporting period that ended June 30, 2006.

Market Review

The S&P 500 Index returned 2.71% in the first half of 2006. Eight of the ten sectors in the Index posted positive results in the first half of the year, led by the Energy (+13.7%) and Telecommunication Services (+12.0%) sectors. The Energy sector also contributed the most (weight times performance) to Index gains. From an investment style perspective, the Russell 1000 Value Index (+6.56%) outperformed the Russell 1000 Growth Index (-0.93%) in the first half of the year. From a market cap perspective, small-cap stocks outperformed mid-and large-cap stocks, with the Russell 2000, Russell MidCap and Russell 1000 Indexes returning 8.21%, 4.84%, and 2.76%, respectively.

Investment Objective

The Fund seeks long-term capital growth and dividend income.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006*

             
% of
Company Net Assets Business
Bank of America Corp.
    3.4 %   Banks
General Electric Co.
    3.3     Industrial Conglomerates
Pfizer, Inc.
    3.1     Pharmaceuticals
Procter & Gamble Co.
    3.0     Household Products
J.P. Morgan Chase & Co.
    2.9     Diversified Financials
Cisco Systems, Inc.
    2.5     Communications Equipment
American International Group, Inc.
    2.5     Insurance
Google, Inc.
    2.3     Internet Software & Services
Hewlett-Packard Co.
    2.2     Computers & Peripherals
Time Warner, Inc.
    2.2     Media

* Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

 
1

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND
 
Shareholder Letter (continued)

Performance Review

Over the six-month period that ended June 30, 2006, the Fund’s Institutional Shares generated a cumulative total return of 2.06%. This return compares to the 2.71% cumulative total return of the Fund’s benchmark, the Standard & Poor’s 500 Index (with dividends reinvested), over the same time period. For the period from the inception of the Service Class on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of -1.11%. This compares to the -0.31% cumulative total return of the Fund’s benchmark over the same time period.

Returns to the investment themes were mixed overall for the reporting period. Earnings Quality was the biggest detractor from relative returns. Conversely, Momentum was the biggest positive contributor to excess returns, followed by Management Impact, Valuation, and Profitability. Elsewhere, Analyst Sentiment was flat for the period.

Stock selection among sectors was negative overall in the first half of the year. The Fund’s holdings in the Energy and Industrials sectors were among the least successful selections. On the upside, stock selection in the Consumer Staples and Materials sectors contributed the most to relative returns for the period.

Despite positive results for most of our investment themes, we believe the performance shortfall during the reporting period was primarily the result of residual factors, such as stock-specific events. For example, in June, Jabil Circuit, Inc., in which the Fund held an overweight position relative to the benchmark, announced that it would miss its earnings target. At the same time, the company was the subject of a stock-options probe by the Securities and Exchange Commission. We believe this probe caused its stock price to drop substantially.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Quantitative Equity Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Structured U.S. Equity Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

 
2

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 

The VIT Structured U.S. Equity Fund invests in a broadly diversified portfolio of U.S. stocks. The Fund is subject to market risks, as the share prices of the securities in the portfolio may go up or down. This could occur in response to the prospects of the companies issuing the stock, overall sector performance and/or general economic conditions.

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term Investments include repurchase agreements and securities lending collateral. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
3

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 99.4%
    Aerospace & Defense – 3.9%
      311,000     Northrop Grumman Corp.   $ 19,922,660  
      29,800     Raytheon Co.     1,328,186  
      286,539     The Boeing Co.     23,470,409  
                 
 
                  44,721,255  
   
    Banks – 7.1%
      798,522     Bank of America Corp.     38,408,908  
      303,386     Hudson City Bancorp, Inc.     4,044,135  
      13,869     M&T Bank Corp.     1,635,433  
      307,700     U.S. Bancorp     9,501,776  
      86,235     UnionBanCal Corp.     5,569,919  
      330,600     Wells Fargo & Co.     22,176,648  
                 
 
                  81,336,819  
   
    Beverages – 0.1%
      64,400     Coca-Cola Enterprises, Inc.     1,311,828  
   
    Biotechnology – 2.5%
      130,090     Amgen, Inc.*     8,485,771  
      57,500     Biogen Idec, Inc.*     2,663,975  
      27,800     Celgene Corp.*     1,318,554  
      203,200     Genentech, Inc.*     16,621,760  
                 
 
                  29,090,060  
   
    Chemicals – 1.8%
      243,500     Monsanto Co.     20,500,265  
   
    Commercial Services & Supplies – 1.4%
      34,800     Global Payments, Inc.     1,689,540  
      64,500     Manpower, Inc.     4,166,700  
      52,247     Republic Services, Inc.     2,107,644  
      211,988     Waste Management, Inc.     7,606,129  
                 
 
                  15,570,013  
   
    Communications Equipment – 2.5%
      1,478,140     Cisco Systems, Inc.*     28,868,074  
   
    Computers & Peripherals – 2.8%
      803,300     Hewlett-Packard Co.     25,448,544  
      355,800     Western Digital Corp.*     7,048,398  
                 
 
                  32,496,942  
   
    Diversified Financials – 6.5%
      180,300     AmeriCredit Corp.*     5,033,976  
      125,414     Citigroup, Inc.     6,049,971  
      782,000     J.P. Morgan Chase & Co.     32,844,000  
      328,000     Merrill Lynch & Co., Inc.     22,815,680  
      58,080     Moody’s Corp.     3,163,037  
      82,900     Principal Financial, Inc.     4,613,385  
                 
 
                  74,520,049  
   
    Diversified Telecommunication Services – 3.1%
      662,000     AT&T, Inc.     18,463,180  
      166,500     CenturyTel, Inc.     6,185,475  
      130,185     Embarq Corp.*     5,336,285  
      293,201     Sprint Nextel Corp.     5,861,088  
      1     Verizon Communications, Inc.     34  
                 
 
                  35,846,062  
   
    Electric Utilities – 4.0%
      249,700     American Electric Power Co., Inc.     8,552,225  
      490,700     PG&E Corp.     19,274,696  
      34,800     Progress Energy, Inc.     1,491,876  
      273,370     TXU Corp.     16,344,792  
                 
 
                  45,663,589  
   
    Electrical Equipment – 0.7%
      37,300     Emerson Electric Co.     3,126,113  
      79,300     Energizer Holdings, Inc.*     4,644,601  
                 
 
                  7,770,714  
   
    Electronic Equipment & Instruments – 0.9%
      21,516     Agilent Technologies, Inc.*     679,045  
      224,500     Jabil Circuit, Inc.     5,747,200  
      61,402     PerkinElmer, Inc.     1,283,302  
      47,656     Waters Corp.*     2,115,926  
                 
 
                  9,825,473  
   
    Energy Equipment & Services – 1.7%
      300,000     Schlumberger Ltd.     19,533,000  
   
    Food & Drug Retailing – 0.9%
      151,400     Safeway, Inc.     3,936,400  
      64,287     SUPERVALU, Inc.     1,973,611  
      207,200     The Kroger Co.     4,529,392  
                 
 
                  10,439,403  
   
    Food Products – 2.7%
      517,200     Archer-Daniels-Midland Co.     21,350,016  
      37,279     Dean Foods Co.*     1,386,406  
      578,100     Tyson Foods, Inc.     8,590,566  
                 
 
                  31,326,988  
   
    Healthcare Equipment & Supplies – 0.4%
      137,400     Applera Corp. – Applied Biosystems Group     4,444,890  
   
    Healthcare Providers & Services – 4.4%
      453,894     AmerisourceBergen Corp.     19,027,237  
      224,200     Express Scripts, Inc.*     16,084,108  
      27,369     Humana, Inc.*     1,469,715  
      280,800     McKesson Corp.     13,276,224  
                 
 
                  49,857,284  
   
    Hotels, Restaurants & Leisure – 1.5%
      244,400     Darden Restaurants, Inc.     9,629,360  
      152,200     Starbucks Corp.*     5,747,072  
      23,800     Yum! Brands, Inc.     1,196,426  
                 
 
                  16,572,858  
   
    Household Durables – 0.1%
      19,600     Whirlpool Corp.     1,619,940  
   
    Household Products – 3.5%
      85,700     Colgate-Palmolive Co.     5,133,430  
      623,165     Procter & Gamble Co.     34,647,974  
                 
 
                  39,781,404  
   
 
The accompanying notes are an integral part of these financial statements.

4

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Industrial Conglomerates – 3.8%
      1,131,188     General Electric Co.   $ 37,283,956  
      54,123     Reynolds American, Inc.     6,240,382  
                 
 
                  43,524,338  
   
    Insurance – 9.0%
      41,330     AMBAC Financial Group, Inc.     3,351,863  
      476,400     American International Group, Inc.     28,131,420  
      365,500     Genworth Financial, Inc.     12,734,020  
      21,000     Lincoln National Corp.     1,185,240  
      561,500     Loews Corp.     19,905,175  
      305,263     MBIA, Inc.(a)     17,873,149  
      22,700     MetLife, Inc.     1,162,467  
      15,395     Nationwide Financial Services, Inc.     678,612  
      55,500     Radian Group, Inc.     3,428,790  
      196,300     The Chubb Corp.     9,795,370  
      120,750     W.R. Berkley Corp.     4,121,197  
                 
 
                  102,367,303  
   
    Internet Software & Services – 2.3%
      62,990     Google, Inc.*     26,413,597  
   
    IT Consulting & Services – 1.5%
      337,700     Computer Sciences Corp.*     16,358,188  
      24,200     First Data Corp.     1,089,968  
                 
 
                  17,448,156  
   
    Leisure Equipment & Products – 0.1%
      86,600     Hasbro, Inc.     1,568,326  
   
    Machinery – 1.0%
      139,696     Caterpillar, Inc.     10,404,558  
      18,000     Eaton Corp.     1,357,200  
                 
 
                  11,761,758  
   
    Media – 7.0%
      440,730     CBS Corp. Class B     11,921,747  
      586,654     Clear Channel Communications, Inc.     18,156,941  
      50,955     Liberty Media Holding Corp. – Capital*     4,268,500  
      203,340     The McGraw-Hill Companies, Inc.     10,213,768  
      332,786     The Walt Disney Co.     9,983,580  
      1,455,729     Time Warner, Inc.     25,184,112  
                 
 
                  79,728,648  
   
    Metals & Mining – 0.4%
      22,100     Newmont Mining Corp.     1,169,753  
      65,428     Nucor Corp.     3,549,469  
                 
 
                  4,719,222  
   
    Multiline Retail – 0.2%
      85,300     Dillard’s, Inc.     2,716,805  
   
    Oil & Gas – 7.6%
      423,536     Anadarko Petroleum Corp.     20,198,432  
      361,700     Devon Energy Corp.     21,850,297  
      42,200     EOG Resources, Inc.     2,926,148  
      53,900     Equitable Resources, Inc.     1,805,650  
      314,466     Exxon Mobil Corp.     19,292,489  
      232,900     Sunoco, Inc.     16,137,641  
      68,420     Ultra Petroleum Corp.*     4,055,253  
                 
 
                  86,265,910  
   
    Paper & Forest Products – 0.1%
      45,900     Louisiana-Pacific Corp.     1,005,210  
   
    Pharmaceuticals – 6.1%
      188,482     Johnson & Johnson     11,293,841  
      594,100     Merck & Co., Inc.     21,643,063  
      1,507,515     Pfizer, Inc.     35,381,377  
      38,100     Watson Pharmaceuticals, Inc.*     886,968  
                 
 
                  69,205,249  
   
    Real Estate – 0.9%
      31,100     AMB Property Corp. (REIT)     1,572,105  
      13,100     Boston Properties, Inc. (REIT)     1,184,240  
      47,100     New Century Financial Corp.(a)     2,154,825  
      92,100     ProLogis (REIT)     4,800,252  
                 
 
                  9,711,422  
   
    Road & Rail – 0.4%
      13,600     Burlington Northern Santa Fe Corp.     1,077,800  
      24,200     Norfolk Southern Corp.     1,287,924  
      22,500     Union Pacific Corp.     2,091,600  
                 
 
                  4,457,324  
   
    Semiconductor Equipment & Products – 1.8%
      61,609     Freescale Semiconductor, Inc. Class B*     1,811,305  
      612,552     Texas Instruments, Inc.     18,554,200  
                 
 
                  20,365,505  
   
    Software – 1.7%
      65,400     Fair Isaac Corp.     2,374,674  
      409,940     Microsoft Corp.     9,551,602  
      42,900     Red Hat, Inc.*     1,003,860  
      245,311     Synopsys, Inc.*     4,604,487  
      43,989     VeriFone Holdings, Inc.*     1,340,785  
                 
 
                  18,875,408  
   
    Specialty Retail – 2.4%
      446,694     AutoNation, Inc.*     9,577,120  
      278,456     Circuit City Stores, Inc.     7,579,572  
      225,488     Office Depot, Inc.*     8,568,544  
      49,400     United Rentals, Inc.*     1,579,812  
                 
 
                  27,305,048  
   
    Textiles & Apparel – 0.2%
      62,002     Jones Apparel Group, Inc.     1,971,044  
   
    Tobacco – 0.3%
      24,100     Loews Corp. – Carolina Group     1,238,017  
      42,667     UST, Inc.(a)     1,928,122  
                 
 
                  3,166,139  
   
 
The accompanying notes are an integral part of these financial statements.

5

 

Schedule of Investments (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND
                     
Shares Description Value
   
Common Stocks – (continued)
    Wireless Telecommunication Services – 0.1%
      10,700     United States Cellular Corp.*   $ 648,420  
   
    TOTAL COMMON STOCKS
    (Cost $1,054,731,822)   $ 1,134,321,742  
   
                             
Principal Interest Maturity
Amount Rate Date Value
   
Repurchase Agreement(b) – 0.4%
    Joint Repurchase Agreement Account II
    $ 4,500,000       5.28 %   07/03/2006   $ 4,500,000  
    Maturity Value:  $4,501,979
    (Cost $4,500,000)        
   
    TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
    (Cost $1,059,231,822)   $ 1,138,821,742  
   
                     
Shares Description Value
   
Securities Lending Collateral – 1.5%
      17,015,200     Boston Global Investment Trust – Enhanced Portfolio   $ 17,015,200  
    (Cost $17,015,200)        
   
    TOTAL INVESTMENTS – 101.3%
    (Cost $1,076,247,022)   $ 1,155,836,942  
   
    LIABILITIES IN EXCESS OF
  OTHER ASSETS – (1.3)%		     (14,414,273 )
   
    NET ASSETS – 100.0%   $ 1,141,422,669  
   

  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) All or portion of security is on loan.
 
 (b) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment information appears on page 7.
             
   
    Investment Abbreviation:
    REIT   —   Real Estate Investment Trust
   

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At June 30, 2006, the following futures contracts were open as follows:

                                 
Number of Settlement Unrealized
Type Contracts Long Month Market Value Gain
S&P 500 Index
    88       September 2006     $ 5,629,360     $ 119,020  
 
The accompanying notes are an integral part of these financial statements.

6

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 
 
ADDITIONAL INVESTMENT INFORMATION (continued)

JOINT REPURCHASE AGREEMENT ACCOUNT II — At June 30, 2006, the Fund had an undivided interest in the following Joint Repurchase Agreement Account II which equaled $4,500,000 in principal amount.

                             
Principal Interest Maturity Maturity
Repurchase Agreements Amount Rate Date Value
Banc of America Securities LLC
  $ 2,860,000,000       5.30 %   07/03/2006   $ 2,861,263,167  
Barclays Capital PLC
    1,500,000,000       5.32     07/03/2006     1,500,665,000  
Bear Stearns
    500,000,000       5.31     07/03/2006     500,221,250  
Deutsche Bank Securities, Inc.
    1,000,000,000       5.20     07/03/2006     1,000,433,333  
Greenwich Capital Markets
    300,000,000       5.32     07/03/2006     300,133,000  
J.P. Morgan Securities, Inc.
    400,000,000       5.28     07/03/2006     400,176,000  
Merrill Lynch
    500,000,000       5.25     07/03/2006     500,218,750  
Morgan Stanley & Co.
    3,000,000,000       5.25     07/03/2006     3,001,312,500  
UBS Securities LLC
    1,050,000,000       5.25     07/03/2006     1,050,459,375  
UBS Securities LLC
    475,000,000       5.30     07/03/2006     475,209,792  
UBS Securities LLC
    400,000,000       5.34     07/03/2006     400,178,000  
Wachovia Capital Markets
    250,000,000       5.26     07/03/2006     250,109,583  
TOTAL
   $ 12,235,000,000                 $ 12,240,379,750  
  At June 30, 2006, the Joint Repurchase Agreement Account II was fully collateralized by Federal Home Loan Bank, 0.00% to 11.00%, due 07/07/2006 to 04/20/2016; Federal Home Loan Mortgage Association, 3.00% to 8.50%, due 02/01/2007 to 07/01/2036; Federal National Mortgage Association, 0.00% to 10.50%, due 02/01/2007 to 07/01/2036; and U.S. Treasury Bonds, 5.00% to 7.14%, due 11/13/2008 to 10/20/2018. The aggregate market value of the collateral, including accrued interest, was $12,492,409,737.  
 
The accompanying notes are an integral part of these financial statements.

7

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)
               
 
    Assets:
   
Investment in securities, at value (identified cost $1,059,231,822) — including $16,654,409 of securities on loan
  $ 1,138,821,742  
   
Securities lending collateral, at value (cost $17,015,200)
    17,015,200  
   
Cash(a)
    1,755,787  
   
Receivables:
       
     
Dividends and interest
    1,551,280  
     
Fund shares sold
    775,962  
     
Securities lending income
    1,325  
   
Other assets
    7,731  
   
   
Total assets
     1,159,929,027  
   
    Liabilities:
   
Payables:
       
     
Payable upon return of securities loaned
    17,015,200  
     
Fund shares repurchased
    738,652  
     
Amounts owed to affiliates
    649,811  
     
Variation margin
    14,080  
   
Accrued expenses
    88,615  
   
   
Total liabilities
     18,506,358  
   
    Net Assets:
   
Paid-in capital
    1,019,650,046  
   
Accumulated undistributed net investment income
    6,128,025  
   
Accumulated net realized gain on investment and futures
    35,935,658  
   
Net unrealized gain on investments and futures
    79,708,940  
   
   
NET ASSETS
   $ 1,141,422,669  
   
   
Net assets:
       
     
Institutional
  $ 877,481,669  
     
Service
    263,941,000  
   
   
Shares outstanding:
       
     
Institutional
    65,499,050  
     
Service
    19,708,819  
   
   
Total shares of beneficial interest outstanding, $0.001 par value (unlimited shares authorized)
    85,207,869  
   
   
Net asset value, offering and redemption price per share:
       
     
Institutional
  $ 13.40  
     
Service
  $ 13.39  
   

(a)  Includes restricted cash of $1,351,150 relating to initial margin requirements on futures transactions.

 
The accompanying notes are an integral part of these financial statements.

8

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 

Statement of Operations

For the Six Months Ended June 30, 2006 (Unaudited)
               
    Investment income:
   
Dividends
  $ 9,575,841  
   
Interest (including securities lending income of $11,904)
    233,031  
   
   
Total income
     9,808,872  
   
    Expenses:
   
Management fees
    3,616,174  
   
Distribution and Service fees
    332,415  
   
Transfer agent fees
    225,143  
   
Custody and accounting fees
    96,378  
   
Printing fees
    91,310  
   
Professional fees
    29,712  
   
Trustee fees
    6,803  
   
Registration fees
    629  
   
Other
    11,617  
   
   
Total expenses
     4,410,181  
   
   
Less — expense reductions
    (228,850 )
   
   
Net expenses
     4,181,331  
   
   
NET INVESTMENT INCOME
     5,627,541  
   
    Realized and unrealized gain (loss) on investment and future transactions:
   
Net realized gain (loss) from:
       
     
Investment transactions
    60,987,372  
     
Futures transactions
    (439,472 )
   
Net change in unrealized gain (loss) on:
       
     
Investments
    (53,229,833 )
     
Futures
    248,874  
   
   
Net realized and unrealized gain on investment and future transactions
     7,566,941  
   
   
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 13,194,482  
   
 
The accompanying notes are an integral part of these financial statements.

9

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

Statements of Changes in Net Assets

                       
For the
Six Months Ended For the
June 30, 2006 Year Ended
(Unaudited) December 31, 2005
    From operations:
   
Net investment income
  $ 5,627,541     $ 6,468,007  
   
Net realized gain on investment and futures
    60,547,900       20,646,992  
   
Payment by affiliates to reimburse certain security claims
    —       1,193  
   
Net change in unrealized gain (loss) on investments and futures
    (52,980,959 )     25,704,439  
   
   
Net increase in net assets resulting from operations
   $ 13,194,482       52,820,631  
   
    Distributions to shareholders:
   
From net investment income
               
     
Institutional Shares
    —       (6,029,395 )
     
Service Shares
    —       —  
   
   
Total distributions to shareholders
     —       (6,029,395 )
   
    From share transactions:
   
Proceeds from sales of shares
    71,903,127       283,997,163  
   
Proceeds received in connection with merger
    286,785,341       —  
   
Reinvestment of dividends and distributions
    —       6,029,395  
   
Cost of shares repurchased
    (50,854,775 )     (37,560,740 )
   
   
Net increase in net assets resulting from share transactions
     307,833,693       252,465,818  
   
   
TOTAL INCREASE
     321,028,175       299,257,054  
   
    Net assets:
   
Beginning of period
    820,394,494       521,137,440  
   
   
End of period
  $ 1,141,422,669     $ 820,394,494  
   
   
Accumulated undistributed net investment income
   $ 6,128,025     $ 500,484  
   
 
The accompanying notes are an integral part of these financial statements.

10

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                 
Income (loss) from Ratios assuming no
investment operations expense reductions
Net Distributions to Ratio of Ratio of Ratio of
Net asset realized shareholders Net asset Net assets, Ratio of net investment total net investment
value, Net and Total from from net value, end of net expenses income to expenses income Portfolio
beginning investment unrealized investment investment end of Total period to average average to average to average turnover
Year — Share Class of period income(b) gain (loss) operations income period return(c) (in 000s) net assets net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)
    2006 — Institutional   $ 13.13     $ 0.07     $ 0.20     $ 0.27     $ —     $ 13.40       2.06 %   $ 877,482       0.72 %(d)     1.02 %(d)     0.72 %(d)     1.02 %(d)     40 %    
    2006 — Service(a)     13.54       0.06       (0.21 )     (0.15 )     —       13.39       (1.11 )     263,941       0.80 (d)     0.94 (d)     0.97 (d)     0.77 (d)     40      
   
    For the Years ended December 31,
    2005 — Institutional     12.42       0.13       0.68       0.81       (0.10 )     13.13       6.51       820,394       0.74       1.00       0.76       0.99       109      
    2004 — Institutional     10.92       0.14       1.49       1.63       (0.13 )     12.42       14.94       521,137       0.75       1.26       0.78       1.23       128      
    2003 — Institutional     8.49       0.07       2.43       2.50       (0.07 )     10.92       29.47       383,025       0.85       0.79       0.85       0.79       92      
    2002 — Institutional     10.94       0.06       (2.45 )     (2.39 )     (0.06 )     8.49       (21.89 )     143,439       0.85       0.60       0.86       0.59       84      
    2001 — Institutional     12.48       0.05       (1.54 )     (1.49 )     (0.05 )     10.94       (11.94 )     163,904       0.81       0.48       0.82       0.47       72      
   

(a)  Service Share Class commenced on January 9, 2006.
(b)  Calculated based on the average shares outstanding methodology.
(c)  Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than a full year are not annualized.
(d)  Annualized.

The accompanying notes are an integral part of these financial statements.

 
11

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

Notes to Financial Statements

June 30, 2006 (Unaudited)

1. ORGANIZATION

Goldman Sachs Variable Insurance 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 Structured U.S. Equity Fund (the “Fund”) (formerly Goldman Sachs CORE U.S. Equity). The Fund is a diversified portfolio under the Act offering two classes of shares — Institutional and Service.
     Shares of the Trust may be purchased and held by separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Trust are not offered directly to the general public.

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 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 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. Service Shares bear all expenses and fees relating to their Distribution and Service Plan.

D. Federal Taxes and Distributions to Shareholders — 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 provisions are required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gains distributions, if any, are declared and paid annually.

     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules which may differ from generally accepted accounting principles. Therefore, the source of the Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain, or from tax return of capital.
     In addition, distributions paid by the Fund’s investments in real estate investment trusts (“REITs”) often include a “return of capital” which is recorded by the Fund as a reduction of the cost basis of the securities held. The Code requires a REIT to distribute at least 95% of its taxable income to investors. In many cases, however, because of “non-cash” expenses such as property depreciation, a REIT’s cash flow will exceed its taxable income. The REIT may distribute this excess cash to offer a more competitive yield. This portion of the distribution is deemed a return of capital and is generally not taxable to shareholders.
 
12

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

E. 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 counterparties, with a current value equal to or greater than the market value of the corresponding transactions.

F. 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.

     Pursuant to exemptive relief granted by the Securities and Exchange Commission (“SEC”) and terms and conditions contained therein, the Fund, together with other registered investment companies having management or investment advisory agreements with Goldman Sachs Asset Management, L.P. (“GSAM”), or its affiliates may transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

G. Futures Contracts — The Fund may enter into futures transactions to hedge against changes in interest rates, securities prices, currency exchange rates or to seek to increase total return. Futures contracts are valued at the last settlement price at the end of each day on the board of trade or exchange upon which they are traded. Upon entering into a futures contract, the Fund is required to deposit with a broker, or the Fund’s custodian bank on behalf of the broker an amount of cash or securities equal to the minimum “initial margin” requirement of the associated futures exchange. Subsequent payments for futures contracts (“variation margin”) are paid or received by the Fund daily, dependent on the daily fluctuations in the value of the contracts, and are recorded for financial reporting purposes as unrealized gains or losses. When contracts are closed, the Fund realizes a gain or loss which is reported in the Statement of Operations.

     The use of futures contracts involve, to varying degrees, elements of market and counterparty risk which may exceed the amounts recognized in the Statement of Assets and Liabilities. Changes in the value of the futures contract may not directly correlate with changes in the value of the underlying securities. This risk may decrease the effectiveness of the Fund’s strategies and potentially result in a loss.

3. AGREEMENTS

GSAM, an affiliate of Goldman, Sachs & Co. (“Goldman Sachs”), serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Fund. Under this Agreement, GSAM manages the Fund, subject to the general supervision of the Trust’s Board of Trustees.
     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAM is entitled to a fee (“Management fee”) computed daily and payable monthly, equal to an annual percentage rate of the Fund’s average daily net assets.
     The Investment Adviser has entered into a fee reduction commitment for the Fund which was implemented on a voluntary basis beginning on July 1, 2005 and on a contractual basis as of April 28, 2006 to achieve the rates listed below:
         
Average Daily Net Assets Annual Rate
First $1 Billion
    0.65 %
Next $1 Billion
    0.59 %
Over $2 Billion
    0.56 %
 
13

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

3. AGREEMENTS (continued)

     In connection with the reorganization of the Allmerica Core Equity Fund into the Fund, GSAM has contractually agreed to reimburse the Fund as necessary to limit the total annual operating expenses of the Services Shares of the Fund to 0.81% until June 2007.

     GSAM has voluntarily agreed to limit certain “Other Expenses” of the Fund (excluding Management fees, Transfer Agency fees and expenses, taxes, interest, brokerage fees and litigation, indemnification costs, shareholder meeting and other extraordinary expenses exclusive of any expense offset arrangements) to the extent that such expenses exceed, on an annual basis, 0.044% of the average daily net assets of the Fund. Prior to January 9, 2006, the Other Expense limitation for the Fund was 0.16%. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Fund is not obligated to reimburse GSAM for prior fiscal year expense reimbursements, if any. For the six months ended June 30, 2006, GSAM made no reimbursements to the Fund.
     The Fund has entered into certain offset arrangements with the custodian resulting in a reduction in the Fund’s expenses. For the six months ended June 30, 2006, custody fees were reduced by approximately $3,200.
     Goldman Sachs also serves as Transfer Agent of the Fund for a fee. Fees charged for such transfer agency services are calculated daily and payable monthly equal to an annual rate of 0.04% of the average daily net assets of the Fund. Goldman Sachs serves as the distributor of the Fund’s shares at no cost to the Fund.
     The Trust has adopted, on behalf of Service Shares of the Fund, a Distribution and Service plan (the “Plan”). Under the Plan, Goldman Sachs is entitled to a monthly fee for distribution services equal to, on an annual basis, 0.25% of the Fund’s average daily net assets attributable to Service Shares. GSAM has voluntarily agreed to waive Distribution and Service Shares so as not to exceed 0.08% for the Fund. This waiver may be modified or terminated at any time at the option of Goldman Sachs. For the six months ended June 30, 2006, GSAM waived $225,645 in Distribution and Service fees for the Fund.
     At June 30, 2006, amounts owed to affiliates were approximately $596,000, $17,000 and $37,000 for Management, Distribution and Service, and Transfer Agent fees, respectively.

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long term securities for the six months ended June 30, 2006, were $729,152,268 and $696,321,287, respectively. For the six months ended June 30, 2006, Goldman Sachs earned approximately $4,000 of brokerage commissions from portfolio transactions, including futures transactions, executed on behalf of the Fund.

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 Fund 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.
     Both the Fund and BGA receive compensation relating to the lending of the Fund’s securities. The amount earned by the Fund for the six months ended June 30, 2006, is reported parenthetically on the Statement of Operations. A portion of this amount, $572, represents compensation earned by the Fund from lending its securities to Goldman Sachs. For the six months ended June 30, 2006, BGA earned approximately $2,100 in fees as securities lending agent. At June 30, 2006, the Fund loaned securities having a market value of $16,654,409 collateralized by cash in the amount of $17,015,200. The amount
 
14

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 

5. SECURITIES LENDING (continued)

payable to Goldman Sachs upon return of securities loaned as of June 30, 2006 was $2,057,000. The Fund invests the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by GSAM, for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Fund bears the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.

6. LINE OF CREDIT FACILITY

The Fund participates in a $400,000,000 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 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. This 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 June 30, 2006, the Fund did not have any borrowings under this facility.

7. TAX INFORMATION

As of the Fund’s most recent fiscal year end December 31, 2005, the Fund’s capital loss carryforwards and certain timing differences on a tax basis were as follows.
         
Capital loss carryforward:(1)(2)
       
Expiring 2009
  $ (6,318,404 )
Expiring 2010
    (13,059,084 )
Expiring 2011
    (2,163,043 )
Total capital loss carryforward
  $ (21,540,531 )
Timing differences (related to the deferral of certain REIT dividends for tax purposes)
    16,766  

(1)  Expiration occurs on December 31 of the year indicated utilization of these losses may be limited under the Code.
(2)  During the year ended December 31, 2005, the Fund utilized $22,704,467 of capital loss carryforwards.

     At June 30, 2006, the Fund’s aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes were as follows:

         
Tax cost
  $ 1,083,291,544  
Gross unrealized gain
    101,444,318  
Gross unrealized loss
    (28,898,920 )
Net unrealized security gain
  $ 72,545,398  

     The difference between book-basis and tax-basis unrealized gains (losses) is attributable primarily to wash sales financial futures contracts. The cumulative timing differences consists of deferred income distributions from underlying fund investments.

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 the Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds and the Trustees and Officers of the Goldman Sachs Trust. In June
 
15

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

8. OTHER MATTERS (continued)

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 and the Trustees and Officers of the Trust. The Fund, along with 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 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.
     Based on currently available information, GSAM and GSAMI believe that the likelihood that the pending purported class action and derivative action lawsuit will have a material adverse financial impact on the Fund is remote, and the pending action is not likely to materially affect its ability to provide investment management services to its clients, including the Goldman Sachs Funds.

Merger and Reorganizations — At a meeting held on July 12, 2005, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization (the “Agreement”) providing for the tax-free acquisition of the Allmerica Investment Trust Core Equity Fund by the Goldman Sachs VIT Structured U.S. Equity Fund. Following the approval of the Board of Trustees and shareholders of the Allmerica Investment Trust Core Equity Fund, the acquisition was completed on January 9, 2006.

     Pursuant to the Agreement, the assets and liabilities of the Allmerica Investment Core Equity Fund Service Class were transferred into the Goldman Sachs VIT Structured U.S. Equity Fund Service Class in a tax-free exchange as follows:
                         
Acquired Fund’s
Shares
Exchanged Shares Value of Outstanding
Survivor/Acquired Fund of Survivor Issued Exchanged Shares on January 6, 2006
Goldman Sachs VIT Structured U.S. Equity Fund Service Class/ Allmerica Investment Trust Core Equity Fund Service Class
    21,180,601     $ 286,785,341       154,899,319  

     The following chart shows the Survivor Fund’s and Acquired Fund’s aggregate net assets (immediately before and after the completion of the acquisition) and the Acquired Fund’s unrealized appreciation.

                                 
Survivor Fund’s Acquired Fund’s Survivor Fund’s
Aggregate Aggregate Aggregate
Net Assets Net Assets Acquired Fund’s Net Assets
before before Unrealized immediately
Survivor/Acquired Fund acquisition acquisition Appreciation after acquisition
Goldman Sachs VIT Structured U.S. Equity Fund/ Allmerica Investment Trust Core Equity Fund
  $ 846,672,156     $ 286,785,341     $ 53,289,382     $ 1,133,457,497  

New Accounting Pronouncement — On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how

 
16

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 

8. OTHER MATTERS (continued)

uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

9. SUMMARY OF SHARE TRANSACTIONS

Share activity is as follows:
                                 
For the Six Months Ended For the Year Ended
June 30, 2006 December 31, 2005
Shares Dollars Shares Dollars
Institutional Shares
                                
Shares sold
    4,545,178     $ 61,599,907       23,122,045     $ 283,997,163  
Reinvestment of dividends and distributions
    —       —       461,669       6,029,395  
Shares repurchased
    (1,538,129 )     (20,734,792 )     (3,060,370 )     (37,560,740 )
      3,007,049       40,865,115       20,523,344       252,465,818  
Service Shares*
                                
Shares sold
    776,307       10,303,220       —       —  
Shares issued in connection with merger
    21,180,601       286,785,341       —       —  
Reinvestment of dividends and distributions
    —       —       —       —  
Shares repurchased
    (2,248,089 )     (30,119,983 )     —       —  
      19,708,819       266,968,578       —       —  
NET INCREASE
     22,716,468     $ 307,833,693       20,523,344     $ 252,465,818  

*  Service Share Class commenced on January 9, 2006.

 
17

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND

Statement Regarding Basis for Approval of Management Agreement (Unaudited)

     The Trustees oversee the management of Goldman Sachs Variable Insurance Trust (the “Trust”), and review the investment performance and expenses of the investment fund covered by this Report (the “Fund”) at regularly scheduled meetings held during the Fund’s fiscal year. In addition, the Trustees determine annually whether to approve and continue the Trust’s investment management agreement (the “Management Agreement”) with Goldman Sachs Asset Management, L.P. (the “Investment Adviser”) for the Fund.

     The Management Agreement was most recently approved by the Trustees, including all of the Trustees who are not parties to the Management Agreement or “interested persons” (as defined in the Investment Company Act of 1940, as amended) of any party thereto (the “Independent Trustees”), on June 15, 2006 (the “Annual Contract Meeting”).
     To assist the Trustees in their deliberations at the Annual Contract Meeting, and in addition to the reviews of the Fund’s investment performance, expenses and other matters at regularly scheduled Board meetings, the Trustees have a Contract Review Committee (the “Committee”) whose members include all of the Independent Trustees. The Committee held meetings on December 15, 2005, February 8, 2006 and May 10, 2006. At these Committee meetings, the Independent Trustees considered matters relating to the Management Agreement including: (a) the Fund’s investment performance; (b) the Fund’s management fee arrangements; (c) the Investment Adviser’s undertaking to reimburse certain expenses of the Fund that exceed a specified level; (d) the Investment Adviser’s potential economies of scale and the breakpoints for the fees payable by the Fund under the Management Agreement; (e) the relative expense level of the Fund; (f) the Investment Adviser’s profitability with respect to the Trust and the Fund; (g) information on the advisory fees charged by the Investment Adviser to institutional accounts; (h) the quality of the non-advisory services provided to the Fund; (i) the statutory and regulatory requirements applicable to the approval and continuation of mutual fund investment management agreements; (j) an evaluation of Trustees’ the contract review process provided by an outside third party; and (k) information on the processes followed by the third party mutual fund data provider engaged as part of the Trustees’ contract review (the “Outside Data Provider”) in producing investment performance and expense comparisons for the Fund.
     At the Annual Contract Meeting, the Trustees reviewed the matters that were considered at the Committee meetings and also considered additional matters including: (a) a summary of fee concessions by the Investment Adviser and its affiliates with respect to the Goldman Sachs mutual funds since 2003; (b) the quality of the Investment Adviser’s services; (c) the structure, staff and capabilities of the Investment Adviser and its portfolio management team; (d) the groups within the Investment Adviser that support the portfolio management team, including the legal and compliance departments, the valuation oversight group, the risk and performance analytics group, the business planning team and the technology group; (e) the Investment Adviser’s business continuity and disaster recovery planning; (f) the Investment Adviser’s financial resources and its ability to hire and retain talented personnel; (g) the fees received by the Investment Adviser’s affiliates from the Fund for transfer agency, securities lending, distribution, portfolio brokerage and other services; (h) the terms of the Management Agreement; (i) the administrative services provided under the Management Agreement, including the nature and extent of the Investment Adviser’s oversight of the Fund’s other service providers, including the custodian and fund accounting agent; and (j) the Investment Adviser’s policies addressing various potential conflicts of interest. At the Annual Contract Meeting, the Trustees also considered at further length the Fund’s investment performance, fees and expenses, including the Fund’s expense trends over time and the breakpoints in the contractual fee rate under the Management Agreement approved in 2005.
     In connection with the Committee meetings and the Annual Contract Meeting, the Trustees received written materials and oral presentations on the topics covered, and were advised by their independent legal counsel regarding their responsibilities under applicable law. Also, in conjunction with these meetings, the Trustees attended other sessions at which the Trustees reviewed the commission rates paid by the Fund on brokerage transactions, the Investment Adviser’s receipt of research services in connection with those transactions, and the payment of Rule 12b-1 distribution and service fees that are payable by the Fund on its Service Share Class. Information was also provided to the Trustees relating to the Fund’s portfolio turnover, revenue sharing by the Investment Adviser, portfolio manager compensation, the alignment of the interests of the Fund and the portfolio managers, the number and types of accounts managed by the portfolio managers, and other matters. During the course of their deliberations, the Independent Trustees met in executive sessions without employees of the Investment Adviser present.
     The presentations made at the Contract Review Committee meetings and the Annual Contract Meeting encompassed the Fund and other mutual fund portfolios for which the Board of Trustees has responsibility. While the management agreements
 
18

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 
 
Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)

for the Fund and these other mutual fund portfolios were approved at the same Annual Contract Meeting, the Trustees considered the Management Agreement as it applied to the Fund separately.

     In evaluating the Management Agreement at the Annual Contract Meeting, the Trustees relied upon their knowledge, resulting from their meetings and other interactions throughout the year, of the Investment Adviser, its services and the Fund. At those meetings the Trustees received materials relating to the Investment Adviser’s investment management and other services under the Management Agreement, including: (a) information on the investment performance of the Fund in comparison to other mutual funds and benchmark performance indices; (b) general investment outlooks in the markets in which the Fund invests; (c) compliance reports; and (d) expenses borne by the Fund. In addition, the Trustees were provided with disclosure materials regarding the Goldman Sachs mutual funds and their expenses that are provided to investors who invest in the funds, as well as information on the Goldman Sachs mutual funds’ competitive universe and discussed the broad range of other investment choices that are available to those investors.
     In connection with their approval of the Management Agreement, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. As part of their review, the Trustees considered the nature, extent and quality of the services provided by the Investment Adviser. In this regard, the Trustees considered both the investment advisory services, and the other, non-advisory services, that are provided to the Fund by the Investment Adviser and its affiliates. These services include services as the Fund’s transfer agent, securities lending agent and distributor. In addition, affiliates of the Investment Adviser receive compensation in connection with the execution of the Fund’s portfolio securities transactions. The Trustees concluded that the Investment Adviser was both able to commit substantial financial and other resources to the operations of the Fund and had, in fact, continued to commit those resources in multiple areas including portfolio management, trading, technology, human resources, tax, treasury, legal, compliance, vendor oversight and risk management. The Trustees also believed that the Investment Adviser had made significant commitments to address regulatory compliance requirements applicable to the Fund and the Investment Adviser, including education and training initiatives.
     The Trustees also considered the investment performance of the Fund and the Investment Adviser. In this regard, the Trustees compared the investment performance of the Fund to the performance of other SEC-registered funds and to rankings and ratings issued by the Outside Data Provider. The Trustees also reviewed the Fund’s investment performance relative to its performance benchmark. This information on the Fund’s investment performance was provided for one, three and five year periods. In addition, the Trustees considered the investment performance trends of the Fund over time, and reviewed the investment performance of the Fund in light of its investment objective and policies, as well as in light of periodic analyses of its quality and risk profile. In addition, the Trustees considered whether the Fund had operated within its investment policies, and its record of compliance with its investment limitations. The Trustees believed that the Fund was providing investment performance within a competitive range for long-term investors.
     The Board of Trustees also considered the contractual fee rate payable by the Fund under the Management Agreement. In this regard, the Trustees considered information on the services rendered by the Investment Adviser to the Fund, which included both advisory and administrative services that were directed to the needs and operations of the Fund as a registered mutual fund. They also considered information that indicated that these mutual fund services differed in various significant respects from the services provided to the Investment Adviser’s institutional accounts, which generally paid lower fees. In addition, the fees paid by the Fund and the Fund’s total operating expense ratios (before and after expense reimbursements) were compared to similar information for mutual funds advised by other, unaffiliated investment management firms. Most of the comparisons of the Fund’s fee rates and total operating expense ratios were prepared by the Outside Data Provider.
     More particularly, the Trustees reviewed analyses prepared by the Outside Data Provider of the expense rankings of the Fund. The analyses provided a comparison of the Fund’s management fee rates to a relevant peer group and a category universe; an expense analysis which compared the Fund’s expenses to a peer group and a category universe; and a five-year history comparing the Fund’s expenses to the category average. The analyses also compared the Fund’s transfer agency fees, custody and accounting fees and other expenses to a peer group and median. The Trustees believed that the comparisons provided by the Outside Data Provider were useful in evaluating the reasonableness of the management fees paid by the Fund. In addition, the Trustees considered the Investment Adviser’s voluntary undertaking to limit the Fund’s total expense ratio (excluding certain expenses) to a specified level. This voluntary undertaking is in addition to the Investment Adviser’s separate contractual agreement to reimburse the Fund as necessary to limit the total annual operating expenses of the Service Shares of the Fund to a specified level until June 2007.
 
19

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND
 
Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)

     The Board of Trustees also considered the reduction in the contractual fee rate payable under the Management Agreement for the Fund that was approved by the Trustees in June 2004, and the breakpoints in the contractual fee rate under the Management Agreement for the Fund that were approved in 2005, which had been implemented at the following annual percentages of the average daily net assets of the Fund:

       0.65% on the first $1 billion, 0.59% over $1 billion up to $2 billion and 0.56% over $2 billion.

     In approving these new fee breakpoints, the Trustees had reviewed information regarding the Investment Adviser’s potential economies of scale, and whether the Fund and its shareholders were participating in the benefits of these economies. In this regard, the Trustees considered the amount of assets in the Fund; the information provided by the Investment Adviser relating to the costs of the services provided by the Investment Adviser and its affiliates and the profits realized by them; and information comparing fee rates charged by the Investment Adviser with fee rates charged by other, unaffiliated investment managers to other mutual funds. Upon reviewing these matters again at the Annual Contract Meeting in 2006, the Trustees continued to believe that the fee breakpoints were a way to ensure that benefits of scalability would be passed along to shareholders at the specified asset levels.

     The Trustees also considered the other benefits derived by the Investment Adviser and its affiliates from the Fund as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services, and the brokerage and research services received by the Investment Adviser in connection with the placement of brokerage transactions for the Fund. In this regard, the Trustees noted that the Investment Adviser had adopted a policy to cease obtaining third party non-broker research based on the Fund’s brokerage transactions. They also noted that during the past year the Fund had created a new share class, Service Shares, with a distribution and service plan under which an affiliate of the Investment Adviser would receive fees.
     In addition, the Trustees reviewed the Investment Adviser’s pre-tax revenues and pre-tax margins with respect to the Trust and the Fund. In this regard the Trustees reviewed, among other things, profitability analyses and summaries, revenue and expense schedules, and expense allocation methodologies, as well as a report of independent accountants regarding the results of certain agreed-upon procedures to verify expense allocation calculations that were designed to assist the Trustees in their evaluation of the Investment Adviser’s schedules of revenues and expenses. The Trustees considered the Investment Adviser’s revenues and margins both in absolute terms and in comparison to the information on the reported margins earned by other asset management firms.
     After deliberation and consideration of the information provided, including the factors described above, the Trustees concluded that the management fees paid by the Fund were reasonable in light of the services provided by the Investment Adviser, its costs and the Fund’s current and reasonably foreseeable asset levels, and that the Management Agreement should be approved and continued.
 
20

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED U.S. EQUITY FUND 

Fund Expenses (Unaudited) — Six Month Period Ended June 30, 2006

            As a shareholder of Institutional and Service Shares of the Fund, you incur ongoing costs, including management fees; distribution and service (12b-1) fees (with respect to Service Shares); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in Institutional Shares 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 January 1, 2006 through June 30, 2006.  
 
            Actual Expenses — The first line under each share class of 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 of 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 is not the Fund’s actual return. 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. As a shareholder of the Fund, you do not incur any transaction costs, such as sales charges (loads), redemption fees, or exchange fees, but shareholders of other funds may incur such costs. 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 whose shareholders may incur transaction costs.  

                         
Expenses Paid
for the
Beginning Ending 6 months
Account Value Account Value ended
1/1/06 6/30/06 6/30/06*
Institutional
                        
Actual
  $ 1,000     $ 1,020.60     $ 3.63  
Hypothetical 5% return
    1,000       1,021.20 +     3.63  
Service#
                        
Actual
  $ 1,000     $ 988.90     $ 3.73  
Hypothetical 5% return
    1,000       1,019.68 +     3.78  

  *   Expenses 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 June 30, 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 fiscal year. The annualized expense ratios for the period were 0.72% and 0.80% for Institutional and Service Shares, respectively.  
  #   Service Share Class commenced on January 9, 2006. The Beginning Account Value is as of January 9, 2006.  
  +  Hypothetical expenses are based on the Fund’s actual annualized expense ratios and an assumed rate of return of 5% per year before expenses.  

 
21

 

     
TRUSTEES
  OFFICERS
Ashok N. Bakhru, Chairman
   Kaysie P. Uniacke, President
John P. Coblentz, Jr.
  James A. Fitzpatrick, Vice President
Patrick T. Harker
  James A. McNamara, Vice President
Mary Patterson McPherson
  John M. Perlowski, Treasurer
Alan A. Shuch
  Peter V. Bonanno, Secretary
Wilma J. Smelcer
   
Richard P. Strubel
   
Kaysie P. Uniacke
   
 
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent 		   
 
GOLDMAN SACHS ASSET MANAGEMENT, L.P.
Investment Adviser
 
Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.
 
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 the 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 September 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 1-800-621-2550.
 
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.
 
Holdings and allocations shown 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.
 
Effective May 1, 2006, the Variable Insurance Trust (VIT) CORESM U.S. Equity Fund was renamed the Variable Insurance Trust (VIT) Structured U.S. Equity Fund.
 
CORESM is a registered service mark of Goldman, Sachs & Co.
 
    Toll Free (in U.S.): 800-292-4726
 
This report is prepared for the general information of contract owners and is not an offer of shares of the Goldman Sachs Variable Insurance Trust: Structured U.S. Equity Fund.
 
Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: August 18, 2006
 
VITSTRCUSSAR/06-1198/08-06/40.0K    

 

Goldman
Sachs Variable Insurance Trust

GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, NEW YORK, NEW YORK 10005

 
 
Structured Small Cap Equity Fund
 
 
Semiannual Report
June 30, 2006
 

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Structured Small Cap Equity Fund during the six-month reporting period that ended June 30, 2006.

Market Review

The S&P 500 Index returned 2.71% in the first half of 2006. Eight of the ten sectors in the Index posted positive results in the first half of the year, led by the Energy (+13.7%) and Telecommunication Services (+12.0%) sectors. The Energy sector also contributed the most (weight times performance) to Index gains. From an investment style perspective, the Russell 1000 Value Index (+6.56%) outperformed the Russell 1000 Growth Index (-0.93%) in the first half of the year. From a market cap perspective, small-cap stocks outperformed mid-and large-cap stocks, with the Russell 2000, Russell MidCap and Russell 1000 Indexes returning 8.21%, 4.84%, and 2.76%, respectively.

Investment Objective

The Fund seeks long-term growth of capital. The Fund seeks this objective through a broadly diversified portfolio of equity investments of U.S. issuers.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006*

             
% of
Company Net Assets Business
Veritas DGC, Inc.
    1.6 %   Energy Equipment & Services
Choice Hotels International, Inc.
    1.5     Hotels, Restaurants & Leisure
Papa John’s International, Inc.
    1.5     Hotels, Restaurants & Leisure
NewMarket Corp.
    1.4     Chemicals
EMCOR Group, Inc.
    1.4     Construction & Engineering
Applera Corp. — Applied Biosystems Group
    1.4     Healthcare Equipment & Supplies
Eagle Materials, Inc.
    1.4     Construction Materials
Ryerson Tull, Inc.
    1.4     Metals & Mining
Swift Energy Co.
    1.4     Oil & Gas
LandAmerica Financial Group, Inc.
    1.4     Insurance

* Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

 
1

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND
 
Shareholder Letter (continued)

Performance Review

Over the six-month period that ended June 30, 2006, the Fund generated a cumulative total return of 5.24%. This return compares to the 8.21% cumulative total return of the Fund’s benchmark, the Russell 2000 Index (with dividends reinvested), over the same time period.

Though returns to the investment themes were positive overall, the Fund underperformed its benchmark during the reporting period. Earnings Quality was the only Structured investment theme to detract from relative returns for the period. Meanwhile, Management Impact was the biggest positive contributor to relative returns, followed by Momentum, Profitability, Valuation, and Analyst Sentiment.

Stock selection among sectors was negative overall in the first half of the year. The Fund’s holdings in the Information Technology and Financials sectors were among the least successful selections. On the upside, stock selection in the Consumer Discretionary sector was the most successful for the reporting period.

Despite positive results overall for the themes, we believe that the shortfall for the period was primarily the result of residual factors, such as stock-specific events. For example, an overweight in Intergraph Corp. was the largest detractor from relative returns during the reporting period. Its stock fell substantially after issuing first quarter and fiscal year 2006 revenue guidance below analysts’ estimates.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Quantitative Equity Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Structured Small Cap Equity Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT Structured Small Cap Equity Fund invests in a broadly diversified portfolio of small-capitalization 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. Stocks of smaller companies are often more volatile and less liquid and present greater risks than stocks of larger companies. At times, the Fund may be unable to sell certain of its portfolio securities without a substantial drop in price, if at all.

 
2

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term Investments include repurchase agreements and securities lending collateral. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
3

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 99.8%
    Aerospace & Defense – 1.4%
      20,600     AAR Corp.*   $ 457,938  
      9,200     Cubic Corp.     180,412  
      31,900     Kaman Corp.     580,580  
      35,600     United Industrial Corp.(a)     1,610,900  
                 
 
                  2,829,830  
   
    Air Freight & Couriers – 0.2%
      7,500     EGL, Inc.*     376,500  
   
    Banks – 8.0%
      5,973     Accredited Home Lenders Holding Co.*     285,569  
      50,973     Bank of Hawaii Corp.     2,528,261  
      11,883     Cathay General Bancorp.     432,304  
      16,900     Central Pacific Financial Corp.     654,030  
      37,400     Chittenden Corp.     966,790  
      8,700     City National Corp.     566,283  
      50,600     Corus Bankshares, Inc.(a)     1,324,708  
      11,875     CVB Financial Corp.     185,963  
      349     First Bancorp     7,329  
      5,200     First Citizens BancShares, Inc.     1,042,600  
      3,333     First Financial Bankshares, Inc.     121,788  
      931     First Regional Bancorp*     81,928  
      34,800     FirstFed Financial Corp.*(a)     2,006,916  
      38,561     Hanmi Financial Corp.     749,626  
      4,275     IBERIABANK Corp.     245,983  
      34,500     PFF Bancorp, Inc.     1,144,020  
      16,000     Placer Sierra Bancshares     371,040  
      8,038     Preferred Bank     430,917  
      19,694     Provident Financial Services, Inc.     353,507  
      5,100     S&T Bancorp, Inc.     169,473  
      37,759     SVB Financial Group*     1,716,524  
      23,800     Umpqua Holdings Corp.     610,470  
      1,200     WSFS Financial Corp.     73,740  
                 
 
                  16,069,769  
   
    Beverages – 0.8%
      8,100     Hansen Natural Corp.*     1,541,997  
      1,000     National Beverage Corp.*     14,350  
                 
 
                  1,556,347  
   
    Biotechnology – 3.0%
      65,100     Albany Molecular Research, Inc.*     695,268  
      117,000     Alkermes, Inc.*     2,213,640  
      62,000     Applera Corp. – Celera Genomics Group*     802,900  
      30,600     Cephalon, Inc.*     1,839,060  
      28,999     Exelixis, Inc.*     291,440  
      7,100     Neurocrine Biosciences, Inc.*     75,260  
      12,000     PDL BioPharma, Inc.*     220,920  
                 
 
                  6,138,488  
   
    Building Products – 0.1%
      3,300     Universal Forest Products, Inc.     207,009  
   
    Chemicals – 2.1%
      23,498     CF Industries Holdings, Inc.     335,081  
      20,400     H.B. Fuller Co.     888,828  
      59,510     NewMarket Corp.     2,919,561  
                 
 
                  4,143,470  
   
    Commercial Services & Supplies – 6.0%
      58,700     Administaff, Inc.     2,102,047  
      13,600     American Ecology Corp.     360,400  
      23,340     Arbitron, Inc.     894,622  
      14,500     Consolidated Graphics, Inc.*     754,870  
      30,700     CSG Systems International, Inc.*     759,518  
      51,600     Global Payments, Inc.     2,505,180  
      68,800     Labor Ready, Inc.*     1,558,320  
      3,100     Manpower, Inc.     200,260  
      24,015     Pre-Paid Legal Services, Inc.(a)     828,518  
      11,500     SOURCECORP, Inc.*     285,085  
      94,910     Spherion Corp.*     865,579  
      52,700     TeleTech Holdings, Inc.*     667,182  
      5,300     United Stationers, Inc.*     261,396  
                 
 
                  12,042,977  
   
    Communications Equipment – 1.7%
      5,709     Anaren, Inc.*     116,977  
      36,500     DSP Group, Inc.*     907,025  
      45,000     Optical Communication Products, Inc.*     90,450  
      52,000     Polycom, Inc.*     1,139,840  
      84,500     Tellabs, Inc.*     1,124,695  
                 
 
                  3,378,987  
   
    Computers & Peripherals – 1.8%
      73,300     Intergraph Corp.*     2,308,217  
      26,976     Komag, Inc.*     1,245,752  
                 
 
                  3,553,969  
   
    Construction & Engineering – 1.4%
      59,300     EMCOR Group, Inc.*     2,886,131  
   
    Construction Materials – 1.4%
      59,700     Eagle Materials, Inc.     2,835,750  
   
    Distributors – 1.0%
      67,840     Brightpoint, Inc.*     917,875  
      35,030     Handleman Co.(a)     285,495  
      10,200     WESCO International, Inc.*     703,800  
                 
 
                  1,907,170  
   
    Diversified Financials – 2.8%
      9,300     AmeriCredit Corp.*     259,656  
      64,100     CBIZ, Inc.*     474,981  
      61,268     CompuCredit Corp.*     2,355,142  
      4,200     Investment Technology Group, Inc.*     213,612  
      6,900     optionsXpress Holdings, Inc.     160,839  
      9,000     Piper Jaffray Cos., Inc.*     550,890  
      46,646     World Acceptance Corp.*     1,656,866  
                 
 
                  5,671,986  
   
 
The accompanying notes are an integral part of these financial statements.

4

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Diversified Telecommunication Service – 0.1%
      12,536     CT Communications, Inc.   $ 286,698  
   
    Electric Utilities – 1.1%
      477     Central Vermont Public Service Corp.     8,815  
      44,800     NorthWestern Corp.     1,538,880  
      9,800     Pepco Holdings, Inc.     231,084  
      31,500     Sierra Pacific Resources*     441,000  
                 
 
                  2,219,779  
   
    Electrical Equipment – 2.6%
      55,600     A.O. Smith Corp.     2,577,616  
      16,900     Acuity Brands, Inc.     657,579  
      8,000     Encore Wire Corp.*     287,520  
      12,700     General Cable Corp.*     444,500  
      9,400     The Genlyte Group, Inc.*     680,842  
      19,200     Woodward Governor Co.     585,792  
                 
 
                  5,233,849  
   
    Electronic Equipment & Instruments – 3.4%
      27,900     Coherent, Inc.*     941,067  
      29,400     Exar Corp.*     390,138  
      60,100     Greatbatch, Inc.*     1,418,360  
      14,838     KEMET Corp.*     136,806  
      43,100     MTS Systems Corp.     1,702,881  
      19,500     Plexus Corp.*     667,095  
      13,400     Tech Data Corp.*     513,354  
      9,100     Technitrol, Inc.     210,665  
      32,300     Tektronix, Inc.     950,266  
                 
 
                  6,930,632  
   
    Energy Equipment & Services – 2.2%
      17,200     Helmerich & Payne, Inc.     1,036,472  
      7,800     Hornbeck Offshore Services, Inc.*     277,056  
      61,900     Veritas DGC, Inc.*     3,192,802  
                 
 
                  4,506,330  
   
    Food & Drug Retailing – 2.8%
      19,900     Flowers Foods, Inc.     569,936  
      50,832     Longs Drug Stores Corp.     2,318,956  
      183,083     Terra Industries, Inc.*(a)     1,166,238  
      42,700     The Great Atlantic & Pacific Tea Co., Inc.*(a)     970,144  
      34,200     Wild Oats Markets, Inc.*(a)     670,320  
                 
 
                  5,695,594  
   
    Food Products – 0.9%
      10,500     J & J Snack Foods Corp.     347,235  
      438     Seaboard Corp.     560,640  
      23,300     USANA Health Sciences, Inc.*(a)     883,070  
                 
 
                  1,790,945  
   
    Healthcare Equipment & Supplies – 4.2%
      88,500     Applera Corp. – Applied Biosystems Group     2,862,975  
      3,200     Bio-Rad Laboratories, Inc.*     207,808  
      10,600     Computer Programs and Systems, Inc.     423,576  
      6,132     Hologic, Inc.*     302,675  
      22,800     Illumina, Inc.*     676,248  
      83,700     Immucor, Inc.*     1,609,551  
      16,964     Mentor Corp.     737,934  
      9,400     STERIS Corp.     214,884  
      17,300     SurModics, Inc.*(a)     624,703  
      59,800     Thoratec Corp.*     829,426  
      1,839     Zoll Medical Corp.*     60,246  
                 
 
                  8,550,026  
   
    Healthcare Providers & Services – 1.3%
      38,900     Genesis HealthCare Corp.*     1,842,693  
      25,500     Sunrise Senior Living, Inc.*     705,075  
                 
 
                  2,547,768  
   
    Hotels, Restaurants & Leisure – 3.7%
      50,500     Choice Hotels International, Inc.     3,060,300  
      11,100     Domino’s Pizza, Inc.     274,614  
      33,300     Landry’s Restaurants, Inc.     1,080,585  
      89,300     Papa John’s International, Inc.*     2,964,760  
      22,800     Six Flags, Inc.*(a)     128,136  
                 
 
                  7,508,395  
   
    Household Durables – 1.2%
      89,200     American Greetings Corp.     1,874,092  
      23,800     Kimball International, Inc. Class B     469,098  
                 
 
                  2,343,190  
   
    Insurance – 4.3%
      10,500     American Physicians Capital, Inc.*     552,195  
      9,600     EMC Insurance Group, Inc.     276,096  
      6,300     FBL Financial Group, Inc.     204,120  
      102,800     Fremont General Corp.     1,907,968  
      42,500     LandAmerica Financial Group, Inc.(a)     2,745,500  
      1,300     National Western Life Insurance Co.     311,545  
      4,600     Safety Insurance Group, Inc.     218,730  
      24,900     SeaBright Insurance Holdings*     401,139  
      59,400     Stewart Information Services Corp.     2,156,814  
                 
 
                  8,774,107  
   
    Internet Software & Services – 2.7%
      17,900     Digital Insight Corp.*     613,791  
      54,800     EarthLink, Inc.*     474,568  
      52,300     InfoSpace, Inc.*     1,185,641  
      143,511     RealNetworks, Inc.*     1,535,568  
      52,700     Trizetto Group, Inc.*     779,433  
      18,200     United Online, Inc.     218,400  
      35,000     Websense, Inc.*     718,900  
                 
 
                  5,526,301  
   
    IT Consulting & Services – 0.6%
      69,313     Agilysys, Inc.     1,247,634  
   
 
The accompanying notes are an integral part of these financial statements.

5

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – (continued)
    Machinery – 3.0%
      9,500     AGCO Corp.*   $ 250,040  
      1,700     Ampco-Pittsburgh Corp.     48,705  
      89,700     Applied Industrial Technologies, Inc.     2,180,607  
      12,100     EnPro Industries, Inc.*     406,560  
      45,100     JLG Industries, Inc.     1,014,750  
      15,700     NACCO Industries, Inc.     2,157,337  
                 
 
                  6,057,999  
   
    Media – 1.1%
      7,600     Catalina Marketing Corp.     216,296  
      75,800     Netflix, Inc.*(a)     2,062,518  
                 
 
                  2,278,814  
   
    Metals & Mining – 2.4%
      102,600     Ryerson Tull, Inc.(a)     2,770,200  
      28,700     Steel Dynamics, Inc.     1,886,738  
      17,800     USEC, Inc.     210,930  
                 
 
                  4,867,868  
   
    Multiline Retail – 0.6%
      11,800     Big Lots, Inc.*     201,544  
      17,100     Dillard’s, Inc.     544,635  
      22,400     Retail Ventures, Inc.*(a)     399,168  
      5,653     The Bon-Ton Stores, Inc.     123,688  
                 
 
                  1,269,035  
   
    Office Electronics – 0.5%
      81,860     IKON Office Solutions, Inc.     1,031,436  
   
    Oil & Gas – 3.1%
      33,000     Berry Petroleum Co.     1,093,950  
      11,635     Harvest Natural Resources, Inc.*     157,538  
      26,400     KCS Energy, Inc.*     784,080  
      7,700     Petroleum Development Corp.*     290,290  
      64,400     Swift Energy Co.*     2,764,692  
      31,400     W&T Offshore, Inc.(a)     1,221,146  
                 
 
                  6,311,696  
   
    Paper & Forest Products – 0.4%
      36,400     Louisiana-Pacific Corp.     797,160  
   
    Personal Products – 0.1%
      20,500     Mannatech, Inc.(a)     258,505  
   
    Pharmaceuticals – 1.9%
      91,700     Alpharma, Inc.     2,204,468  
      31,600     Endo Pharmaceuticals Holdings, Inc.*     1,042,168  
      17,439     New River Pharmaceuticals, Inc.*(a)     497,011  
                 
 
                  3,743,647  
   
    Real Estate – 7.1%
      47,292     American Home Mortgage Investment Corp. (REIT)     1,743,183  
      50,800     Anthracite Capital, Inc. (REIT)     617,728  
      26,900     BioMed Realty Trust, Inc. (REIT)     805,386  
      121,600     Commercial Net Lease Realty(a)     2,425,920  
      30,100     Digital Realty Trust, Inc. (REIT)     743,169  
      3,715     Entertainment Properties Trust (REIT)     159,931  
      29,900     FelCor Lodging Trust, Inc. (REIT)     650,026  
      12,159     Gramercy Capital Corp. (REIT)     314,918  
      6,500     Jones Lang LaSalle, Inc.     569,075  
      16,965     National Health Investors, Inc. (REIT)     456,189  
      46,000     New Century Financial Corp. (REIT)(a)     2,104,500  
      14,100     RAIT Investment Trust (REIT)     411,720  
      116,300     Senior Housing Properties Trust (REIT)     2,082,933  
      83,700     Spirit Finance Corp. (REIT)     942,462  
      10,400     Trammell Crow Co.*     365,768  
                 
 
                  14,392,908  
   
    Road & Rail – 1.6%
      13,600     Covenant Transport, Inc.*     206,992  
      48,000     Dollar Thrifty Automotive Group, Inc.*     2,163,360  
      10,600     SCS Transportation, Inc.*     291,818  
      24,300     U. S. Xpress Enterprises, Inc.*     656,586  
                 
 
                  3,318,756  
   
    Semiconductor Equipment & Products – 3.0%
      334,600     Applied Micro Circuits Corp.*     913,458  
      270,640     Atmel Corp.*     1,502,052  
      91,975     Cirrus Logic, Inc.*     748,677  
      26,000     LSI Logic Corp.*     232,700  
      61,600     MPS Group, Inc.*     927,696  
      29,546     Netlogic Microsystems, Inc.*(a)     952,858  
      6,768     Trident Microsystems, Inc.*     128,457  
      136,135     TriQuint Semiconductor, Inc.*     607,162  
                 
 
                  6,013,060  
   
    Software – 3.8%
      14,900     Ansoft Corp.*     305,152  
      18,400     ANSYS, Inc.*     879,888  
      11,100     Internet Security Systems, Inc.*     209,235  
      35,000     JDA Software Group, Inc.*     491,050  
      48,600     Lawson Software, Inc.*     325,620  
      22,800     Merge Technologies, Inc.*(a)     280,668  
      19,300     MicroStrategy, Inc.*     1,882,136  
      42,300     Red Hat, Inc.*     989,820  
      20,100     SPSS, Inc.*     646,014  
      20,300     Synopsys, Inc.*     381,031  
      33,200     TradeStation Group, Inc.*     420,644  
      30,100     VeriFone Holdings, Inc.*     917,448  
                 
 
                  7,728,706  
   
    Specialty Retail – 6.1%
      10,000     Christopher & Banks Corp.     290,000  
      72,341     Circuit City Stores, Inc.     1,969,122  
      13,100     Conn’s, Inc.*     347,805  
                     
   
 
The accompanying notes are an integral part of these financial statements.

6

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Specialty Retail – (continued)
      11,000     Dress Barn, Inc.*   $ 278,850  
      41,080     Group 1 Automotive, Inc.     2,314,447  
      25,400     Lithia Motors, Inc.     770,128  
      92,625     Payless ShoeSource, Inc.*     2,516,621  
      39,000     Sonic Automotive, Inc.     865,020  
      23,150     Stage Stores, Inc.     763,950  
      17,200     United Auto Group, Inc.     367,220  
      55,200     United Rentals, Inc.*     1,765,296  
                 
 
                  12,248,459  
   
    Textiles & Apparel – 2.1%
      52,300     Brown Shoe Co.     1,782,384  
      56,300     Kellwood Co.     1,647,901  
      30,600     Skechers U.S.A., Inc.*     737,766  
                 
 
                  4,168,051  
   
    Trading Companies & Distributors – 0.1%
      4,100     MSC Industrial Direct Co., Inc.     195,037  
   
    Wireless Telecommunication Services – 0.1%
      19,700     Syniverse Holdings, Inc.*     289,590  
   
    TOTAL COMMON STOCKS
    (Cost $176,138,354)   $ 201,730,358  
   
    TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
    (Cost $176,138,354)   $ 201,730,358  
   
   
Securities Lending Collateral – 9.9%
      19,977,125     Boston Global Investment Trust – Enhanced Portfolio     19,977,125  
    (Cost $19,977,125)        
   
    TOTAL INVESTMENTS – 109.7%
    (Cost $196,115,479)   $ 221,707,483  
   
    LIABILITIES IN EXCESS OF OTHER ASSETS – (9.7)%     (19,521,231 )
   
    NET ASSETS – 100.0%   $ 202,186,252  
   

  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) All or portion of security is on loan.
             
   
    Investment Abbreviation:
    REIT   —   Real Estate Investment Trust
   

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At June 30, 2006, the following futures contracts were open as follows:

                             
Number of Settlement Unrealized
Type Contracts Long Month Market Value Gain
Russell 2000 Index
    2     September 2006   $ 146,300     $ 9,136  
 
The accompanying notes are an integral part of these financial statements.

7

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)
               
    Assets:
   
Investment in securities, at value (identified cost $176,138,354) — including $19,492,684 of securities on loan
  $ 201,730,358  
   
Securities lending collateral, at value (cost $19,977,125)
    19,977,125  
   
Cash(a)
    350,000  
   
Receivables:
       
     
Fund shares sold
    316,139  
     
Dividends and interest
    229,043  
     
Securities lending income
    15,203  
     
Reimbursement from adviser
    6,539  
     
Variation margin
    2,020  
   
Other assets
    2,353  
   
   
Total assets
     222,628,780  
   
    Liabilities:
   
Due to custodian
    129,313  
   
Payables:
       
     
Payable upon return of securities loaned
    19,977,125  
     
Fund shares repurchased
    126,148  
     
Amounts owed to affiliates
    125,033  
   
Accrued expenses
    84,909  
   
   
Total liabilities
     20,442,528  
   
    Net Assets:
   
Paid-in capital
    166,561,974  
   
Accumulated undistributed net investment income
    715,948  
   
Accumulated net realized gain on investment and futures transactions
    9,307,190  
   
Net unrealized gain on investments and futures transactions
    25,601,140  
   
   
NET ASSETS
   $ 202,186,252  
   
   
Total shares of beneficial interest outstanding, par value $0.001 (unlimited shares authorized)
    13,792,410  
   
Net asset value, offering and redemption price per share
  $ 14.66  
   

(a)  Includes restricted cash of $350,000 relating to initial margin requirements on futures transactions.

 
The accompanying notes are an integral part of these financial statements.

8

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 

Statement of Operations

For the Six Months Ended June 30, 2006 (Unaudited)
               
    Investment income:
   
Dividends
  $ 1,247,399  
   
Interest (including securities lending income of $98,047)
    126,556  
   
   
Total income
     1,373,955  
   
    Expenses:
   
Management fees
    775,029  
   
Transfer agent fees
    41,317  
   
Custody and accounting fees
    53,545  
   
Printing fees
    33,346  
   
Professional fees
    26,719  
   
Trustee fees
    6,803  
   
Registration fees
    629  
   
Other
    5,286  
   
   
Total expenses
     942,674  
   
   
Less — expense reductions
    (35,091 )
   
   
Net expenses
     907,583  
   
   
NET INVESTMENT INCOME
     466,372  
   
    Realized and unrealized gain on investment and futures transactions:
   
Net realized gain from:
       
     
Investment transactions
    8,117,867  
     
Futures transactions
    84,878  
   
Net change in unrealized gain on:
       
     
Investments
    1,347,093  
     
Futures
    36,614  
   
   
Net realized and unrealized gain on investment and futures transactions
     9,586,452  
   
   
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 10,052,824  
   
 
The accompanying notes are an integral part of these financial statements.

9

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND

Statements of Changes in Net Assets

                     
For the
Six Months Ended For the
June 30, 2006 Year Ended
(Unaudited) December 31, 2005
    From operations:
   
Net investment income
  $ 466,372     $ 691,364  
   
Net realized gain on investment and futures transactions
    8,202,745       10,904,616  
   
Payment by affiliates to reimburse certain security claims
    —       16,973  
   
Net change in unrealized gain (loss) on investments and futures transactions
    1,383,707       (1,038,569 )
   
   
Net increase in net assets resulting from operations
     10,052,824       10,574,384  
   
    Distributions to shareholders:
   
From net investment income
    —       (459,667 )
   
From net realized gain on investment, futures and foreign currency related transactions
    —       (17,009,088 )
   
   
Total distributions to shareholders
     —       (17,468,755 )
   
    From share transactions:
   
Proceeds from sales of shares
    14,147,281       22,353,469  
   
Reinvestment of dividends and distributions
    —       17,468,455  
   
Cost of shares repurchased
    (17,055,902 )     (29,706,807 )
   
   
Net increase (decrease) in net assets resulting from share transactions
     (2,908,621 )     10,115,117  
   
   
TOTAL INCREASE
     7,144,203       3,220,746  
   
    Net assets:
   
Beginning of period
    195,042,049       191,821,303  
   
   
End of period
  $ 202,186,252     $ 195,042,049  
   
   
Accumulated undistributed net investment income
   $ 715,948     $ 249,576  
   
    Summary of share transactions:
   
Shares sold
    945,363       1,522,405  
   
Shares issued on reinvestment of dividends and distributions
    —       1,224,164  
   
Shares repurchased
    (1,151,652 )     (2,065,937 )
   
   
NET INCREASE (DECREASE)
     (206,289 )     680,632  
   
 
The accompanying notes are an integral part of these financial statements.

10

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                                         
Income (loss) from Ratios assuming no
investment operations Distributions to shareholders expense reductions
Net From Ratio of Ratio of Ratio of
Net asset realized tax From Net asset Net assets, Ratio of net investment total net investment
value, Net and Total from From net return net value, end of net expenses income expenses income Portfolio
beginning investment unrealized investment investment of realized Total end of Total period to average to average to average to average turnover
of period income(a) gain (loss) operations income capital gain distributions period return(b) (in 000s) net assets net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)
    2006   $ 13.93     $ 0.03     $ 0.70     $ 0.73     $ —     $ —     $ —     $ —     $ 14.66       5.24 %   $ 202,186       0.88 %(c)     0.45 %(c)     0.91 %(c)     0.42 %(c)     53 %    
 
    For the Years ended December 31,
    2005     14.40       0.05       0.86       0.91       (0.04 )     —       (1.34 )     (1.38 )     13.93       6.07       195,042       0.89       0.37       0.93       0.33       119      
    2004     12.99       0.02       2.10       2.12       (0.03 )     —       (0.68 )     (0.71 )     14.40       16.33       191,821       0.90       0.14       0.97       0.07       146      
    2003     9.19       0.04       4.18       4.22       (0.03 )     —       (0.39 )     (0.42 )     12.99       46.00       181,765       1.03       0.40       1.25       0.18       141      
    2002     10.84       0.03       (1.65 )     (1.62 )     (0.03 )     —       —       (0.03 )     9.19       (14.97)       47,005       1.04       0.25       1.29       0.00       128      
    2001     10.40       0.03       0.44       0.47       (0.02 )     (0.01 )     —       (0.03 )     10.84       4.53       54,365       1.00       0.32       1.22       0.10       105      
   

(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 distributions and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than one year are not annualized.
(c)  Annualized.

The accompanying notes are an integral part of these financial statements.

 
11

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND

Notes to Financial Statements

June 30, 2006 (Unaudited)

1. ORGANIZATION

Goldman Sachs Variable Insurance 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 Structured Small Cap Equity Fund (the “Fund”) (formerly Goldman Sachs CORE Small Cap Equity). The Fund is a diversified portfolio under the Act.
     Shares of the Trust may be purchased and held by separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Trust are not offered directly to the general public.

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 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 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.

D. Federal Taxes and Distributions to Shareholders — 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 provisions are required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gains distributions, if any, are declared and paid annually.

     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules which may differ from generally accepted accounting principles. Therefore, the source of the Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain, or from tax return of capital.
     In addition, distributions paid by the Fund’s investments in real estate investment trusts (“REITs”) often include a “return of capital” which is recorded by the Fund as a reduction of the cost basis of the securities held. The Code requires a REIT to distribute at least 95% of its taxable income to investors. In many cases, however, because of “non-cash” expenses such as property depreciation, a REIT’s cash flow will exceed its taxable income. The REIT may distribute this excess cash to offer a more competitive yield. This portion of the distribution is deemed a return of capital and is generally not taxable to shareholders.
 
12

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 
 
2. SIGNIFICANT ACCOUNTING POLICIES (continued)

E. 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 counterparties, with a current value equal to or greater than the market value of the corresponding transactions.

F. 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.

     Pursuant to exemptive relief granted by the Securities and Exchange Commission (“SEC”) and terms and conditions contained therein, the Fund, together with other registered investment companies having management or investment advisory agreements with Goldman Sachs Asset Management, L.P. (“GSAM”), or its affiliates may transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

G. Futures Contracts — The Fund may enter into futures transactions to hedge against changes in interest rates, securities prices, currency exchange rates or to seek to increase total return. Futures contracts are valued at the last settlement price at the end of each day on the board of trade or exchange upon which they are traded. Upon entering into a futures contract, the Fund is required to deposit with a broker, or the Fund’s custodian bank on behalf of the broker an amount of cash or securities equal to the minimum “initial margin” requirement of the associated futures exchange. Subsequent payments for futures contracts (“variation margin”) are paid or received by the Fund daily, dependent on the daily fluctuations in the value of the contracts, and are recorded for financial reporting purposes as unrealized gains or losses. When contracts are closed, the Fund realizes a gain or loss which is reported in the Statement of Operations.

     The use of futures contracts involve, to varying degrees, elements of market and counterparty risk which may exceed the amounts recognized in the Statement of Assets and Liabilities. Changes in the value of the futures contract may not directly correlate with changes in the value of the underlying securities. This risk may decrease the effectiveness of the Fund’s strategies and potentially result in a loss.

3. AGREEMENTS

GSAM, an affiliate of Goldman, Sachs & Co. (“Goldman Sachs”), serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Fund. Under this Agreement, GSAM manages the Fund, subject to the general supervision of the Trust’s Board of Trustees.
     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAM is entitled to a fee (“Management fee”) computed daily and payable monthly, equal to an annual percentage rate of the Fund’s average daily net assets.
     The Investment Adviser has entered into a fee reduction commitment for the Fund which was implemented on a voluntary basis beginning on July 1, 2005 and on a contractual basis as of April 28, 2006 to achieve the rates listed below:
         
Average Daily Net Assets Annual Rate
First $2 Billion
    0.75 %
Over $2 Billion
    0.68 %
 
13

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND
 
3. AGREEMENTS (continued)

     Additionally, effective July 1, 2005, GSAM has voluntarily agreed to waive a portion of its Management Fee equal to 0.02% of the Fund’s average daily net assets. For the six months ended June 30, 2006, GSAM waived approximately $21,000 of the Fund’s Management Fee.

     GSAM has voluntarily agreed to limit certain “Other Expenses” of the Fund (excluding Management fees, Transfer Agency fees and expenses, taxes, interest, brokerage fees and litigation, indemnification costs, shareholder meeting and other extraordinary expenses exclusive of any expense offset arrangements) to the extent that such expenses exceed, on an annual basis, 0.114% of the average daily net assets of the Fund. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Fund is not obligated to reimburse GSAM for prior fiscal year expense reimbursements, if any. For the six months ended June 30, 2006, GSAM reimbursed approximately $13,000 to the Fund.
     In addition, the Fund has entered into certain offset arrangements with the custodian resulting in a reduction in the Fund’s expenses. For the six months ended June 30, 2006, custody fees were reduced by approximately $1,300.
     Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly equal to an annual rate of 0.04% of the average daily net assets of the Fund. Goldman Sachs serves as the distributor of the Fund’s shares at no cost to the Fund.
     At June 30, 2006, the amounts owed to affiliates were approximately $119,000 and $6,000 for Management and Transfer Agent fees, respectively.

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long term securities for the six months ended June 30, 2006, were $109,139,810 and $109,899,401, respectively. For the six months ended June 30, 2006, Goldman Sachs earned approximately $1,000 of brokerage commissions from portfolio transactions, including futures transactions, executed on behalf of the Fund.

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 Fund 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.
     Both the Fund and BGA receive compensation relating to the lending of the Fund’s securities. The amount earned by the Fund for the six months ended June 30, 2006, is reported parenthetically on the Statement of Operations. A portion of this amount, $13,311, represents compensation earned by the Fund from lending its securities to Goldman Sachs. For the six months ended June 30, 2006, BGA earned approximately $17,000 in fees as securities lending agent. At June 30, 2006, the Fund loaned securities having a market value of $19,492,684 collateralized by cash in the amount of $19,977,125. The Fund invests the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by GSAM, for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Fund bears the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.
 
14

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 

6. LINE OF CREDIT FACILITY

The Fund participates in a $400,000,000 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 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. This 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 June 30, 2006, the Fund did not have any borrowings under this facility.

7. TAX INFORMATION

As of the Fund’s most recent fiscal year end, December 31, 2005, the Fund had certain timing differences on a tax basis of $18,500 related to the recognition of certain REIT dividends for tax purposes.
     At June 30, 2006, the Fund’s aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes were as follows:
         
Tax cost
  $ 196,352,805  
Gross unrealized gain
    31,370,091  
Gross unrealized loss
    (6,015,413 )
Net unrealized security gain
  $ 25,354,678  

     The difference between book-basis and tax basis unrealized gains (losses) is attributable primarily to wash sales, futures contracts and return-of-capital distributions from underlying fund investments.

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 the Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds and the Trustees and Officers of the Goldman Sachs 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 and the Trustees and Officers of the Trust. The Fund, along with 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 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.
     Based on currently available information, GSAM and GSAMI believe that the likelihood that the pending purported class action and derivative action lawsuit will have a material adverse financial impact on the Fund is remote, and the pending action is not likely to materially affect its ability to provide investment management services to its clients, including the Goldman Sachs Funds.
 
15

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND
 
8. OTHER MATTERS (continued)

New Accounting Pronouncement — On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

 
16

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 

Statement Regarding Basis for Approval of Management Agreement (Unaudited)

The Trustees oversee the management of Goldman Sachs Variable Insurance Trust (the “Trust”), and review the investment performance and expenses of the investment fund covered by this Report (the “Fund”) at regularly scheduled meetings held during the Fund’s fiscal year. In addition, the Trustees determine annually whether to approve and continue the Trust’s investment management agreement (the “Management Agreement”) with Goldman Sachs Asset Management, L.P. (the “Investment Adviser”) for the Fund.

The Management Agreement was most recently approved by the Trustees, including all of the Trustees who are not parties to the Management Agreement or “interested persons” (as defined in the Investment Company Act of 1940, as amended) of any party thereto (the “Independent Trustees”), on June 15, 2006 (the “Annual Contract Meeting”).

To assist the Trustees in their deliberations at the Annual Contract Meeting, and in addition to the reviews of the Fund’s investment performance, expenses and other matters at regularly scheduled Board meetings, the Trustees have a Contract Review Committee (the “Committee”) whose members include all of the Independent Trustees. The Committee held meetings on December 15, 2005, February 8, 2006 and May 10, 2006. At these Committee meetings, the Independent Trustees considered matters relating to the Management Agreement including: (a) the Fund’s investment performance; (b) the Fund’s management fee arrangements; (c) the Investment Adviser’s undertaking to reimburse certain expenses of the Fund that exceed a specified level; (d) the Investment Adviser’s potential economies of scale and the breakpoint for the fees payable by the Fund under the Management Agreement; (e) the relative expense level of the Fund; (f) the Investment Adviser’s profitability with respect to the Trust and the Fund; (g) information on the advisory fees charged by the Investment Adviser to institutional accounts; (h) the quality of the non-advisory services provided to the Fund; (i) the statutory and regulatory requirements applicable to the approval and continuation of mutual fund investment management agreements; (j) an evaluation of Trustees’ the contract review process provided by an outside third party; and (k) information on the processes followed by the third party mutual fund data provider engaged as part of the Trustees’ contract review (the “Outside Data Provider”) in producing investment performance and expense comparisons for the Fund.

At the Annual Contract Meeting, the Trustees reviewed the matters that were considered at the Committee meetings and also considered additional matters including: (a) a summary of fee concessions by the Investment Adviser and its affiliates with respect to the Goldman Sachs mutual funds since 2003; (b) the quality of the Investment Adviser’s services; (c) the structure, staff and capabilities of the Investment Adviser and its portfolio management team; (d) the groups within the Investment Adviser that support the portfolio management team, including the legal and compliance departments, the valuation oversight group, the risk and performance analytics group, the business planning team and the technology group; (e) the Investment Adviser’s business continuity and disaster recovery planning; (f) the Investment Adviser’s financial resources and its ability to hire and retain talented personnel; (g) the fees received by the Investment Adviser’s affiliates from the Fund for transfer agency, securities lending, distribution, portfolio brokerage and other services; (h) the terms of the Management Agreement; (i) the administrative services provided under the Management Agreement, including the nature and extent of the Investment Adviser’s oversight of the Fund’s other service providers, including the custodian and fund accounting agent; and (j) the Investment Adviser’s policies addressing various potential conflicts of interest. At the Annual Contract Meeting, the Trustees also considered at further length the Fund’s investment performance, fees and expenses, including the Fund’s expense trends over time and the breakpoint in the contractual fee rate under the Management Agreement approved in 2005.

In connection with the Committee meetings and the Annual Contract Meeting, the Trustees received written materials and oral presentations on the topics covered, and were advised by their independent legal counsel regarding their responsibilities under applicable law. Also, in conjunction with these meetings, the Trustees attended other sessions at which the Trustees reviewed the commission rates paid by the Fund on brokerage transactions, the Investment Adviser’s receipt of research services in connection with those transactions, and the payment of Rule 12b-1 distribution and service fees that are payable by the Fund on its Service Share Class. Information was also provided to the Trustees relating to the Fund’s portfolio turnover, revenue sharing by the Investment Adviser, portfolio manager compensation, the alignment of the interests of the Fund and the portfolio managers, the number and types of accounts managed by the portfolio managers, and other matters. During the course of their deliberations, the Independent Trustees met in executive sessions without employees of the Investment Adviser present.

 
17

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND

The presentations made at the Contract Review Committee meetings and the Annual Contract Meeting encompassed the Fund and other mutual fund portfolios for which the Board of Trustees has responsibility. While the management agreements for the Fund and these other mutual fund portfolios were approved at the same Annual Contract Meeting, the Trustees considered the Management Agreement as it applied to the Fund separately.

In evaluating the Management Agreement at the Annual Contract Meeting, the Trustees relied upon their knowledge, resulting from their meetings and other interactions throughout the year, of the Investment Adviser, its services and the Fund. At those meetings the Trustees received materials relating to the Investment Adviser’s investment management and other services under the Management Agreement, including: (a) information on the investment performance of the Fund in comparison to other mutual funds and benchmark performance indices; (b) general investment outlooks in the markets in which the Fund invests; (c) compliance reports; and (d) expenses borne by the Fund. In addition, the Trustees were provided with disclosure materials regarding the Goldman Sachs mutual funds and their expenses that are provided to investors who invest in the funds, as well as information on the Goldman Sachs mutual funds’ competitive universe and discussed the broad range of other investment choices that are available to those investors.

In connection with their approval of the Management Agreement, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. As part of their review, the Trustees considered the nature, extent and quality of the services provided by the Investment Adviser. In this regard, the Trustees considered both the investment advisory services, and the other, non-advisory services, that are provided to the Fund by the Investment Adviser and its affiliates. These services include services as the Fund’s transfer agent, securities lending agent and distributor. In addition, affiliates of the Investment Adviser receive compensation in connection with the execution of the Fund’s portfolio securities transactions. The Trustees concluded that the Investment Adviser was both able to commit substantial financial and other resources to the operations of the Fund and had, in fact, continued to commit those resources in multiple areas including portfolio management, trading, technology, human resources, tax, treasury, legal, compliance, vendor oversight and risk management. The Trustees also believed that the Investment Adviser had made significant commitments to address regulatory compliance requirements applicable to the Fund and the Investment Adviser, including education and training initiatives.

The Trustees also considered the investment performance of the Fund and the Investment Adviser. In this regard, the Trustees compared the investment performance of the Fund to the performance of other SEC-registered funds and to rankings and ratings issued by the Outside Data Provider. The Trustees also reviewed the Fund’s investment performance relative to its performance benchmark. This information on the Fund’s investment performance was provided for one, three and five year periods. In addition, the Trustees considered the investment performance trends of the Fund over time, and reviewed the investment performance of the Fund in light of its investment objective and policies, as well as in light of periodic analyses of its quality and risk profile. In addition, the Trustees considered whether the Fund had operated within its investment policies, and its record of compliance with its investment limitations. The Trustees believed that the Fund was providing investment performance within a competitive range for long-term investors.

The Board of Trustees also considered the contractual fee rate payable by the Fund under the Management Agreement. In this regard, the Trustees considered information on the services rendered by the Investment Adviser to the Fund, which included both advisory and administrative services that were directed to the needs and operations of the Fund as a registered mutual fund. They also considered information that indicated that these mutual fund services differed in various significant respects from the services provided to the Investment Adviser’s institutional accounts, which generally paid lower fees. In addition, the fees paid by the Fund and the Fund’s total operating expense ratios (before and after expense reimbursements) were compared to similar information for mutual funds advised by other, unaffiliated investment management firms. Most of the comparisons of the Fund’s fee rates and total operating expense ratios were prepared by the Outside Data Provider.

More particularly, the Trustees reviewed analyses prepared by the Outside Data Provider of the expense rankings of the Fund. The analyses provided a comparison of the Fund’s management fee rates to a relevant peer group and a category universe; an expense analysis which compared the Fund’s expenses to a peer group and a category universe; and a five-year history comparing the Fund’s expenses to the category average. The analyses also compared the Fund’s transfer agency fees, custody and accounting fees and other expenses to a peer group and median. The Trustees believed that the comparisons provided by the Outside Data Provider were useful in evaluating the reasonableness of the management fees paid by the Fund. In addition,

 
18

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND 

the Trustees considered the Investment Adviser’s voluntary undertaking to waive a portion of its management fees with respect to the Fund and to limit the Fund’s total expense ratio (excluding certain expenses) to a specified level.

The Board of Trustees also considered the breakpoint in the contractual fee rate under the Management Agreement for the Fund that was approved in 2005, which had been implemented at the following annual percentage of the average daily net assets of the Fund:

0.75% on the first $2 billion and 0.68% over $2 billion.

In approving this new fee breakpoint, the Trustees had reviewed information regarding the Investment Adviser’s potential economies of scale, and whether the Fund and its shareholders were participating in the benefits of these economies. In this regard, the Trustees considered the amount of assets in the Fund; the information provided by the Investment Adviser relating to the costs of the services provided by the Investment Adviser and its affiliates and the profits realized by them; and information comparing fee rates charged by the Investment Adviser with fee rates charged by other, unaffiliated investment managers to other mutual funds. Upon reviewing these matters again at the Annual Contract Meeting in 2006, the Trustees continued to believe that the fee breakpoint was a way to ensure that benefits of scalability would be passed along to shareholders at the specified asset level.

The Trustees also considered the other benefits derived by the Investment Adviser and its affiliates from the Fund as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services, and the brokerage and research services received by the Investment Adviser in connection with the placement of brokerage transactions for the Fund. In this regard, the Trustees noted that the Investment Adviser had adopted a policy to cease obtaining third party non-broker research based on the Fund’s brokerage transactions. They also noted that during the past year the Fund had created a new share class, Service Shares, with a distribution and service plan under which an affiliate of the Investment Adviser would receive fees.

In addition, the Trustees reviewed the Investment Adviser’s pre-tax revenues and pre-tax margins with respect to the Trust and the Fund. In this regard the Trustees reviewed, among other things, profitability analyses and summaries, revenue and expense schedules, and expense allocation methodologies, as well as a report of independent accountants regarding the results of certain agreed-upon procedures to verify expense allocation calculations that were designed to assist the Trustees in their evaluation of the Investment Adviser’s schedules of revenues and expenses. The Trustees considered the Investment Adviser’s revenues and margins both in absolute terms and in comparison to the information on the reported margins earned by other asset management firms.

After deliberation and consideration of the information provided, including the factors described above, the Trustees concluded that the management fees paid by the Fund were reasonable in light of the services provided by the Investment Adviser, its costs and the Fund’s current and reasonably foreseeable asset levels, and that the Management Agreement should be approved and continued.

 
19

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST STRUCTURED SMALL CAP EQUITY FUND

Fund Expenses (Unaudited) — Six Month Period Ended June 30, 2006

            As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in 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 January 1, 2006 through June 30, 2006.  
 
            Actual Expenses — The first line of 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 of 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 is not the Fund’s actual return. 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. As a shareholder of the Fund, you do not incur any transaction costs, such as sales charges (loads), redemption fees, or exchange fees, but shareholders of other funds may incur such costs. 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 whose shareholders may incur transaction costs.  

                         
Expenses Paid
for the
Beginning Ending 6 months
Account Value Account Value ended
1/1/06 6/30/06 6/30/06*
Actual
  $ 1,000     $ 1,052.40     $ 4.47  
Hypothetical 5% return
    1,000       1,020.44 +     4.40  

  *   Expenses are calculated using the Fund’s annualized expense ratio, which represents the ongoing expenses as a percentage of net assets for the six months ended June 30, 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 fiscal year. The annualized expense ratio for the period was 0.88%.  
  +   Hypothetical expenses are based on the Fund’s actual annualized expense ratios and an assumed rate of return of 5% per year before expenses.  

 
20

 

     
TRUSTEES
  OFFICERS
Ashok N. Bakhru, Chairman
   Kaysie P. Uniacke, President
John P. Coblentz, Jr.
  James A. Fitzpatrick, Vice President
Patrick T. Harker
  James A. McNamara, Vice President
Mary Patterson McPherson
  John M. Perlowski, Treasurer
Alan A. Shuch
  Peter V. Bonanno, Secretary
Wilma J. Smelcer
   
Richard P. Strubel
   
Kaysie P. Uniacke
   
 
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent 		   
 
GOLDMAN SACHS ASSET MANAGEMENT, L.P.
Investment Adviser
 
Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.
 
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 the 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 September 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 1-800-621-2550.
 
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.
 
Holdings and allocations shown 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.
 
Effective May 1, 2006, the Variable Insurance Trust (VIT) CORESM Small Cap Equity Fund was renamed the Variable Insurance Trust (VIT) Structured Small Cap Equity Fund. CORESM is a registered service mark of Goldman, Sachs & Co.
 
    Toll Free (in U.S.): 800-292-4726
This report is prepared for the general information of contract owners and is not an offer of shares of the Goldman Sachs Variable Insurance Trust: Structured Small Cap Equity Fund.
 
Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: August 18, 2006
 
VITSTRCSCSAR/06-1203/08-06/30.4K    

 

Goldman
Sachs Variable Insurance Trust

GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, NEW YORK, NEW YORK 10005

 
Capital Growth Fund
 
Semiannual Report
June 30, 2006
 

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Capital Growth Fund during the six-month reporting period that ended June 30, 2006.

Market Review

During the first half of 2006, the U.S. equity markets finished in positive territory. Energy and Utility companies continued to be favored by investors, producing significant returns. Conversely, sectors such as Healthcare and Technology lagged during the six-month period. The retail sector remained weak as a result of the overall market environment. The Federal Reserve Board raised short-term interest rates for the 17th consecutive time in June 2006. This was the first increase that was not accompanied by a statement indicating future interest rate hikes, which triggered a slight rally in the equities market at the end of June.

Investment Objective

The Fund seeks long-term growth of capital.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006*
             
% of
Company Net Assets Business
Freddie Mac
    4.2 %   Specialty Finance
Microsoft Corp.
    3.6     Computer Software
Baker Hughes, Inc.
    3.4     Oil Well Services & Equipment
Suncor Energy, Inc.
    3.1     Oil & Gas
The McGraw-Hill Cos., Inc.
    3.0     Commercial Services
First Data Corp.
    2.9     Computer Services
Google, Inc.
    2.9     Internet & Online
Schlumberger Ltd.
    2.6     Oil Well Services & Equipment
Yahoo!, Inc.
    2.5     Internet & Online
PepsiCo., Inc.
    2.4     Beverages

* Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

 
1

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

Performance Review

Over the six-month period that ended June 30, 2006, the Fund’s Institutional Shares generated a cumulative total return of -0.56%. This return compares to the -0.93% cumulative total return of the Fund’s benchmark, the Russell 1000 Growth Index (with dividends reinvested), over the same time period. For the period from the inception of the Service Class on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of -3.81%. This compares to the -3.83% cumulative total return of the Fund’s benchmark over the same time period.

The Fund outperformed its benchmark during the reporting period, as a result of stock selection within the Energy and Technology sectors as well as strength in select Wireless Tower companies.

The Energy sector was a top contributor to performance during the six-month period as nearly all of the Fund’s holdings in the sector outperformed that sector in the Index. Schlumberger Ltd. declared a 2-for-1 stock split and increased its dividend by nearly 20% over the period. In addition to these shareholder-friendly actions, the company reported full-year and quarter-end earnings results that surpassed consensus expectations. Baker Hughes, Inc. exceeded earnings expectations, almost doubling profits from a year ago. Baker Hughes benefited from the industry’s increased efforts to find hydrocarbons, as well as several analyst upgrades. U.S. rig counts have been increasing (with over 1,600 total rigs currently in North America), this year’s forecast for hurricanes is severe, and energy prices spiked during the period — all of which have been factors driving the company’s growth. We believe that, as more oil wells are drilled to meet global demand, oil well services businesses like Schlumberger and Baker Hughes will continue to benefit.

Within the Technology sector, Google, Inc. and Cisco Systems, Inc. contributed to the Fund’s performance. Google announced first quarter earnings results were up 60% from a year ago, exceeding analyst expectations. The growth in earnings and revenue outpaced that of other major Internet-based companies, especially in its international operations, where revenue increased 91%. Cisco Systems enhanced results as it reported fiscal second quarter earnings that beat expectations. The company’s order growth is at its strongest level in over a year due to increased demand from its corporate customers. Many companies are focused on increasing the capacity and security of their networks and Cisco has been a beneficiary of this trend. In addition, the company was upgraded by several analysts who believe it should see accelerated revenue and profit growth in 2006. We believe Cisco is well positioned for growth as it has increased its sales force by approximately 30% in recent quarters.

The Fund’s wireless tower companies, Crown Castle International Corp. and American Tower Corp. were both up and contributed to performance during the period. Crown Castle enhanced fund performance, as the company reported results for the first quarter 2006 with strong earnings and total revenue up 14%. In mid-May, the company added more cell towers to its high quality portfolio with its acquisition of the private tower company, Mountain Cell. We believe Crown Castle has strategically managed its balance sheet by taking on large debt which it has effectively controlled using its free cash flow. American Tower contributed to performance as the company reported results for its first quarter of 2006 with total revenues up 74%. All areas of American Tower continued to perform well as the company fully completed its integration of SpectraSite. We believe American Tower’s operating margins are healthy and were aided by the strong performance of wireless carriers. We feel that

 
2

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND
 
Shareholder Letter (continued)

American Tower should benefit from a robust tower leasing environment as it enhances its operations.

In the Consumer Discretionary sector, we sold out of the Fund’s position in Carnival Corp. While the company met our investment criteria for its brand name in the cruising industry, dominant market share, and strong free cash flow, the company has been beset by economic factors that have put pressure on margins. With the increase in oil prices, Carnival’s energy costs have grown over 50% in the past year. However, Carnival has been able to manage this cost through its pricing power, passing these prices on to the consumer. Now we are concerned that, with strains on consumers due to high gas prices, Carnival will not have the pricing power it once had and we do not see the company being able to demonstrate its operating leverage anytime soon. We decided to exit the position and invest the proceeds in companies where we had more conviction going forward.

XM Satellite Radio Holdings, Inc. was down significantly during the period, despite a revenue increase of over 100% driven by strong subscriber growth during the first quarter. Its shares fell after management made some missteps, causing them to lower their outlook for 2006. XM has also been the subject of FCC and FTC investigations. We believe XM is still well positioned for strong growth, as the company expects cars pre-installed with its radios to increase significantly.

The Finance sector detracted from performance, as the government-sponsored enterprise (GSE) Freddie Mac was down during the period. Its shares fell in June as a result of overall weakness in the mortgage finance sector. The key issue that weighed on the sector was concerns about further interest rate hikes and inflation. In addition, a news article was released regarding the restriction of mortgage loan portfolio growth for the GSEs. It said the Treasury might use its authority to reject the GSE’s requests to issue debt, limiting their portfolio growth. This would circumvent the efforts by Congress to issue a new bill strengthening the regulation of the GSEs. We do not believe that the Treasury is likely to reject the GSE’s requests since it would serve to reinforce the implicit guarantee of the government to bail GSEs out in the event of a crisis. In our view, a bill strengthening the regulator will likely not be passed this year due to the lack of negotiations necessary to make a potential compromise. We are still favorable on Freddie Mac due, in part, to the fundamental strength of its franchise. On the positive side in the Finance sector, The Charles Schwab Corp. enhanced fund performance. Improving fundamentals helped its shares rally as assets increased 17% over the past year to $1.2 trillion — a record for the firm. In addition to the assets under management, which drives the bulk of its revenue, Schwab’s trading business grew 62% over the past year. While an increase in the daily average revenue trades (DARTs) is a net positive, we are more heartened by the growth in the asset base, which serves as a strong recurring revenue stream for the company.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Growth Team

July 18, 2006

 
3

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Capital Growth Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT Capital Growth Fund invests primarily in large-capitalization 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 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 participate in the Initial Public Offering (IPO) market, and a portion of the Fund’s returns consequently may be attributable to its investment in IPOs. The market value of IPO shares may fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, and the small number of shares available for trading and limited information about the issuer. When a fund’s asset base is small, IPOs may have a magnified impact on the fund’s performance. As a fund’s assets grow, it is probable that the effect of the fund’s investment in IPOs on its total returns may not be as significant, which could reduce the fund’s performance.

 
4

 

Shareholder Letter (continued)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term Investments include repurchase agreements and securities lending collateral. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
5

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 99.2%
    Aerospace & Defense – 1.7%
      145,630     United Technologies Corp.   $ 9,235,855  
   
    Audio & Visual Equipment – 0.8%
      49,720     Harman International Industries, Inc.     4,244,596  
   
    Beverages – 4.9%
      137,480     Fortune Brands, Inc.     9,762,455  
      222,100     PepsiCo., Inc.     13,334,884  
      96,275     The Coca-Cola Co.     4,141,750  
                 
 
                  27,239,089  
   
    Biotechnology – 4.6%
      200,754     Amgen, Inc.*     13,095,183  
      71,100     Genentech, Inc.*     5,815,980  
      248,700     MedImmune, Inc.*     6,739,770  
                 
 
                  25,650,933  
   
    Broadcasting & Cable/Satellite TV – 1.9%
      165,650     Univision Communications, Inc.*(a)     5,549,275  
      327,350     XM Satellite Radio Holdings, Inc.*(a)     4,795,678  
                 
 
                  10,344,953  
   
    Commercial Services – 5.0%
      202,890     Moody’s Corp.     11,049,389  
      335,050     The McGraw-Hill Companies, Inc.     16,829,562  
                 
 
                  27,878,951  
   
    Computer Hardware – 1.0%
      492,100     EMC Corp.*     5,398,337  
   
    Computer Services – 2.9%
      360,191     First Data Corp.     16,223,003  
   
    Computer Software – 5.2%
      204,625     Electronic Arts, Inc.*     8,807,060  
      865,768     Microsoft Corp.     20,172,394  
                 
 
                  28,979,454  
   
    Drugs & Medicine – 2.7%
      229,684     Pfizer, Inc.     5,390,684  
      294,200     Schering-Plough Corp.     5,598,626  
      97,535     Wyeth     4,331,529  
                 
 
                  15,320,839  
   
    Financials – 6.2%
      11,600     Chicago Mercantile Exchange Holdings, Inc.     5,697,340  
      63,100     Franklin Resources, Inc.     5,477,711  
      53,900     Legg Mason, Inc.     5,364,128  
      65,635     Merrill Lynch & Co., Inc.     4,565,571  
      93,345     Morgan Stanley     5,900,337  
      453,030     The Charles Schwab Corp.     7,239,419  
                 
 
                  34,244,506  
   
    Foods – 1.1%
      113,500     The Hershey Co.     6,250,445  
   
    Gaming/Lodging – 3.6%
      350,700     Cendant Corp.     5,712,903  
      107,820     Harrah’s Entertainment, Inc.     7,674,628  
      170,160     Marriott International, Inc.     6,486,499  
                 
 
                  19,874,030  
   
    Health Care Services – 0.7%
      85,000     Omnicare, Inc.     4,030,700  
   
    Household/Personal Care – 1.2%
      124,417     Procter & Gamble Co.     6,917,585  
   
    Internet & Online – 5.3%
      38,310     Google, Inc.*     16,064,532  
      415,074     Yahoo!, Inc.*     13,697,442  
                 
 
                  29,761,974  
   
    Manufacturing – 1.1%
      84,700     Rockwell Automation, Inc.     6,099,247  
   
    Medical Products – 5.3%
      42,950     Fisher Scientific International, Inc.*     3,137,497  
      211,778     Medtronic, Inc.     9,936,624  
      156,100     St. Jude Medical, Inc.*     5,060,762  
      170,300     Stryker Corp.     7,171,333  
      71,447     Zimmer Holdings, Inc.*     4,052,474  
                 
 
                  29,358,690  
   
    Movies & Entertainment – 0.9%
      141,274     Viacom, Inc. Class B*     5,063,260  
   
    Networking/Telecommunications Equipment – 3.4%
      673,190     Cisco Systems, Inc.*     13,147,401  
      130,900     Motorola, Inc.     2,637,635  
      49,400     Research In Motion Ltd.*     3,446,638  
                 
 
                  19,231,674  
   
    Oil & Gas – 7.9%
      224,140     Canadian Natural Resources Ltd.     12,412,873  
      351,100     Chesapeake Energy Corp.(a)     10,620,775  
      95,600     Quicksilver Resources, Inc.*(a)     3,519,036  
      212,520     Suncor Energy, Inc.     17,216,245  
                 
 
                  43,768,929  
   
    Oil Well Services & Equipment – 6.0%
      232,538     Baker Hughes, Inc.     19,033,235  
      218,040     Schlumberger Ltd.     14,196,585  
                 
 
                  33,229,820  
   
    Pharmacy Benefit Manager – 2.0%
      130,965     Caremark Rx, Inc.     6,531,225  
      81,790     Medco Health Solutions, Inc.*     4,684,931  
                 
 
                  11,216,156  
   
    Producer Goods – 0.8%
      59,910     W.W. Grainger, Inc.     4,507,029  
   
    Publishing – 1.4%
      150,755     Lamar Advertising Co.*     8,119,664  
   
 
The accompanying notes are an integral part of these financial statements.

6

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – (continued)
    Retailing – 6.5%
      190,770     Lowe’s Companies, Inc.   $ 11,574,016  
      228,790     Target Corp.     11,180,967  
      275,520     Wal-Mart Stores, Inc.     13,271,799  
                 
 
                  36,026,782  
   
    Semiconductors – 4.8%
      168,384     Intel Corp.     3,190,877  
      314,279     Linear Technology Corp.     10,525,204  
      322,491     QUALCOMM, Inc.     12,922,214  
                 
 
                  26,638,295  
   
    Specialty Finance – 6.2%
      104,660     American Express Co.     5,570,005  
      110,907     Fannie Mae     5,334,627  
      412,455     Freddie Mac     23,514,060  
                 
 
                  34,418,692  
   
    Technology Services – 0.7%
      56,420     Cognizant Technology Solutions Corp.*     3,801,015  
   
    Telecommunications – 3.4%
      402,290     American Tower Corp.*     12,519,266  
      107,650     Crown Castle International Corp.*     3,718,231  
      72,500     NeuStar, Inc.*     2,446,875  
                 
 
                  18,684,372  
   
    TOTAL COMMON STOCKS
    (Cost $548,446,663)   $ 551,758,875  
   
                             
Principal Interest Maturity
Amount Rate Date Value
   
Repurchase Agreement(b) – 0.8%
    Joint Repurchase Agreement Account II
    $ 4,200,000       5.28 %   07/03/2006     $4,200,000  
    Maturity Value:  $4,201,847
    (Cost $4,200,000)        
   
    TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
    (Cost $552,646,663)     $555,958,875  
   
                     
Shares Description Value
   
Securities Lending Collateral – 3.2%
      17,652,450     Boston Global Investment Trust – Enhanced Portfolio   $ 17,652,450  
    (Cost $17,652,450)        
   
    TOTAL INVESTMENTS – 103.2%
    (Cost $570,299,113)   $ 573,611,325  
   
    LIABILITIES IN EXCESS OF OTHER ASSETS – (3.2)%     (17,961,523 )
   
    NET ASSETS – 100.0%   $ 555,649,802  
   

  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) All or portion of security is on loan.
 
 (b) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment information appears on page 8.
 
The accompanying notes are an integral part of these financial statements.

7

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

ADDITIONAL INVESTMENT INFORMATION

JOINT REPURCHASE AGREEMENT ACCOUNT II — At June 30, 2006, the Fund had an undivided interest in the following Joint Repurchase Agreement Account II which equaled $4,200,000 in principal amount.

                                 
Principal Interest Maturity Maturity
Repurchase Agreements Amount Rate Date Value
Banc of America Securities LLC
  $ 2,860,000,000       5.30%       07/03/2006     $ 2,861,263,167  
Barclays Capital PLC
    1,500,000,000       5.32       07/03/2006       1,500,665,000  
Bear Stearns
    500,000,000       5.31       07/03/2006       500,221,250  
Deutsche Bank Securities, Inc.
    1,000,000,000       5.20       07/03/2006       1,000,433,333  
Greenwich Capital Markets
    300,000,000       5.32       07/03/2006       300,133,000  
J.P. Morgan Securities, Inc.
    400,000,000       5.28       07/03/2006       400,176,000  
Merrill Lynch
    500,000,000       5.25       07/03/2006       500,218,750  
Morgan Stanley & Co.
    3,000,000,000       5.25       07/03/2006       3,001,312,500  
UBS Securities LLC
    1,050,000,000       5.25       07/03/2006       1,050,459,375  
UBS Securities LLC
    475,000,000       5.30       07/03/2006       475,209,792  
UBS Securities LLC
    400,000,000       5.34       07/03/2006       400,178,000  
Wachovia Capital Markets
    250,000,000       5.26       07/03/2006       250,109,583  
TOTAL
   $ 12,235,000,000                     $ 12,240,379,750  
    At June 30, 2006, the Joint Repurchase Agreement Account II was fully collateralized by Federal Home Loan Bank, 0.00% to 11.00%, due 07/07/2006 to 04/20/2016; Federal Home Loan Mortgage Association, 3.00% to 8.50%, due 02/01/2007 to 07/01/2036; Federal National Mortgage Association, 0.00% to 10.50%, due 02/01/2007 to 07/01/2036; and U.S. Treasury Bonds, 5.00% to 7.14%, due 11/13/2008 to 10/20/2018. The aggregate market value of the collateral, including accrued interest, was $12,492,409,737.  
 
The accompanying notes are an integral part of these financial statements.

8

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)
               
 
    Assets:
   
Investment in securities, at value (identified cost $552,646,663) — including $17,175,839 of securities on loan
  $ 555,958,875  
   
Securities lending collateral, at value (cost $17,652,450)
    17,652,450  
   
Cash
    110,080  
   
Receivables:
       
     
Fund shares sold
    350,471  
     
Dividends and interest
    153,426  
     
Securities lending income
    737  
   
Other assets
    2,085  
   
   
Total assets
     574,228,124  
   
 
    Liabilities:
   
Payables:
       
     
Payable upon return of securities loaned
    17,652,450  
     
Fund shares repurchased
    405,367  
     
Amounts owed to affiliates
    391,482  
   
Accrued expenses
    129,023  
   
   
Total liabilities
     18,578,322  
   
 
    Net Assets:
   
Paid-in capital
    508,945,444  
   
Accumulated undistributed net investment income
    266,345  
   
Accumulated net realized gain on investment and foreign currency related transactions
    43,125,849  
   
Net unrealized gain on investments and translation of assets and liabilities denominated in foreign currencies
    3,312,164  
   
   
NET ASSETS
   $ 555,649,802  
   
   
Net Assets:
       
     
Institutional
  $ 161,532,306  
     
Service
    394,117,496  
   
   
Shares Outstanding:
       
     
Institutional
    15,214,166  
     
Service
    37,141,953  
   
   
Total shares of beneficial interest outstanding, $0.001 par value (unlimited shares authorized)
    52,356,119  
   
   
Net asset value, offering and redemption price per share:
       
     
Institutional
  $ 10.62  
     
Service
  $ 10.61  
   
 
The accompanying notes are an integral part of these financial statements.

9

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

Statement of Operations

For the Six Months Ended June 30, 2006 (Unaudited)
               
 
    Investment income:
   
Dividends(a)
  $ 2,829,148  
   
Interest (including securities lending income of $4,073)
    92,738  
   
   
Total income
     2,921,886  
   
    Expenses:
   
Management fees
    2,156,761  
   
Distribution and Service fees
    508,337  
   
Transfer agent fees
    115,027  
   
Printing fees
    84,159  
   
Custody and accounting fees
    56,157  
   
Professional fees
    30,525  
   
Trustee fees
    6,803  
   
Registration fees
    629  
   
Other
    5,499  
   
   
Total expenses
     2,963,897  
   
   
Less — expense reductions
    (305,410 )
   
   
Net expenses
     2,658,487  
   
   
NET INVESTMENT INCOME
     263,399  
   
    Realized and unrealized gain (loss) on investment and foreign currency transactions:
   
Net realized gain (loss) from:
       
     
Investment transactions (including commissions recaptured of $81,082)
    70,631,518  
     
Foreign currency related transactions
    (124 )
   
Net change in unrealized loss on:
       
     
Investments
    (87,491,675 )
     
Translation of assets and liabilities denominated in foreign currencies
    (48 )
   
   
Net realized and unrealized loss on investment and foreign currency transactions
     (16,860,329 )
   
   
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ (16,596,930 )
   

                   (a)  Foreign taxes withheld on dividends were $8,775.

 
The accompanying notes are an integral part of these financial statements.

10

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

Statements of Changes in Net Assets

                       
For the
Six Months Ended For the
June 30, 2006 Year Ended
(Unaudited) December 31, 2005
    From operations:
   
Net investment income
  $ 263,399     $ 252,902  
   
Net realized gain on investment and foreign currency related transactions
    70,631,394       2,625,757  
   
Payment by affiliates to reimburse certain security claims
    —       2,915  
   
Net change in unrealized gain (loss) on investments, futures and translation of assets and liabilities denominated in foreign currencies
    (87,491,723 )     1,234,312  
   
   
Net increase (decrease) in net assets resulting from operations
     (16,596,930 )     4,115,886  
   
    Distributions to shareholders:
   
From net investment income
               
     
Institutional Shares
    —       (249,956 )
     
Service Shares
    —       —  
   
   
Total distributions to shareholders
     —       (249,956 )
   
    From share transactions:
   
Proceeds from sales of shares
    7,699,056       11,639,337  
   
Proceeds received in connection with merger
    454,868,620       —  
   
Reinvestment of dividends and distributions
    —       249,956  
   
Cost of shares repurchased
    (58,374,570 )     (34,389,302 )
   
   
Net increase (decrease) in net assets resulting from share transactions
     404,193,106       (22,500,009 )
   
   
TOTAL INCREASE (DECREASE)
     387,596,176       (18,634,079 )
   
    Net assets:
   
Beginning of period
    168,053,626       186,687,705  
   
   
End of period
  $ 555,649,802     $ 168,053,626  
   
   
Accumulated undistributed net investment income
   $ 266,345     $ 2,946  
   
 
The accompanying notes are an integral part of these financial statements.

11

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                                 
Income (loss) from Ratios assuming no
investment operations Distributions to shareholders expense reductions
Net Ratio of Ratio of Ratio of
Net asset realized From Net asset Net assets, Ratio of net investment total net investment
value, Net and Total from From net net value, end of net expenses income to expenses income to Portfolio
Year — Share beginning investment unrealized investment investment realized Total end of Total period to average average to average average turnover
Class of period income(b) gain (loss) operations income gains distributions period return(c) (in 000s) net assets net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)
    2006 — Institutional   $ 10.68     $ 0.01     $ (0.07 )   $ (0.06 )   $ —     $ —     $ —     $ 10.62       (0.56 )%   $ 161,532       0.86 % (d)     0.15 % (d)     0.86 % (d)     0.15 % (d)     46 %    
    2006 — Service(a)     11.03       —       (0.42 )     (0.42 )     —       —       —       10.61       (3.81 )     394,118       0.96 (d)     0.05 (d)     1.11 (d)     (0.10 )(d)     46      
    For the Years ended December 31,
    2005 — Institutional     10.39       0.02       0.29       0.31       (0.02 )     —       (0.02 )     10.68       2.94       168,054       0.90       0.15       0.90       0.15       35      
    2004 — Institutional     9.59       0.07       0.80       0.87       (0.07 )     —       (0.07 )     10.39       9.09       186,688       0.89       0.69       0.89       0.69       45      
    2003 — Institutional     7.77       0.03       1.81       1.84       (0.02 )     —       (0.02 )     9.59       23.74       179,694       1.02       0.38       1.43       (0.03 )     16      
    2002 — Institutional     10.28       0.01       (2.50 )     (2.49 )     (0.02 )     —       (0.02 )     7.77       (24.33 )     18,052       1.10       0.16       1.77       (0.51 )     24      
    2001 — Institutional     12.09       0.02       (1.78 )     (1.76 )     (0.02 )     (0.03 )     (0.05 )     10.28       (14.46 )     16,266       1.00       0.15       1.69       (0.54 )     39      
   

(a)  Service Share Class commenced on January 9, 2006.
(b)  Calculated based on the average shares outstanding methodology.
(c)  Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than a full year are not annualized.
(d)  Annualized.

The accompanying notes are an integral part of these financial statements.

 
12

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

Notes to Financial Statements

June 30, 2006 (Unaudited)

1. ORGANIZATION

Goldman Sachs Variable Insurance 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 Capital Growth Fund (the “Fund”). The Fund is a diversified portfolio under the Act offering two classes of shares — Institutional and Service.
     Shares of the Trust may be purchased and held by separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Trust are not offered directly to the general public.

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 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 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. Service Shares bear all expenses and fees relating to their Distribution and Service Plan.

D. Federal Taxes and Distributions to Shareholders — 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 provisions are required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gains distributions, if any, are declared and paid annually.

     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules which may differ from generally accepted accounting principles. Therefore, the source of the Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain, or from tax return of capital.

E. 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 counterparties, with a current value equal to or greater than the market value of the corresponding transactions.

 
13

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

F. 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.

     Pursuant to exemptive relief granted by the Securities and Exchange Commission (“SEC”) and terms and conditions contained therein, the Fund, together with other registered investment companies having management or investment advisory agreements with Goldman Sachs Asset Management, L.P. (“GSAM”), or its affiliates may transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

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 & Co. (“Goldman Sachs”), serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Fund. Under this Agreement, GSAM manages the Fund, subject to the general supervision of the Trust’s Board of Trustees.
     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAM is entitled to a fee (“Management fee”) computed daily and payable monthly, equal to an annual percentage rate of the Fund’s average daily net assets.
     The Investment Adviser has entered into a fee reduction commitment for the Fund which was implemented on a voluntary basis beginning on July 1, 2005 and on a contractual basis as of April 28, 2006 to achieve the rates listed below:
         
Average Daily Net Assets Annual Rate
First $1 Billion
    0.75 %
Next $1 Billion
    0.68 %
Over $2 Billion
    0.65 %

     In connection with the reorganization of the Allmerica Select Growth Fund into the Fund, GSAM has contractually agreed to reimburse the Fund as necessary to limit the total annual operating expenses of the Services Shares of the Fund to 1.00% until June 2007.

     GSAM has voluntarily agreed to limit certain “Other Expenses” of the Fund (excluding Management fees, Transfer Agency fees and expenses, taxes, interest, brokerage fees and litigation, indemnification costs, shareholder meeting and other extraordinary expenses exclusive of any expense offset arrangements) to the extent that such expenses exceed, on an annual basis, 0.114% of the average daily net assets of the Fund. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Fund is not obligated to reimburse GSAM for prior fiscal year expense reimbursements, if any. For the six months ended June 30, 2006, GSAM did not make any reimbursements to the Fund.
     In addition, the Fund has entered into certain offset arrangements with the custodian resulting in a reduction in the Fund’s expenses. For the six months ended June 30, 2006, custody fees were reduced by approximately $1,000.
     Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly equal to an annual rate of 0.04% of the average daily net assets of the Fund. Goldman Sachs serves as the distributor of the Fund’s shares at no cost to the Fund.
 
14

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND
 
3. AGREEMENTS (continued)

     The Trust has adopted, on behalf of Service Shares of the Fund, a Distribution and Service plan (the “Plan”). Under the Plan, Goldman Sachs is entitled to a monthly fee for distribution services equal to, on an annual basis, 0.25% of the Fund’s average daily net assets attributable to Service Shares. GSAM has voluntarily agreed to waive Distribution and Service fees for Service Shares so as not to exceed 0.10% for the Fund. This waiver may be modified or terminated at any time at the option of Goldman Sachs. For the six months ended June 30, 2006, GSAM waived $304,386 in Distribution and Service fees for the Fund.

     At June 30, 2006, amounts owed to affiliates were approximately $341,000, $32,000 and $18,000 for Management, Distribution and Service, and Transfer Agent fees, respectively.

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long term securities for the six months ended June 30, 2006, were $493,235,656 and $528,507,906, respectively. For the six months ended June 30, 2006, Goldman Sachs earned approximately $19,000 of brokerage commissions from portfolio transactions executed on behalf of the Fund.

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 Fund 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.
     Both the Fund and BGA receive compensation relating to the lending of the Fund’s securities. The amount earned by the Fund for the six months ended June 30, 2006, is reported parenthetically on the Statement of Operations. For the six months ended June 30, 2006, BGA earned approximately $800 in fees as securities lending agent. At June 30, 2006, the Fund loaned securities having a market value of $17,175,839 collateralized by cash in the amount of $17,652,450. The Fund invests the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by GSAM, for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Fund bears the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.

6. LINE OF CREDIT FACILITY

The Fund participates in a $400,000,000 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 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. This 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 June 30, 2006, the Fund did not have any borrowings under this facility.
 
15

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

7. TAX INFORMATION

As of the Fund’s most recent fiscal year end, December 31, 2005, the Fund’s capital loss carryforwards and certain timing differences on a tax basis were as follows.
           
Capital loss carryforward:(1)(2)
       
 
Expiring 2008
  $ (4,206,400 )
 
Expiring 2009
    (13,983,325 )
 
Expiring 2010
    (6,239,358 )
 
Expiring 2011
    (1,064,803 )
Total capital loss carryforward
  $ (25,493,886 )
Timing differences (post-October losses)
    (1,208,929 )

(1)  Expiration occurs on December 31 of the year indicated utilization of these losses may be limited under the Code.
(2)  During the year ended December 31, 2005, the Fund utilized $3,606,802 of capital loss carryforwards.

     At June 30, 2006, the Fund’s aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes were as follows:
         
Tax cost
  $ 575,288,100  
Gross unrealized gain
    36,368,456  
Gross unrealized loss
    (38,045,231 )
Net unrealized security loss
  $ (1,676,775 )

     The difference between book-basis and tax basis unrealized gains (losses) is attributable primarily to wash sales.

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 the Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds and the Trustees and Officers of the Goldman Sachs 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 and the Trustees and Officers of the Trust. The Fund, along with 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 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.
     Based on currently available information, GSAM and GSAMI believe that the likelihood that the pending purported class action and derivative action lawsuit will have a material adverse financial impact on the Fund is remote, and the pending
 
16

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

8. OTHER MATTERS (continued)

action is not likely to materially affect its ability to provide investment management services to its clients, including the Goldman Sachs Funds.

Mergers and Reorganizations — At a meeting held on July 12, 2005, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization (the “Agreement”) providing for the tax-free acquisition of the Allmerica Select Growth Fund by the Goldman Sachs VIT Capital Growth Fund. Following the approval of the Board of Trustees and shareholders of the Allmerica Investment Trust Select Growth Fund, the acquisition was completed on January 9, 2006.

     Pursuant to the Agreement, the assets and liabilities of the Allmerica Investment Trust Select Growth Fund Service Class were transferred into the Goldman Sachs VIT Capital Growth Fund Service Class in a tax-free exchange as follows:
                         
Acquired Fund’s
Exchanged Shares Value of Shares Outstanding
Survivor/Acquired Fund of Survivor Issued Exchanged Shares on January 6, 2006
Goldman Sachs VIT Capital Growth Fund Service Class/ Allmerica Investment Trust Select Growth Fund Service Class
    41,239,222     $ 454,868,620       264,467,645  

     The following chart shows the Survivor Fund’s and Acquired Fund’s aggregate net assets (immediately before and after the completion of the acquisition) and the Acquired Fund’s unrealized appreciation.

                                 
Survivor Fund’s Acquired Fund’s Survivor Fund’s
Aggregate Aggregate Aggregate
Net Assets Net Assets Acquired Fund’s Net Assets
before before Unrealized immediately
Survivor/Acquired Fund acquisition acquisition Appreciation after acquisition
Goldman Sachs VIT Capital Growth Fund/ Allmerica Investment Trust Select Growth Fund
  $ 173,497,578     $ 454,868,620     $ 74,244,861     $ 628,366,197  

New Accounting Pronouncement — On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

 
17

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

9. SUMMARY OF SHARE TRANSACTIONS

Share activity is as follows:
                                 
For the Six Months Ended For the Year Ended
June 30, 2006 December 31, 2005
Shares Dollars Shares Dollars
Institutional Shares
                                
Shares sold
    647,961     $ 7,124,656       1,146,173     $ 11,639,337  
Reinvestment of dividends and distributions
    —       —       23,144       249,956  
Shares repurchased
    (1,175,794 )     (12,914,437 )     (3,389,711 )     (34,389,302 )
      (527,833 )     (5,789,781 )     (2,220,394 )     (22,500,009 )
Service Shares*
                                
Shares sold
    80,297       574,400       —       —  
Shares issued in connection with merger
    41,239,222       454,868,620       —       —  
Reinvestment of dividends and distributions
    —       —       —       —  
Shares repurchased
    (4,177,566 )     (45,460,133 )     —       —  
      37,141,953       409,982,887       —       —  
NET INCREASE (DECREASE)
     36,614,120     $ 404,193,106       (2,220,394 )   $ (22,500,009 )

*  Service Share Class commenced on January 9, 2006.

 
18

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

Statement Regarding Basis for Approval of Management Agreement (Unaudited)

     The Trustees oversee the management of Goldman Sachs Variable Insurance Trust (the “Trust”), and review the investment performance and expenses of the investment fund covered by this Report (the “Fund”) at regularly scheduled meetings held during the Fund’s fiscal year. In addition, the Trustees determine annually whether to approve and continue the Trust’s investment management agreement (the “Management Agreement”) with Goldman Sachs Asset Management, L.P. (the “Investment Adviser”) for the Fund.

     The Management Agreement was most recently approved by the Trustees, including all of the Trustees who are not parties to the Management Agreement or “interested persons” (as defined in the Investment Company Act of 1940, as amended) of any party thereto (the “Independent Trustees”), on June 15, 2006 (the “Annual Contract Meeting”).

     To assist the Trustees in their deliberations at the Annual Contract Meeting, and in addition to the reviews of the Fund’s investment performance, expenses and other matters at regularly scheduled Board meetings, the Trustees have a Contract Review Committee (the “Committee”) whose members include all of the Independent Trustees. The Committee held meetings on December 15, 2005, February 8, 2006 and May 10, 2006. At these Committee meetings, the Independent Trustees considered matters relating to the Management Agreement including: (a) the Fund’s investment performance; (b) the Fund’s management fee arrangements; (c) the Investment Adviser’s undertaking to reimburse certain expenses of the Fund that exceed a specified level; (d) the Investment Adviser’s potential economies of scale and the breakpoints for the fees payable by the Fund under the Management Agreement; (e) the relative expense level of the Fund; (f) the Investment Adviser’s profitability with respect to the Trust and the Fund; (g) information on the advisory fees charged by the Investment Adviser to institutional accounts; (h) the quality of the non-advisory services provided to the Fund; (i) the statutory and regulatory requirements applicable to the approval and continuation of mutual fund investment management agreements; (j) an evaluation of Trustees’ the contract review process provided by an outside third party; and (k) information on the processes followed by the third party mutual fund data provider engaged as part of the Trustees’ contract review (the “Outside Data Provider”) in producing investment performance and expense comparisons for the Fund.

     At the Annual Contract Meeting, the Trustees reviewed the matters that were considered at the Committee meetings and also considered additional matters including: (a) a summary of fee concessions by the Investment Adviser and its affiliates with respect to the Goldman Sachs mutual funds since 2003; (b) the quality of the Investment Adviser’s services; (c) the structure, staff and capabilities of the Investment Adviser and its portfolio management team; (d) the groups within the Investment Adviser that support the portfolio management team, including the legal and compliance departments, the valuation oversight group, the risk and performance analytics group, the business planning team and the technology group; (e) the Investment Adviser’s business continuity and disaster recovery planning; (f) the Investment Adviser’s financial resources and its ability to hire and retain talented personnel; (g) the fees received by the Investment Adviser’s affiliates from the Fund for transfer agency, securities lending, distribution, portfolio brokerage and other services; (h) the terms of the Management Agreement; (i) the administrative services provided under the Management Agreement, including the nature and extent of the Investment Adviser’s oversight of the Fund’s other service providers, including the custodian and fund accounting agent; and (j) the Investment Adviser’s policies addressing various potential conflicts of interest. At the Annual Contract Meeting, the Trustees also considered at further length the Fund’s investment performance, fees and expenses, including the Fund’s expense trends over time and the breakpoints in the contractual fee rate under the Management Agreement approved in 2005.

     In connection with the Committee meetings and the Annual Contract Meeting, the Trustees received written materials and oral presentations on the topics covered, and were advised by their independent legal counsel regarding their responsibilities under applicable law. Also, in conjunction with these meetings, the Trustees attended other sessions at which the Trustees reviewed the commission rates paid by the Fund on brokerage transactions, the Investment Adviser’s receipt of research services in connection with those transactions, and the payment of Rule 12b-1 distribution and service fees that are payable by the Fund on its Service Share Class. Information was also provided to the Trustees relating to the Fund’s portfolio turnover, revenue sharing by the Investment Adviser, portfolio manager compensation, the alignment of the interests of the Fund and the portfolio managers, the number and types of accounts managed by the portfolio managers, and other matters. During the course of their deliberations, the Independent Trustees met in executive sessions without employees of the Investment Adviser present.

 
19

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

     The presentations made at the Contract Review Committee meetings and the Annual Contract Meeting encompassed the Fund and other mutual fund portfolios for which the Board of Trustees has responsibility. While the management agreements for the Fund and these other mutual fund portfolios were approved at the same Annual Contract Meeting, the Trustees considered the Management Agreement as it applied to the Fund separately.

     In evaluating the Management Agreement at the Annual Contract Meeting, the Trustees relied upon their knowledge, resulting from their meetings and other interactions throughout the year, of the Investment Adviser, its services and the Fund. At those meetings the Trustees received materials relating to the Investment Adviser’s investment management and other services under the Management Agreement, including: (a) information on the investment performance of the Fund in comparison to other mutual funds and benchmark performance indices; (b) general investment outlooks in the markets in which the Fund invests; (c) compliance reports; and (d) expenses borne by the Fund. In addition, the Trustees were provided with disclosure materials regarding the Goldman Sachs mutual funds and their expenses that are provided to investors who invest in the funds, as well as information on the Goldman Sachs mutual funds’ competitive universe and discussed the broad range of other investment choices that are available to those investors.

     In connection with their approval of the Management Agreement, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. As part of their review, the Trustees considered the nature, extent and quality of the services provided by the Investment Adviser. In this regard, the Trustees considered both the investment advisory services, and the other, non-advisory services, that are provided to the Fund by the Investment Adviser and its affiliates. These services include services as the Fund’s transfer agent, securities lending agent and distributor. In addition, affiliates of the Investment Adviser receive compensation in connection with the execution of the Fund’s portfolio securities transactions. The Trustees concluded that the Investment Adviser was both able to commit substantial financial and other resources to the operations of the Fund and had, in fact, continued to commit those resources in multiple areas including portfolio management, trading, technology, human resources, tax, treasury, legal, compliance, vendor oversight and risk management. The Trustees also believed that the Investment Adviser had made significant commitments to address regulatory compliance requirements applicable to the Fund and the Investment Adviser, including education and training initiatives.

     The Trustees also considered the investment performance of the Fund and the Investment Adviser. In this regard, the Trustees compared the investment performance of the Fund to the performance of other SEC-registered funds and to rankings and ratings issued by the Outside Data Provider. The Trustees also reviewed the Fund’s investment performance relative to its performance benchmark. This information on the Fund’s investment performance was provided for one, three and five year periods. In addition, the Trustees considered the investment performance trends of the Fund over time, and reviewed the investment performance of the Fund in light of its investment objective and policies, as well as in light of periodic analyses of its quality and risk profile. In addition, the Trustees considered whether the Fund had operated within its investment policies, and its record of compliance with its investment limitations. The Trustees believed that the Fund was providing investment performance within a competitive range for long-term investors for the periods ended March 31, 2006, and that GSAM’s continued management would benefit the Fund and its shareholders.

     The Board of Trustees also considered the contractual fee rate payable by the Fund under the Management Agreement. In this regard, the Trustees considered information on the services rendered by the Investment Adviser to the Fund, which included both advisory and administrative services that were directed to the needs and operations of the Fund as a registered mutual fund. They also considered information that indicated that these mutual fund services differed in various significant respects from the services provided to the Investment Adviser’s institutional accounts, which generally paid lower fees. In addition, the fees paid by the Fund and the Fund’s total operating expense ratios (before and after expense reimbursements) were compared to similar information for mutual funds advised by other, unaffiliated investment management firms. Most of the comparisons of the Fund’s fee rates and total operating expense ratios were prepared by the Outside Data Provider.

     More particularly, the Trustees reviewed analyses prepared by the Outside Data Provider of the expense rankings of the Fund. The analyses provided a comparison of the Fund’s management fees to a relevant peer group and a category universe; an expense analysis which compared the Fund’s expenses to a peer group and a category universe; and a five-year history comparing the Fund’s expenses to the category average. The analyses also compared the Fund’s transfer agency fees, custody and accounting fees and other expenses to a peer group and median. The Trustees believed that the comparisons provided by

 
20

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND

the Outside Data Provider were useful in evaluating the reasonableness of the management fees paid by the Fund. In addition, the Trustees considered the Investment Adviser’s voluntary undertaking to limit the Fund’s total expense ratio (excluding certain expenses) to a specified level. This voluntary undertaking is in addition to the Investment Adviser’s separate contractual agreement to reimburse the Fund as necessary to limit the total annual operating expenses of the Service Share of the Fund to a specified level until June 2007.

     The Board of Trustees also considered the breakpoints in the contractual fee rate under the Management Agreement for the Fund that were approved in 2005, which had been implemented at the following annual percentages of the average daily net assets of the Fund:

0.75% on the first $1 billion, 0.68% over $1 billion up to $2 billion and 0.65% over $2 billion.

     In approving these new fee breakpoints, the Trustees had reviewed information regarding the Investment Adviser’s potential economies of scale, and whether the Fund and its shareholders were participating in the benefits of these economies. In this regard, the Trustees considered the amount of assets in the Fund; the information provided by the Investment Adviser relating to the costs of the services provided by the Investment Adviser and its affiliates and the profits realized by them; and information comparing fee rates charged by the Investment Adviser with fee rates charged by other, unaffiliated investment managers to other mutual funds. Upon reviewing these matters again at the Annual Contract Meeting in 2006, the Trustees continued to believe that the fee breakpoints were a way to ensure that benefits of scalability would be passed along to shareholders at the specified asset levels.

     The Trustees also considered the other benefits derived by the Investment Adviser and its affiliates from the Fund as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services, and the brokerage and research services received by the Investment Adviser in connection with the placement of brokerage transactions for the Fund. In this regard, the Trustees noted that the Investment Adviser had adopted a policy to cease obtaining third party non-broker research based on the Fund’s brokerage transactions. They also noted that during the past year the Fund had created a new share class, Service Shares, with a distribution and service plan under which an affiliate of the Investment Adviser would receive fees.

     In addition, the Trustees reviewed the Investment Adviser’s pre-tax revenues and pre-tax margins with respect to the Trust and the Fund. In this regard the Trustees reviewed, among other things, profitability analyses and summaries, revenue and expense schedules, and expense allocation methodologies, as well as a report of independent accountants regarding the results of certain agreed-upon procedures to verify expense allocation calculations that were designed to assist the Trustees in their evaluation of the Investment Adviser’s schedules of revenues and expenses. The Trustees considered the Investment Adviser’s revenues and margins both in absolute terms and in comparison to the information on the reported margins earned by other asset management firms.

     After deliberation and consideration of the information provided, including the factors described above, the Trustees concluded that the management fees paid by the Fund were reasonable in light of the services provided by the Investment Adviser, its costs and the Fund’s current and reasonably foreseeable asset levels, and that the Management Agreement should be approved and continued.

 
21

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CAPITAL GROWTH FUND 

Capital Growth Fund Expenses (Unaudited) — Six Month Period Ended June 30, 2006

            As a shareholder of Institutional and Service Shares of the Fund, you incur ongoing costs, including management fees; distribution and service (12b-1) fees (with respect to Service Shares); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in Institutional Shares 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 January 1, 2006 through June 30, 2006.  
 
            Actual Expenses — The first line under each share class of 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 of 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 is not the Fund’s actual return. 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. As a shareholder of the Fund, you do not incur any transaction costs, such as sales charges (loads), redemption fees, or exchange fees, but shareholders of other funds may incur such costs. 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 whose shareholders may incur transaction costs.  

                         
Expenses Paid
for the
Beginning Ending 6 months
Account Value Account Value ended
Share Class 1/1/06 6/30/06 6/30/06*
Institutional
                        
Actual
  $ 1,000.00     $ 994.40     $ 4.23  
Hypothetical 5% return
    1,000.00       1,020.55 +     4.29  
Service#
                        
Actual
    1,000.00       961.90       4.41  
Hypothetical 5% return
    1,000.00       1,018.93 +     4.54  

  *   Expenses 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 June 30, 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 fiscal year. The annualized expense ratios for the period were 0.86% and 0.96% for Institutional and Service Shares, respectively.  
  #   Service Share Class commenced on January 9, 2006. The Beginning Account Value is as of January 9, 2006.  
  +   Hypothetical expenses are based on the Fund’s actual annualized expense ratios and an assumed rate of return of 5% per year before expenses.  

 
22

 

     
TRUSTEES
  OFFICERS
Ashok N. Bakhru, Chairman
   Kaysie P. Uniacke, President
John P. Coblentz, Jr.
  James A. Fitzpatrick, Vice President
Patrick T. Harker
  James A. McNamara, Vice President
Mary Patterson McPherson
  John M. Perlowski, Treasurer
Alan A. Shuch
  Peter V. Bonanno, Secretary
Wilma J. Smelcer
   
Richard P. Strubel
   
Kaysie P. Uniacke
   
 
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent 		   
 
GOLDMAN SACHS ASSET MANAGEMENT, L.P.
Investment Adviser
 
Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.
 
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 the 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 September 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 1-800-621-2550.
 
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.
 
Holdings and allocations shown 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.
 
    Toll Free (in U.S.): 800-292-4726
 
This report is prepared for the general information of contract owners and is not an offer of shares of the Goldman Sachs Variable Insurance Trust: Capital Growth Fund.
 
Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: August 18, 2006
 
VITCGSAR/06-1199/08-06/35.2K    

 

Goldman
Sachs Variable Insurance Trust

GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, NEW YORK, NEW YORK 10005

 
Mid Cap Value Fund
 
Semiannual Report
June 30, 2006
 

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Mid Cap Value Fund during the six-month reporting period that ended June 30, 2006.

Market Review

During the first half of 2006, the overall U.S. equity markets finished in positive territory, with the S&P 500 Index returning 2.71%. While the economy expanded and corporate profits remained strong, the headwinds from steadily rising interest rates, inflationary pressures, and the potential for additional Federal Reserve Board rate hikes tempered returns. From a market-cap perspective, small-cap stocks outperformed their mid- and large-cap counterparts over the six-month period, with the Russell 2000, Russell Midcap, and Russell 1000 Indexes returning 8.21%, 4.84%, and 2.76%, respectively. Within the mid-cap universe, value outperformed growth, as the Russell MidCap Value Index returned 7.02% and the Russell Midcap Growth Index returned 2.56%, respectively.

Investment Objective

The Fund seeks long-term capital appreciation.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006*

             
% of
Company Net Assets Business
Range Resources Corp.
    3.1 %   Oil & Refining
Entergy Corp.
    2.5     Electric Utilities
J.C. Penney Co., Inc.
    2.4     Retail Apparel
AMBAC Financial Group, Inc.
    2.4     Property Insurance
PPL Corp.
    2.2     Electric Utilities
EOG Resources, Inc.
    2.2     Energy Resources
Harrah’s Entertainment, Inc.
    2.2     Hotel & Leisure
The Bear Stearns Companies, Inc.
    2.1     Brokers
PG&E Corp.
    2.1     Electric Utilities
Apartment Investment & Management Co.
    1.9     REITs

* Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

 
1

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND
 
Shareholder Letter (continued)

Performance Review

Over the six-month period that ended June 30, 2006, the Fund’s Institutional Shares generated a cumulative total return of 4.70%. This return compares to the 7.02% cumulative total return of the Fund’s benchmark, the Russell Midcap Value Index (with dividends reinvested), over the same time period. For the period from the inception of the Service Class on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of 1.88%. This return compares to the 3.97% cumulative total return of the Fund’s benchmark over the same time period.

During the reporting period, the Fund’s holdings in the Energy and Consumer Cyclicals sectors detracted from results. In contrast, its Basic Materials and Financials stocks generated solid returns.

Several of the Fund’s largest Energy holdings, such as EOG Resources, Inc., lagged the market as the winter of 2005/2006 ranked as one of the warmest on record, resulting in weakness in natural gas fundamentals. We continue to favor Energy companies with a mix of low cost structures, positive reserve trends, and disciplined management teams. In Technology, weak investor sentiment pressured shares of Activision, Inc. and Seagate Technology, but we remain positive on the long-term fundamentals for both companies. We believe Activision and Seagate offer excellent opportunities in the Technology field due to company-level improvements and shareholder-friendly actions. Other stocks that detracted from results during the reporting period were Lennar Corp. and MedImmune, Inc.

Across the portfolio, several individual stocks ranked as top performers. J. C. Penney Co., Inc., a top holding, continues to perform strongly due to the company’s improved profitability and leadership. Improved fundamentals at Allegheny Technologies, Inc. and Carpenter Technology Corp. also enhanced Fund results. We subsequently sold Carpenter Technology to capture profits. In Consumer Cyclicals, auto safety provider Autoliv, Inc. contributed to performance, despite troubles at U.S. automakers. Autoliv has benefited from a low-cost labor structure and limited exposure to U.S. automakers. Additionally, the company had used recent free cash flow to improve its debt structure, as well as to repurchase its own shares.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Value Portfolio Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Mid Cap Value Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the

 
2

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 

return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT Mid Cap Value Fund invests primarily in mid-capitalization 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 securities of mid-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. 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.

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term Investments include repurchase agreements and securities lending collateral. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
3

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 97.7%
    Biotechnology – 0.9%
      634,267     MedImmune, Inc.*   $ 17,188,636  
   
    Brokers – 2.4%
      217,900     E-Trade Financial Corp.*     4,972,478  
      295,519     The Bear Stearns Companies, Inc.     41,396,301  
                 
 
                  46,368,779  
   
    Chemicals – 1.4%
      166,016     Ashland, Inc.     11,073,267  
      333,827     Rohm & Haas Co.     16,731,409  
                 
 
                  27,804,676  
   
    Computer Hardware – 4.4%
      446,093     Amphenol Corp.     24,963,364  
      330,063     Arrow Electronics, Inc.*     10,628,029  
      19,816     NCR Corp.*     726,058  
      977,576     Seagate Technology*(a)     22,132,321  
      304,045     Tessera Technologies, Inc.*     8,361,237  
      531,819     Zebra Technologies Corp.*     18,166,937  
                 
 
                  84,977,946  
   
    Computer Software – 1.4%
      2,353,197     Activision, Inc.*     26,779,382  
   
    Construction – 1.3%
      559,717     Lennar Corp.     24,834,643  
   
    Consumer Durables – 0.4%
      99,285     Mohawk Industries, Inc.*     6,984,700  
   
    Defense/Aerospace – 1.9%
      221,104     Alliant Techsystems, Inc.*     16,881,290  
      348,327     Rockwell Collins, Inc.     19,461,030  
                 
 
                  36,342,320  
   
    Diversified Energy – 1.8%
      1,460,298     The Williams Companies, Inc.     34,112,561  
   
    Drugs – 2.4%
      565,997     Charles River Laboratories International, Inc.*     20,828,689  
      912,609     IMS Health, Inc.     24,503,552  
                 
 
                  45,332,241  
   
    Electric Utilities – 12.0%
      365,393     CMS Energy Corp.*     4,728,185  
      643,245     DPL, Inc.     17,238,966  
      912,988     Edison International     35,606,532  
      692,351     Entergy Corp.     48,983,833  
      231,579     FirstEnergy Corp.     12,553,898  
      391,838     Northeast Utilities     8,099,292  
      1,022,494     PG&E Corp.     40,163,564  
      1,328,027     PPL Corp.     42,895,272  
      71,850     Public Service Enterprise Group, Inc.     4,750,722  
      92,800     Sierra Pacific Resources*     1,299,200  
      379,009     Wisconsin Energy Corp.     15,274,063  
                 
 
                  231,593,527  
   
    Energy Resources – 3.8%
      613,766     EOG Resources, Inc.     42,558,534  
      505,295     Ultra Petroleum Corp.*     29,948,835  
                 
 
                  72,507,369  
   
    Environmental & Other Services – 1.4%
      934,690     Allied Waste Industries, Inc.*     10,618,079  
      412,695     Republic Services, Inc.     16,648,116  
                 
 
                  27,266,195  
   
    Food & Beverage – 1.5%
      312,963     Pepsi Bottling Group, Inc.     10,061,761  
      665,292     Smithfield Foods, Inc.*     19,180,368  
                 
 
                  29,242,129  
   
    Gas Utilities – 1.4%
      688,745     AGL Resources, Inc.     26,254,959  
   
    Grocery – 0.5%
      384,200     Safeway, Inc.     9,989,200  
   
    Health Insurance – 1.9%
      322,997     Coventry Health Care, Inc.*     17,745,455  
      425,212     Health Net, Inc.*     19,206,826  
                 
 
                  36,952,281  
   
    Home Products – 2.8%
      1,172,688     Newell Rubbermaid, Inc.     30,290,531  
      384,650     The Clorox Co.     23,452,111  
                 
 
                  53,742,642  
   
    Hotel & Leisure – 2.2%
      583,693     Harrah’s Entertainment, Inc.     41,547,268  
   
    Information Services – 1.5%
      2,483,554     BearingPoint, Inc.*(a)     20,787,347  
      1,402,957     Unisys Corp.*     8,810,570  
                 
 
                  29,597,917  
   
    Life Insurance – 2.1%
      221,381     Assurant, Inc.     10,714,840  
      342,374     Lincoln National Corp.     19,323,589  
      172,804     Torchmark Corp.     10,492,659  
                 
 
                  40,531,088  
   
    Media – 0.9%
      331,785     Lamar Advertising Co.*     17,869,940  
   
    Medical Products – 0.2%
      170,157     PerkinElmer, Inc.     3,556,281  
   
    Medical Providers – 0.5%
      550,902     Apria Healthcare Group, Inc.*     10,412,048  
   
    Mining – 1.6%
      174,904     Allegheny Technologies, Inc.     12,110,353  
      697,792     Commercial Metals Co.     17,933,254  
                 
 
                  30,043,607  
   
    Motor Vehicle – 0.7%
      220,966     Autoliv, Inc.     12,500,047  
   
 
The accompanying notes are an integral part of these financial statements.

4

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Oil & Refining – 3.1%
      2,170,564     Range Resources Corp.   $ 59,017,635  
   
    Oil Services – 1.7%
      872,652     BJ Services Co.     32,515,013  
   
    Paper & Packaging – 2.9%
      539,941     MeadWestvaco Corp.     15,080,552  
      792,009     Packaging Corp. of America     17,440,038  
      681,179     Plum Creek Timber Co., Inc. (REIT)     24,181,855  
                 
 
                  56,702,445  
   
    Parts & Equipment – 2.9%
      362,506     American Standard Companies, Inc.     15,685,635  
      186,174     Carlisle Cos., Inc.     14,763,598  
      276,794     Cooper Industries Ltd.     25,719,698  
                 
 
                  56,168,931  
   
    Property Insurance – 6.2%
      570,497     AMBAC Financial Group, Inc.     46,267,307  
      267,179     Everest Re Group Ltd.     23,129,686  
      338,197     PartnerRe Ltd.     21,661,518  
      268,541     RenaissanceRe Holdings Ltd. Series B     13,013,497  
      357,533     The PMI Group, Inc.     15,938,821  
                 
 
                  120,010,829  
   
    Publishing – 0.6%
      343,311     Dow Jones & Co., Inc.(a)     12,019,318  
   
    Regionals – 5.8%
      116,700     City National Corp.     7,596,003  
      135,322     Commerce Bancshares, Inc.     6,772,866  
      114,904     FirstMerit Corp.     2,406,090  
      939,873     KeyCorp     33,534,669  
      272,905     M&T Bank Corp.     32,180,957  
      384,350     Zions Bancorp.     29,956,239  
                 
 
                  112,446,824  
   
    REITs – 8.8%
      839,246     Apartment Investment & Management Co. (REIT)     36,465,239  
      141,477     Brandywine Realty Trust     4,551,315  
      471,442     Developers Diversified Realty Corp.     24,599,843  
      915,944     Equity Office Properties Trust (REIT)(a)     33,441,115  
      317,357     Equity Residential Properties Trust     14,195,379  
      292,999     Healthcare Realty Trust, Inc.     9,332,018  
      275,829     Home Properties, Inc.(a)     15,311,268  
      607,081     iStar Financial, Inc.     22,917,308  
      215,408     Liberty Property Trust(a)     9,521,034  
                 
 
                  170,334,519  
   
    Retail Apparel – 3.4%
      694,834     J. C. Penney Co., Inc.     46,908,243  
      680,816     Ross Stores, Inc.     19,096,889  
                 
 
                  66,005,132  
   
    Semiconductors – 0.6%
      282,676     Freescale Semiconductor, Inc.*     8,197,604  
      141,200     National Semiconductor Corp.     3,367,620  
                 
 
                  11,565,224  
   
    Specialty Financials – 2.3%
      224,730     American Capital Strategies Ltd.(a)     7,523,961  
      468,791     CIT Group, Inc.     24,513,081  
      519,650     Eaton Vance Corp.     12,970,464  
                 
 
                  45,007,506  
   
    Telecom Equipment – 0.5%
      552,639     ADC Telecommunications, Inc.*     9,317,494  
   
    Telephone – 0.8%
      350,745     Embarq Corp.*     14,377,038  
   
    Thrifts – 0.8%
      1,165,425     Hudson City Bancorp, Inc.     15,535,115  
   
    Tobacco – 1.2%
      199,064     Reynolds American, Inc.(a)     22,952,079  
   
    Transports – 1.7%
      527,356     Norfolk Southern Corp.     28,065,886  
      130,119     Swift Transportation Co., Inc.*     4,132,580  
                 
 
                  32,198,466  
   
    Trust/Processors – 1.1%
      381,064     Northern Trust Corp.     21,072,839  
   
    TOTAL COMMON STOCKS
    (Cost $1,711,508,664)   $ 1,881,578,789  
   
                             
Principal Interest Maturity
Amount Rate Date Value
   
Repurchase Agreement(b) – 2.2%
    Joint Repurchase Agreement Account II
    $ 42,800,000       5.28 %   07/03/2006     $42,800,000  
    Maturity Value:  $42,818,818
    (Cost $42,800,000)        
   
    TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
    (Cost $1,754,308,664)     $1,924,378,789  
   
 
The accompanying notes are an integral part of these financial statements.

5

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Securities Lending Collateral – 3.8%
      73,272,825     Boston Global Investment Trust – Enhanced Portfolio   $ 73,272,825  
    (Cost $73,272,825)        
   
    TOTAL INVESTMENTS – 103.7%
    (Cost $1,827,581,489)   $ 1,997,651,614  
   
    LIABILITIES IN EXCESS OF OTHER
  ASSETS – (3.7)%		     (71,377,781 )
   
    NET ASSETS – 100.0%   $ 1,926,273,833  
   

  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) All or portion of security is on loan.
 
 (b) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment Information appears on page 7.
             
   
    Investment Abbreviation:
    REIT   —   Real Estate Investment Trust
   
 
The accompanying notes are an integral part of these financial statements.

6

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 

ADDITIONAL INVESTMENT INFORMATION

JOINT REPURCHASE AGREEMENT ACCOUNT II — At June 30, 2006, the Fund had an undivided interest in the following Joint Repurchase Agreement Account II which equaled $42,800,000 in principal amount.

                             
Principal Interest Maturity Maturity
Repurchase Agreements Amount Rate Date Value
Banc of America Securities LLC
  $ 2,860,000,000       5.30 %   07/03/2006   $ 2,861,263,167  
Barclays Capital PLC
    1,500,000,000       5.32     07/03/2006     1,500,665,000  
Bear Stearns
    500,000,000       5.31     07/03/2006     500,221,250  
Deutsche Bank Securities, Inc.
    1,000,000,000       5.20     07/03/2006     1,000,433,333  
Greenwich Capital Markets
    300,000,000       5.32     07/03/2006     300,133,000  
J.P. Morgan Securities, Inc.
    400,000,000       5.28     07/03/2006     400,176,000  
Merrill Lynch
    500,000,000       5.25     07/03/2006     500,218,750  
Morgan Stanley & Co.
    3,000,000,000       5.25     07/03/2006     3,001,312,500  
UBS Securities LLC
    1,050,000,000       5.25     07/03/2006     1,050,459,375  
UBS Securities LLC
    475,000,000       5.30     07/03/2006     475,209,792  
UBS Securities LLC
    400,000,000       5.34     07/03/2006     400,178,000  
Wachovia Capital Markets
    250,000,000       5.26     07/03/2006     250,109,583  
TOTAL
   $ 12,235,000,000                 $ 12,240,379,750  
    At June 30, 2006, the Joint Repurchase Agreement Account II was fully collateralized by Federal Home Loan Bank, 0.00% to 11.00%, due 07/07/2006 to 04/20/2016; Federal Home Loan Mortgage Association, 3.00% to 8.50%, due 02/01/2007 to 07/01/2036; Federal National Mortgage Association, 0.00% to 10.50%, due 02/01/2007 to 07/01/2036; and U.S. Treasury Bonds, 5.00% to 7.14%, due 11/13/2008 to 10/20/2018. The aggregate market value of the collateral, including accrued interest, was $12,492,409,737.  
 
The accompanying notes are an integral part of these financial statements.

7

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)
               
    Assets:
   
Investment in securities, at value (identified cost $1,754,308,664) — including $71,584,913 of securities on loan
  $ 1,924,378,789  
   
Securities lending collateral, at value (cost $73,272,825)
    73,272,825  
   
Cash
    161,471  
   
Receivables:
       
     
Investment securities sold
    20,112,712  
     
Dividends and interest
    2,719,964  
     
Fund shares sold
    520,233  
   
Other assets
    13,658  
   
   
Total assets
     2,021,179,652  
   
    Liabilities:
   
Payables:
       
     
Payable upon return of securities loaned
    73,272,825  
     
Investment securities purchased
    18,778,661  
     
Fund shares repurchased
    1,397,900  
     
Amounts owed to affiliates
    1,320,863  
   
Accrued expenses
    135,570  
   
   
Total liabilities
     94,905,819  
   
    Net Assets:
   
Paid-in capital
    1,617,052,397  
   
Accumulated undistributed net investment income
    10,861,388  
   
Accumulated net realized gain on investment transactions
    128,289,923  
   
Net unrealized gain on investments
    170,070,125  
   
   
NET ASSETS
   $ 1,926,273,833  
   
   
Net assets:
       
     
Institutional
  $ 1,649,513,265  
     
Service
    276,760,568  
   
   
Shares outstanding:
       
     
Institutional
    101,422,302  
     
Service
    17,023,386  
   
   
Total shares of beneficial interest outstanding, $0.001 par value (unlimited shares authorized)
    118,445,688  
   
   
Net asset value, offering and redemption price per share:
       
     
Institutional
  $ 16.26  
     
Service
  $ 16.26  
   
 
The accompanying notes are an integral part of these financial statements.

8

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 

Statement of Operations

For the Six Months Ended June 30, 2006 (Unaudited)
             
    Investment income:
   
Dividends
  $ 15,642,886  
   
Interest (including securities lending income of $23,620)
    1,484,946  
   
   
Total income
     17,127,832  
   
    Expenses:
   
Management fees
    7,382,464  
   
Transfer Agent fees
    369,128  
   
Distribution and Service fees
    345,020  
   
Custody and accounting fees
    126,525  
   
Printing fees
    89,692  
   
Professional fees
    30,762  
   
Trustee fees
    6,803  
   
Registration fees
    629  
   
Other
    17,355  
   
   
Total expenses
     8,368,378  
   
   
Less — expense reductions
    (221,802 )
   
   
Net expenses
     8,146,576  
   
   
NET INVESTMENT INCOME
     8,981,256  
   
    Realized and unrealized gain (loss) on investment transactions:
   
Net realized gain from investment transactions (including commissions recaptured of $191,658)
    109,933,139  
   
Net change in unrealized loss on investments
    (45,786,239 )
   
   
Net realized and unrealized gain on investment transactions
     64,146,900  
   
   
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 73,128,156  
   
 
The accompanying notes are an integral part of these financial statements.

9

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND

Statements of Changes in Net Assets

                       
For the
Six Months Ended For the
June 30, 2006 Year Ended
(Unaudited) December 31, 2005
    From operations:
   
Net investment income
  $ 8,981,256     $ 9,578,739  
   
Net realized gain on investment, futures and foreign currency related transactions
    109,933,139       132,448,454  
   
Payment by affiliates to reimburse certain security claims
    —       9,275  
   
Net change in unrealized gain (loss) on investments
    (45,786,239 )     493,340  
   
   
Net increase in net assets resulting from operations
     73,128,156       142,529,808  
   
    Distributions to shareholders:
   
From net investment income
               
     
Institutional Shares
    —       (7,785,943 )
     
Service Shares
    —       —  
   
From net realized gain
               
     
Institutional Shares
    —       (130,595,641 )
     
Service Shares
    —       —  
   
   
Total distributions to shareholders
     —       (138,381,584 )
   
    From share transactions:
   
Proceeds from sales of shares
    214,110,649       445,767,317  
   
Proceeds received in connection with merger
    295,311,746       —  
   
Reinvestment of dividends and distributions
    —       138,381,584  
   
Cost of shares repurchased
    (87,090,898 )     (74,634,247 )
   
   
Net increase in net assets resulting from share transactions
     422,331,497       509,514,654  
   
   
TOTAL INCREASE
     495,459,653       513,662,878  
   
    Net assets:
   
Beginning of period
    1,430,814,180       917,151,302  
   
   
End of period
  $ 1,926,273,833     $ 1,430,814,180  
   
   
Accumulated undistributed net investment income
   $ 10,861,388     $ 1,880,132  
   
 
The accompanying notes are an integral part of these financial statements.

10

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                                 
Income (loss) from Ratios assuming no
investment operations Distributions to shareholders expense reductions
Net Ratio of Ratio of Ratio of
Net asset realized From Net asset Net assets, Ratio of net investment total net investment
value, Net and Total from From net net value, end of net expenses income expenses income Portfolio
beginning investment unrealized investment investment realized Total end of Total period to average to average to average to average turnover
Year — Share Class of period income(b) gain (loss) operations income gains distributions period return(c) (in 000s) net assets net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)
    2006 — Institutional   $ 15.53     $ 0.08     $ 0.65     $ 0.73     $ —     $ —     $ —     $ 16.26       4.70 %   $ 1,649,513       0.87 %(d)     0.98 %(d)     0.87 %(d)     0.98 %(d)     25 %    
    2006 — Service(a)     15.96       0.07       0.23       0.30       —       —       —       16.26       1.88       276,761       0.97 (d)     0.88 (d)     1.12 (d)     0.73 (d)     25      
 
    For the Years ended December 31,
    2005 — Institutional     15.28       0.13       1.82       1.95       (0.10 )     (1.60 )     (1.70 )     15.53       12.83       1,430,814       0.87       0.83       0.87       0.83       53      
    2004 — Institutional     13.37       0.10       3.34       3.44       (0.09 )     (1.44 )     (1.53 )     15.28       25.88       917,151       0.88       0.67       0.88       0.67       72      
    2003 — Institutional     10.61       0.12       2.89       3.01       (0.11 )     (0.14 )     (0.25 )     13.37       28.39       577,923       0.91       1.02       0.91       1.02       64      
    2002 — Institutional     11.29       0.14       (0.67 )     (0.53 )     (0.12 )     (0.03 )     (0.15 )     10.61       (4.69 )     357,537       0.91       1.20       0.91       1.20       95      
    2001 — Institutional     10.67       0.14       1.14       1.28       (0.11 )     (0.55 )     (0.66 )     11.29       12.05       243,521       0.93       1.27       0.94       1.26       82      
   

(a)  Service Share Class commenced on January 9, 2006.
(b)  Calculated based on the average shares outstanding methodology.
(c)  Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than a full year are not annualized.
(d)  Annualized.

The accompanying notes are an integral part of these financial statements.

 
11

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND

Notes to Financial Statements

June 30, 2006 (Unaudited)

1. ORGANIZATION

Goldman Sachs Variable Insurance 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 Mid Cap Value Fund (the “Fund”). The Fund is a diversified portfolio under the Act offering two classes of shares — Institutional and Service.
     Shares of the Trust may be purchased and held by separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Trust are not offered directly to the general public.

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 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 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. Service Shares bear all expenses and fees relating to their Distribution and Service Plan.

D. Federal Taxes and Distributions to Shareholders — 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 provisions are required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gains distributions, if any, are declared and paid annually.

     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules, which may differ from generally accepted accounting principles. Therefore, the source of the Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain, or from tax return of capital.
     In addition, distributions paid by the Fund’s investments in real estate investment trusts (“REITs”) often include a “return of capital” which is recorded by the Fund as a reduction of the cost basis of the securities held. The Code requires a REIT to distribute at least 95% of its taxable income to investors. In many cases, however, because of “non-cash” expenses such as property depreciation, a REIT’s cash flow will exceed its taxable income. The REIT may distribute this excess cash to offer a more competitive yield. This portion of the distribution is deemed a return of capital and is generally not taxable to shareholders.
 
12

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 
 
2. SIGNIFICANT ACCOUNTING POLICIES (continued)

E. 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 counterparties, with a current value equal to or greater than the market value of the corresponding transactions.

F. 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.

     Pursuant to exemptive relief granted by the Securities and Exchange Commission (“SEC”) and terms and conditions contained therein, the Fund, together with other registered investment companies having management or investment advisory agreements with Goldman Sachs Asset Management, L.P. (“GSAM”), or its affiliates may transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

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 & Co. (“Goldman Sachs”), serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Fund. Under this Agreement, GSAM manages the Fund, subject to the general supervision of the Trust’s Board of Trustees.
     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAM is entitled to a fee (“Management fee”) computed daily and payable monthly, equal to an annual percentage rate of the Fund’s average daily net assets.
     The Investment Adviser has entered into a fee reduction commitment for the Fund which was implemented on a voluntary basis beginning on July 1, 2005 and on a contractual basis as of April 28, 2006 to achieve the rates listed below:
         
Average Daily Net Assets Annual Rate
First $2 Billion
    0.80 %
Over $2 Billion
    0.72 %

     In connection with the reorganization of the Allmerica Select Value Opportunity Fund into the Fund, GSAM has contractually agreed to reimburse the Fund as necessary to limit the total annual operating expenses of the Services Shares of the Fund to 0.99% until June 2007.

     GSAM has voluntarily agreed to limit certain “Other Expenses” of the Fund (excluding Management fees, Transfer Agency fees and expenses, taxes, interest, brokerage fees and litigation, indemnification costs, shareholder meeting and other extraordinary expenses exclusive of any expense offset arrangements) to the extent that such expenses exceed, on an annual basis, 0.054% of the average daily net assets of the Fund. Prior to January 9, 2006, the Other Expense limitation for the Fund was 0.25%. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Fund is not obligated to reimburse GSAM for prior fiscal year expense reimbursements, if any. For the six months ended June 30, 2006, GSAM made no reimbursements to the Fund.
 
13

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND
 
3. AGREEMENTS (continued)
     In addition, the Fund has entered into certain offset arrangements with the custodian resulting in a reduction in the Fund’s expenses. For the six months ended June 30, 2006, custody fees were reduced by approximately $16,000.
     Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly equal to an annual rate of 0.04% of the average daily net assets of the Fund. Goldman Sachs serves as the Distributor of the Fund’s shares at no cost to the Fund.
     The Trust has adopted, on behalf of Service Shares of the Fund, a Distribution and Service plan (the “Plan”). Under the Plan, Goldman Sachs is entitled to a monthly fee for distribution services equal to, on an annual basis, 0.25% of the Fund’s average daily net assets attributable to Service Shares. GSAM has voluntarily agreed to waive Distribution and Service fees for Service Shares so as not to exceed 0.10% for the Fund. This waiver may be modified or terminated at any time at the option of Goldman Sachs. For the six months ended June 30, 2006, GSAM waived $206,237 in Distribution and Service fees for the Fund.
     At June 30, 2006, the amounts owed to affiliates were approximately $1,237,000, $22,000 and $62,000 for Management, Distribution and Service and Transfer Agent fees, respectively.

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long term securities for the six months ended June 30, 2006, were $864,946,678 and $698,789,807, respectively. For the six months ended June 30, 2006, Goldman Sachs earned approximately $38,000 of brokerage commissions from portfolio transactions executed on behalf of the Fund.

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. 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 Fund 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.
     Both the Fund and BGA receive compensation relating to the lending of the Fund’s securities. The amount earned by the Fund for the six months ended June 30, 2006, is reported parenthetically under Investment Income on the Statement of Operations. A portion of this amount, $1,354, represents compensation earned by the Fund from lending its securities to Goldman Sachs. For the six months ended June 30, 2006, BGA earned approximately $4,900 in fees as securities lending agent. At June 30, 2006, the Fund loaned securities having a market value of $71,584,913 collateralized by cash in the amount of $73,272,825. The amount payable to Goldman Sachs upon return of securities loaned as of June 30, 2006 was $2,294,750. The Fund invests the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by GSAM, for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Fund bears the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.

6. LINE OF CREDIT FACILITY

The Fund participates in a $400,000,000 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
 
14

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 
 
6. LINE OF CREDIT FACILITY (continued)
arrangement, the Fund must own securities having a market value in excess of 300% of the 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. This 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 June 30, 2006, the Fund did not have any borrowings under this facility.

7. TAX INFORMATION

As of the Fund’s most recent fiscal year end, December 31, 2005, the Fund had certain timing differences on a tax basis of $186,497 related to the recognition of certain REIT dividends for tax purposes.
     At June 30, 2006, the Fund’s aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes were as follows:
         
Tax cost
  $ 1,828,269,468  
Gross unrealized gain
    208,074,318  
Gross unrealized loss
    (38,692,172 )
Net unrealized security gain
  $ 169,382,146  

     The difference between book-basis and tax basis unrealized gains (losses) is attributable primarily to wash sales and return of capital distributions from underlying fund investments.

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 the Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds and the Trustees and Officers of the Goldman Sachs 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 and the Trustees and Officers of the Trust. The Fund, along with 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 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.

     Based on currently available information, GSAM and GSAMI believe that the likelihood that the pending purported class action and derivative action lawsuit will have a material adverse financial impact on the Fund is remote, and the pending action is not likely to materially affect its ability to provide investment management services to its clients, including the Goldman Sachs Funds.
 
15

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND

8. OTHER MATTERS (continued)

Mergers and Reorganizations — At a meeting held on July 12, 2005, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization (the “Agreement”) providing for the tax-free acquisition of the Allmerica Investment Trust Select Value Opportunity Fund by the Goldman Sachs VIT Mid Cap Value Fund. Following the approval of the Board of Trustees and shareholders of the Allmerica Investment Trust Select Value Opportunity Fund, the acquisition was completed on January 9, 2006.

     Pursuant to the Agreement, the assets and liabilities of the Allmerica Investment Trust Select Value Opportunity Fund Service Class were transferred into the Goldman Sachs VIT Mid Cap Value Fund Service Class in a tax-free exchange as follows:

                         
Acquired Fund’s
Exchanged Shares Value of Shares Outstanding
Survivor/Acquired Fund of Survivor Issued Exchanged Shares on January 6, 2006
Goldman Sachs VIT Mid Cap Value Fund Service Class/ Allmerica Investment Trust Select Value Opportunity Fund Service Class
    18,503,242     $ 295,311,746       179,590,581  

     The following chart shows the Survivor Fund’s and Acquired Fund’s aggregate net assets (immediately before and after the completion of the acquisition) and the Acquired Fund’s unrealized appreciation.

                                 
Survivor Fund’s
Survivor Fund’s Acquired Fund’s Aggregate Net
Aggregate Net Aggregate Net Acquired Fund’s Assets
Assets before Assets before Unrealized immediately
Survivor/Acquired Fund acquisition acquisition Appreciation after acquisition
Goldman Sachs VIT Mid Cap Value/ Allmerica Investment Trust Select Value Opportunity Fund
  $ 1,475,213,407     $ 295,311,746     $ 43,643,427     $ 1,770,525,153  

New Accounting Pronouncement — On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

 
16

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 

9. SUMMARY OF SHARE TRANSACTIONS

Share activity is as follows:
                                 
For the Six Months Ended For the Year Ended
June 30, 2006 December 31, 2005
Shares Dollars Shares Dollars
Institutional Shares
                                
Shares sold
    12,459,809     $ 201,912,141       27,827,100     $ 445,767,317  
Reinvestment of dividends and distributions
    —       —       8,956,843       138,381,584  
Shares repurchased
    (3,158,678 )     (50,889,732 )     (4,668,033 )     (74,634,247 )
      9,301,131       151,022,409       32,115,910       509,514,654  
Service Shares*
                                
Shares sold
    771,611       12,198,508       —       —  
Shares issued in connection with merger
    18,503,242       295,311,746       —       —  
Reinvestment of dividends and distributions
    —       —       —       —  
Shares repurchased
    (2,251,467 )     (36,201,166 )     —       —  
      17,023,386       271,309,088       —       —  
NET INCREASE
     26,324,517     $ 422,331,497       32,115,910     $ 509,514,654  

*  Service Share Class commenced on January 9, 2006.

 
17

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND

Statement Regarding Basis for Approval of Management Agreement (Unaudited)

     The Trustees oversee the management of Goldman Sachs Variable Insurance Trust (the “Trust”), and review the investment performance and expenses of the investment fund covered by this Report (the “Fund”) at regularly scheduled meetings held during the Fund’s fiscal year. In addition, the Trustees determine annually whether to approve and continue the Trust’s investment management agreement (the “Management Agreement”) with Goldman Sachs Asset Management, L.P. (the “Investment Adviser”) for the Fund.

     The Management Agreement was most recently approved by the Trustees, including all of the Trustees who are not parties to the Management Agreement or “interested persons” (as defined in the Investment Company Act of 1940, as amended) of any party thereto (the “Independent Trustees”), on June 15, 2006 (the “Annual Contract Meeting”).

     To assist the Trustees in their deliberations at the Annual Contract Meeting, and in addition to the reviews of the Fund’s investment performance, expenses and other matters at regularly scheduled Board meetings, the Trustees have a Contract Review Committee (the “Committee”) whose members include all of the Independent Trustees. The Committee held meetings on December 15, 2005, February 8, 2006 and May 10, 2006. At these Committee meetings, the Independent Trustees considered matters relating to the Management Agreement including: (a) the Fund’s investment performance; (b) the Fund’s management fee arrangements; (c) the Investment Adviser’s undertaking to reimburse certain expenses of the Fund that exceed a specified level; (d) the Investment Adviser’s potential economies of scale and the breakpoint for the fees payable by the Fund under the Management Agreement; (e) the relative expense level of the Fund; (f) the Investment Adviser’s profitability with respect to the Trust and the Fund; (g) information on the advisory fees charged by the Investment Adviser to institutional accounts; (h) the quality of the non-advisory services provided to the Fund; (i) the statutory and regulatory requirements applicable to the approval and continuation of mutual fund investment management agreements; (j) an evaluation of Trustees’ the contract review process provided by an outside third party; and (k) information on the processes followed by the third party mutual fund data provider engaged as part of the Trustees’ contract review (the “Outside Data Provider”) in producing investment performance and expense comparisons for the Fund.

     At the Annual Contract Meeting, the Trustees reviewed the matters that were considered at the Committee meetings and also considered additional matters including: (a) a summary of fee concessions by the Investment Adviser and its affiliates with respect to the Goldman Sachs mutual funds since 2003; (b) the quality of the Investment Adviser’s services; (c) the structure, staff and capabilities of the Investment Adviser and its portfolio management team; (d) the groups within the Investment Adviser that support the portfolio management team, including the legal and compliance departments, the valuation oversight group, the risk and performance analytics group, the business planning team and the technology group; (e) the Investment Adviser’s business continuity and disaster recovery planning; (f) the Investment Adviser’s financial resources and its ability to hire and retain talented personnel; (g) the fees received by the Investment Adviser’s affiliates from the Fund for transfer agency, securities lending, distribution, portfolio brokerage and other services; (h) the terms of the Management Agreement; (i) the administrative services provided under the Management Agreement, including the nature and extent of the Investment Adviser’s oversight of the Fund’s other service providers, including the custodian and fund accounting agent; and (j) the Investment Adviser’s policies addressing various potential conflicts of interest. At the Annual Contract Meeting, the Trustees also considered at further length the Fund’s investment performance, fees and expenses, including the Fund’s expense trends over time and the breakpoint in the contractual fee rate under the Management Agreement approved in 2005.

     In connection with the Committee meetings and the Annual Contract Meeting, the Trustees received written materials and oral presentations on the topics covered, and were advised by their independent legal counsel regarding their responsibilities under applicable law. Also, in conjunction with these meetings, the Trustees attended other sessions at which the Trustees reviewed the commission rates paid by the Fund on brokerage transactions, the Investment Adviser’s receipt of research services in connection with those transactions, and the payment of Rule 12b-1 distribution and service fees that are payable by the Fund on its Service Share Class. Information was also provided to the Trustees relating to the Fund’s portfolio turnover, revenue sharing by the Investment Adviser, portfolio manager compensation, the alignment of the interests of the Fund and the portfolio managers, the number and types of accounts managed by the portfolio managers, and other matters. During the course of their deliberations, the Independent Trustees met in executive sessions without employees of the Investment Adviser present.

 
18

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 
 
Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)

     The presentations made at the Contract Review Committee meetings and the Annual Contract Meeting encompassed the Fund and other mutual fund portfolios for which the Board of Trustees has responsibility. While the management agreements for the Fund and these other mutual fund portfolios were approved at the same Annual Contract Meeting, the Trustees considered the Management Agreement as it applied to the Fund separately.

     In evaluating the Management Agreement at the Annual Contract Meeting, the Trustees relied upon their knowledge, resulting from their meetings and other interactions throughout the year, of the Investment Adviser, its services and the Fund. At those meetings the Trustees received materials relating to the Investment Adviser’s investment management and other services under the Management Agreement, including: (a) information on the investment performance of the Fund in comparison to other mutual funds and benchmark performance indices; (b) general investment outlooks in the markets in which the Fund invests; (c) compliance reports; and (d) expenses borne by the Fund. In addition, the Trustees were provided with disclosure materials regarding the Goldman Sachs mutual funds and their expenses that are provided to investors who invest in the funds, as well as information on the Goldman Sachs mutual funds’ competitive universe and discussed the broad range of other investment choices that are available to those investors.

     In connection with their approval of the Management Agreement, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. As part of their review, the Trustees considered the nature, extent and quality of the services provided by the Investment Adviser. In this regard, the Trustees considered both the investment advisory services, and the other, non-advisory services, that are provided to the Fund by the Investment Adviser and its affiliates. These services include services as the Fund’s transfer agent, securities lending agent and distributor. In addition, affiliates of the Investment Adviser receive compensation in connection with the execution of the Fund’s portfolio securities transactions. The Trustees concluded that the Investment Adviser was both able to commit substantial financial and other resources to the operations of the Fund and had, in fact, continued to commit those resources in multiple areas including portfolio management, trading, technology, human resources, tax, treasury, legal, compliance, vendor oversight and risk management. The Trustees also believed that the Investment Adviser had made significant commitments to address regulatory compliance requirements applicable to the Fund and the Investment Adviser, including education and training initiatives.

     The Trustees also considered the investment performance of the Fund and the Investment Adviser. In this regard, the Trustees compared the investment performance of the Fund to the performance of other SEC-registered funds and to rankings and ratings issued by the Outside Data Provider. The Trustees also reviewed the Fund’s investment performance relative to its performance benchmark. This information on the Fund’s investment performance was provided for one, three and five year periods. In addition, the Trustees considered the investment performance trends of the Fund over time, and reviewed the investment performance of the Fund in light of its investment objective and policies, as well as in light of periodic analyses of its quality and risk profile. In addition, the Trustees considered whether the Fund had operated within its investment policies, and its record of compliance with its investment limitations. The Trustees believed that the Fund was providing investment performance within a competitive range for long-term investors.

     The Board of Trustees also considered the contractual fee rate payable by the Fund under the Management Agreement. In this regard, the Trustees considered information on the services rendered by the Investment Adviser to the Fund, which included both advisory and administrative services that were directed to the needs and operations of the Fund as a registered mutual fund. They also considered information that indicated that these mutual fund services differed in various significant respects from the services provided to the Investment Adviser’s institutional accounts, which generally paid lower fees. In addition, the fees paid by the Fund and the Fund’s total operating expense ratios (before and after expense reimbursements) were compared to similar information for mutual funds advised by other, unaffiliated investment management firms. Most of the comparisons of the Fund’s fee rates and total operating expense ratios were prepared by the Outside Data Provider.

     More particularly, the Trustees reviewed analyses prepared by the Outside Data Provider of the expense rankings of the Fund. The analyses provided a comparison of the Fund’s management fee rates to a relevant peer group and a category universe; an expense analysis which compared the Fund’s expenses to a peer group and a category universe; and a five-year history comparing the Fund’s expenses to the category average. The analyses also compared the Fund’s transfer agency fees, custody and accounting fees and other expenses to a peer group and median. The Trustees believed that the comparisons provided by the Outside Data Provider were useful in evaluating the reasonableness of the management fees paid by the Fund.

 
19

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND
 
Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)

In addition, the Trustees considered the Investment Adviser’s voluntary undertaking to limit the Fund’s total expense ratio (excluding certain expenses) to a specified level. This voluntary undertaking is in addition to the Investment Adviser’s separate contractual agreement to reimburse the Fund as necessary to limit the total annual operating expenses of the Service Shares of the Fund to a specified level until June 2007.

     The Board of Trustees also considered the breakpoint in the contractual fee rate under the Management Agreement for the Fund that was approved in 2005, which had been implemented at the following annual percentage of the average daily net assets of the Fund:

0.80% on the first $2 billion and 0.72% over $2 billion.

     In approving this new fee breakpoint, the Trustees had reviewed information regarding the Investment Adviser’s potential economies of scale, and whether the Fund and its shareholders were participating in the benefits of these economies. In this regard, the Trustees considered the amount of assets in the Fund; the information provided by the Investment Adviser relating to the costs of the services provided by the Investment Adviser and its affiliates and the profits realized by them; and information comparing fee rates charged by the Investment Adviser with fee rates charged by other, unaffiliated investment managers to other mutual funds. Upon reviewing these matters again at the Annual Contract Meeting in 2006, the Trustees continued to believe that the fee breakpoint was a way to ensure that benefits of scalability would be passed along to shareholders at the specified asset level.

     The Trustees also considered the other benefits derived by the Investment Adviser and its affiliates from the Fund as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services, and the brokerage and research services received by the Investment Adviser in connection with the placement of brokerage transactions for the Fund. In this regard, the Trustees noted that the Investment Adviser had adopted a policy to cease obtaining third party non-broker research based on the Fund’s brokerage transactions. They also noted that during the past year the Fund had created a new share class, Service Shares, with a distribution and service plan under which an affiliate of the Investment Adviser would receive fees.

     In addition, the Trustees reviewed the Investment Adviser’s pre-tax revenues and pre-tax margins with respect to the Trust and the Fund. In this regard the Trustees reviewed, among other things, profitability analyses and summaries, revenue and expense schedules, and expense allocation methodologies, as well as a report of independent accountants regarding the results of certain agreed-upon procedures to verify expense allocation calculations that were designed to assist the Trustees in their evaluation of the Investment Adviser’s schedules of revenues and expenses. The Trustees considered the Investment Adviser’s revenues and margins both in absolute terms and in comparison to the information on the reported margins earned by other asset management firms.

     After deliberation and consideration of the information provided, including the factors described above, the Trustees concluded that the management fees paid by the Fund were reasonable in light of the services provided by the Investment Adviser, its costs and the Fund’s current and reasonably foreseeable asset levels, and that the Management Agreement should be approved and continued.

 
20

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MID CAP VALUE FUND 

Fund Expenses (Unaudited) — Six Month Period Ended June 30, 2006

            As a shareholder of Institutional and Service Shares of the Fund, you incur ongoing costs, including management fees; distribution and service (12b-1) fees (with respect to Service Shares); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in Institutional Shares 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 January 1, 2006 through June 30, 2006.  
 
            Actual Expenses — The first line under each share class of 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 of 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 5% per year before expenses, which is not the Fund’s actual return. 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. As a shareholder of the Fund, you do not incur any transaction costs, such as sales charges (loads), redemption fees, or exchange fees, but shareholders of other funds may incur such costs. 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 whose shareholders may incur transaction costs.  

                         
Expenses Paid
for the
Beginning Ending 6 months
Account Value Account Value ended
1/1/06 6/30/06 6/30/06*
Institutional
                        
Actual
  $ 1,000     $ 1,047.00     $ 4.42  
Hypothetical 5% return
    1,000       1,020.48 +     4.36  
Service#
                        
Actual
  $ 1,000     $ 1,018.80     $ 4.59  
Hypothetical 5% return
    1,000       1,018.88 +     4.59  

  *   Expenses 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 June 30, 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 fiscal year. The annualized expense ratios for the period were 0.87% and 0.97% for Institutional and Service Shares, respectively.  
  #   Service Share Class commenced on January 9, 2006. The Beginning Account Value is as of January 9, 2006.  
  +  Hypothetical expenses are based on the Fund’s actual annualized expense ratios and an assumed rate of return of 5% per year before expenses.  

 
21

 

     
TRUSTEES
  OFFICERS
Ashok N. Bakhru, Chairman
   Kaysie P. Uniacke, President
John P. Coblentz, Jr.
  James A. Fitzpatrick, Vice President
Patrick T. Harker
  James A. McNamara, Vice President
Mary Patterson McPherson
  John M. Perlowski, Treasurer
Alan A. Shuch
  Peter V. Bonanno, Secretary
Wilma J. Smelcer
   
Richard P. Strubel
   
Kaysie P. Uniacke
   
 
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent 		   
 
GOLDMAN SACHS ASSET MANAGEMENT, L.P.
Investment Adviser
 
Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.
 
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 the 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 September 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 1-800-621-2550.
 
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.
 
Holdings and allocations shown 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.
 
    Toll Free (in U.S.): 800-292-4726
 
This report is prepared for the general information of contract owners and is not an offer of shares of the Goldman Sachs Variable Insurance Trust: Mid Cap Value Fund.
 
 Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: August 18, 2006
 
VITMIDCAPSAR/06-1202/08-06/28.7K    

 

Goldman
Sachs Variable Insurance Trust

GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, NEW YORK, NEW YORK 10005

 
International Equity Fund
 
Semiannual Report
June 30, 2006
 

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — International Equity Fund during the six-month reporting period that ended June 30, 2006.

Market Overview

During the six-month reporting period, the international equity markets faced the steadily rising headwinds of continued strength in the euro and ongoing dollar weakness, steadily rising U.S. interest rates, fears of a slowdown in global economic growth, worries about Iran and the impact of high oil prices, and concerns about increasing inflationary pressures. Following very strong performance in the first four months of this year, higher-than-expected U.S. inflation data caused a spike in volatility in May. Stocks that had experienced large gains earlier in the year and those perceived to be higher risk were the first to suffer as the market saw a flight to quality and as investors shifted from equities into bonds. Commodity prices reached record highs at the start of the month, but these gains were quickly erased as prices retracted amid the correction in equity markets. In June, most international equity markets stabilized, with lower volatility and low trading volumes, but the month was still dominated by U.S. economic data and the likelihood of another U.S. interest rate hike. However, underlying corporate fundamentals remained strong with continued corporate earnings upgrades.

Investment Objective

The Fund seeks long-term capital appreciation.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006*
                 
% of
Holding Net Assets Line of Business Country
Amvescap PLC
    4.0 %   Diversified Financials   United Kingdom
E. ON AG
    3.8     Electric Utilities   Germany
GlaxoSmithKline PLC
    3.6     Pharmaceuticals   United Kingdom
Millea Holdings, Inc.
    3.6     Insurance   Japan
Vinci SA
    3.3     Construction & Engineering   France
Prudential PLC
    3.3     Insurance   United Kingdom
Esprit Holdings Ltd.
    3.0     Specialty Retail   Hong Kong
Total SA
    3.0     Oil & Gas   France
Novartis AG
    3.0     Pharmaceuticals   Switzerland
Taiheiyo Cement Corp.
    2.9     Construction Materials   Japan

* Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

 
1

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND
 
Shareholder Letter (continued)

Performance Review

Over the six-month period that ended June 30, 2006, the Fund’s Institutional Shares generated a cumulative total return of 5.56%. This return compares to the 10.50% cumulative total return of the Fund’s benchmark, the Morgan Stanley Capital International (“MSCI”) Europe, Australasia and Far East (“EAFE”) Index (unhedged, with dividends reinvested), over the same time period. For the period from the inception of the Service Class on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of 0.08%. This return compares to the 5.26% cumulative total return of the Fund’s benchmark over the same time period.

During the six-month period, the Fund’s underperformance was driven primarily by weak stock selection, particularly within the Consumer Discretionary, Materials, and Telecommunication Services sectors. This was partially offset by strong stock selection within the Healthcare sector.

Techtronic Industries Co. Ltd. was a leading detractor from performance during the period. The company issued a profit warning following lower sales, higher restructuring and financing charges, and a sharp drop in sales when key customer Home Depot unilaterally changed its inventory holding period from 36 to 18 weeks. This prompted earnings downgrades from several analysts. Its shares also fell along with the Hang Seng Index, amid continued concerns that further measures to slow China’s economy may hurt Techtronic’s earnings growth. We continue to like the company as a result of its transformation from a pure original equipment manufacturer (OEM) to a manufacturer of world-class branded power tools and home appliances through timely acquisitions over the last few years. The company has also been increasing market share through growth into different segments of the market and is a beneficiary of the global outsourcing trend to Asia.

Carnival Corp., the world’s largest cruise line operator, also detracted from performance after the company issued a profit warning. Management lowered its guidance for 2006, citing negative consumer sentiment towards cruising as a result of hurricanes and a weakening low-income U.S. consumer. With the increase in oil prices, Carnival’s energy costs have grown over 50% in the past year. Carnival has been able to manage this cost through its pricing power, by passing its higher costs on to the consumer. We are concerned that, with strains on consumers due to high gas prices, Carnival will not have the pricing power it once had. In addition, the company has been increasing its capacity at a time when demand for cruises is declining. We sold out of the position as we believe there is further downside risk to its earnings going forward.

Schering-Plough Corp, the global pharmaceutical company, was the leading contributor to performance during the period after receiving two takeover bids. First, German pharmaceutical company Merck initially made an offer for Schering, but the bid was rejected by Schering’s management. Drug and chemical giant, Bayer, then stepped in with a higher bid and this was subsequently raised even further in order to win over Schering’s management. Schering’s largest shareholder, Alliance AG, indicated it will accept the offer and in the absence of Merck raising its bid or another suitor appearing, the deal is likely to be completed. The combined group will become the world’s twelfth-largest pharmaceutical company. We sold the Fund’s position during the period to capture profits.

 
2

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 

Credit Agricole SA, France’s leading retail bank and life insurer, also contributed to performance after its business plan was well received by investors. In its domestic market, Credit Agricole seeks to improve the efficiency of its retail networks and increase cross-selling of its insurance products. Outside France, the company plans to invest €5 billion in small acquisitions of retail networks to increase its distribution power. The market reacted well to Credit Agricole’s proposed acquisition strategy.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs International Equity Portfolio Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) International Equity Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT International Equity Fund invests in equity investments in companies that are organized outside the United States or whose securities are principally traded outside the United States 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. Foreign and emerging market securities may be more volatile than investments 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.

 
3

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 99.9%
    Australia – 2.5%
      1,871,167     Alumina Ltd. (Metals & Mining)   $ 9,385,605  
   
    Austria – 2.5%
      161,788     Erste Bank der oesterreichischen Sparkassen AG* (Banks)     9,095,343  
   
    France – 12.7%
      265,248     Credit Agricole SA (Banks)     10,066,162  
      371,107     France Telecom SA (Diversified Telecommunication Services)     7,918,319  
      100,304     Technip SA (Energy Equipment & Services)     5,526,732  
      166,608     Total SA*(a) (Oil & Gas)     10,944,777  
      118,145     Vinci SA (Construction & Engineering)     12,149,423  
                 
 
                  46,605,413  
   
    Germany – 3.7%
      120,194     E.ON AG (Electric Utilities)     13,816,400  
   
    Hong Kong – 6.0%
      1,357,500     Esprit Holdings Ltd. (Specialty Retail)     11,112,461  
      10,966,000     PICC Property and Casualty Co. Ltd. Class H (Insurance)     4,033,663  
      5,206,000     Techtronic Industries Co. Ltd. (Machinery)     7,042,394  
                 
 
                  22,188,518  
   
    Italy – 2.4%
      202,014     Fastweb* (Diversified Telecommunication Services)     8,771,926  
   
    Japan – 20.7%
      234,500     Alpen Co. Ltd. (Private Placement)     7,643,175  
      224,200     Credit Saison Co. Ltd. (Diversified Financials)     10,622,820  
      871,000     Hitachi Metals Ltd. (Metals & Mining)     8,577,168  
      708     Millea Holdings, Inc. (Insurance)     13,179,366  
      530,800     Nomura Holdings, Inc. (Diversified Financials)     9,968,671  
      147,100     Shin-Etsu Chemical Co. Ltd. (Chemicals)     8,000,857  
      2,933,000     Taiheiyo Cement Corp. (Construction Materials)     10,824,381  
      148,300     Union Tool Co. (Machinery)     7,510,908  
                 
 
                  76,327,346  
   
    Netherlands – 5.1%
      246,499     ING Groep NV (Diversified Financials)     9,676,945  
      252,822     TNT NV (Air Freight & Couriers)     9,045,445  
                 
 
                  18,722,390  
   
    Russia – 3.4%
      13,786     LUKOIL ADR* (Oil & Gas)     1,146,995  
      89,064     LUKOIL ADR* (Oil & Gas)     7,375,809  
      133,200     Mobile Telesystems ADR (Wireless Telecommunication Services)     3,921,408  
                 
 
                  12,444,212  
   
    South Korea – 6.0%
      24,734     Hyundai Motor Co. GDR(a)(b) (Private Placement)     1,051,195  
      227,129     Hyundai Motor Co. Ltd. GDR(b) (Industrial Conglomerates)     9,652,983  
      300     Samsung Electronics Co. Ltd. GDR(b) (Electronic Equipment & Instruments)     94,161  
      18,460     Samsung Electronics Co. Ltd. GDR(b) (Semiconductor Equipment & Products)     5,801,055  
      21,900     Samsung Electronics Co. Ltd. GDR – Preferred Shares(b) (Electronic Equipment & Instruments)     5,327,175  
                 
 
                  21,926,569  
   
    Spain – 2.7%
      483,808     Banco Bilbao Vizcaya Argentaria SA (Banks)     9,955,448  
   
    Sweden – 2.7%
      238,020     Svenska Cellulosa AB (SCA) Series B (Paper & Forest Products)     9,826,849  
   
    Switzerland – 8.5%
      147,689     Credit Suisse Group (Banks)     8,239,878  
      10,654     Nestle SA (Food Products)     3,340,141  
      202,075     Novartis AG (Pharmaceuticals)     10,905,274  
      12,726     Serono SA (Biotechnology)     8,759,242  
                 
 
                  31,244,535  
   
    Taiwan – 1.4%
      423,407     Hon Hai Precision Industry Co. Ltd. GDR (Electronic Equipment & Instruments)     5,131,694  
   
    United Kingdom – 19.6%
      1,604,595     Amvescap PLC (Diversified Financials)     14,679,854  
      1,369,453     Bodycote International PLC (Machinery)     6,422,223  
      902,278     Catlin Group Ltd. (Insurance)     7,168,805  
      477,702     GlaxoSmithKline PLC (Pharmaceuticals)     13,331,220  
      1,072,502     Prudential PLC (Insurance)     12,127,717  
                     
   
 
The accompanying notes are an integral part of these financial statements.

4

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    United Kingdom – (continued)
      4,862,204     Vodafone Group PLC (Wireless Telecommunication Services)   $ 10,348,424  
      2,265,977     W.M. Supermarkets PLC (Food & Drug Retailing)     8,140,536  
                 
 
                  72,218,779  
   
    TOTAL COMMON STOCKS
    (Cost $345,081,296)   $ 367,661,027  
   
    TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
    (Cost $345,081,296)   $ 367,661,027  
   
   
Securities Lending Collateral – 1.5%
      5,349,325     Boston Global Investment Trust – Enhanced Portfolio        
    (Cost $5,349,325)   $ 5,349,325  
   
    TOTAL INVESTMENTS – 101.4%
    (Cost $350,430,621)   $ 373,010,352  
   
    LIABILITIES IN EXCESS OF OTHER
  ASSETS – (1.4)%		     (5,317,427 )
   
    NET ASSETS – 100.0%   $ 367,692,925  
   
             
As a % of
Net Assets
   
Industry Classifications†
    Air Freight & Couriers     2.5 %
    Banks     10.2  
    Biotechnology     2.4  
    Chemicals     2.2  
    Construction & Engineering     3.3  
    Construction Materials     2.9  
    Diversified Financials     12.2  
    Diversified Telecommunication Services     4.5  
    Electric Utilities     3.7  
    Electronic Equipment & Instruments     2.9  
    Energy Equipment & Services     1.5  
    Food & Drug Retailing     2.2  
    Food Products     0.9  
    Industrial Conglomerates     2.6  
    Insurance     9.9  
    Machinery     5.7  
    Metals & Mining     4.9  
    Oil & Gas     5.3  
    Paper & Forest Products     2.7  
    Pharmaceuticals     6.6  
    Private Placement     2.4  
    Semiconductor Equipment & Products     1.6  
    Short-term Investments#     1.4  
    Specialty Retail     3.0  
    Wireless Telecommunication Services     3.9  
   
    TOTAL INVESTMENTS     101.4 %
   

  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) All or portion of security is on loan.
 
 (b) Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Under procedures approved by the Board of Trustees, such securities have been determined to be liquid by the Investment Adviser and may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounts to $21,926,569, which represents approximately 6.0% of net assets as of June 30, 2006.
 
 † Industry concentrations greater than one-tenth of one percent are disclosed.
 
 # Short-term investments include securities lending collateral.
             
   
    Investment Abbreviations:
    ADR   —   American Depositary Receipt
    GDR   —   Global Depositary Receipt
   
 
 
The accompanying notes are an integral part of these financial statements.

5

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

Statement of Assets and Liabilities

June 30, 2006 (Unaudited)
               
 
    Assets:
   
Investment in securities, at value (identified cost $345,081,296) — including $5,092,644 of securities on loan
  $ 367,661,027  
   
Securities lending collateral, at value (cost $5,349,325)
    5,349,325  
   
Foreign currencies, at value (identified cost $215,619)
    218,639  
   
Receivables:
       
     
Dividends and interest
    926,294  
     
Fund shares sold
    20,873  
     
Securities lending income
    10,118  
   
Other assets
    1,539  
   
   
Total assets
     374,187,815  
   
    Liabilities:
   
Due to custodian
    485,766  
   
Payables:
       
     
Payable upon return of securities loaned
    5,349,325  
     
Amounts owed to affiliates
    311,366  
     
Fund shares repurchased
    261,119  
   
Accrued expenses
    87,314  
   
   
Total liabilities
     6,494,890  
   
    Net Assets:
   
Paid-in capital
    308,735,557  
   
Accumulated undistributed net investment income
    4,081,855  
   
Accumulated net realized gain on investment and foreign currency related transactions
    32,292,973  
   
Net unrealized gain on investments and translation of assets and liabilities denominated in foreign currencies
    22,582,540  
   
   
NET ASSETS
     367,692,925  
   
   
Net assets:
       
     
Institutional
  $ 114,488,789  
     
Service
    253,204,136  
   
   
Shares outstanding:
       
     
Institutional
    8,998,212  
     
Service
    19,903,201  
   
   
Total shares of beneficial interest outstanding, $0.001 par value (unlimited shares authorized)
    28,901,413  
   
   
Net asset value, offering and redemption price per share:
       
     
Institutional
  $ 12.72  
     
Service
  $ 12.72  
   
 
The accompanying notes are an integral part of these financial statements.

6

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 

Statement of Operations

For the Six Months Ended June 30, 2006 (Unaudited)
               
    Investment income:
   
Dividends(a)
  $ 5,889,212  
   
Interest (including securities lending income of $311,530)
    364,337  
   
   
Total income
     6,253,549  
   
    Expenses:
   
Management fees
    1,888,355  
   
Distribution and Service fees
    325,153  
   
Transfer agent fees
    75,534  
   
Custody and accounting fees
    111,627  
   
Printing fees
    51,177  
   
Professional fees
    31,879  
   
Trustee fees
    6,803  
   
Registration fees
    624  
   
   
Total expenses
     2,491,152  
   
   
Less — expense reductions
    (319,458 )
   
   
Net expenses
     2,171,694  
   
   
NET INVESTMENT INCOME
     4,081,855  
   
    Realized and unrealized gain (loss) on investment and foreign currency transactions:
   
Net realized gain (loss) from:
       
     
Investment transactions
    76,096,065  
     
Foreign currency related transactions
    (83,653 )
   
Net change in unrealized gain (loss) on:
       
     
Investments
    (73,070,165 )
     
Translation of assets and liabilities denominated in foreign currencies
    3,995  
   
   
Net realized and unrealized gain on investment and foreign currency transactions
     2,946,242  
   
   
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
   $ 7,028,097  
   

(a)  Foreign taxes withheld on dividends were $648,782.

 
The accompanying notes are an integral part of these financial statements.

7

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

Statements of Changes in Net Assets

                       
For the
Six Months Ended For the
June 30, 2006 Year Ended
(Unaudited) December 31, 2005
    From operations:
   
Net investment income
  $ 4,081,855     $ 837,993  
   
Net realized gain on investment and foreign currency related transactions
    76,012,412       10,843,633  
   
Net change in unrealized gain (loss) on investments and translation of assets and liabilities denominated in foreign currencies
    (73,066,170 )     1,862,289  
   
   
Net increase in net assets resulting from operations
     7,028,097       13,543,915  
   
    Distributions to shareholders:
   
From net investment income
               
     
Institutional Shares
    —       (326,535 )
     
Service Shares
    —       —  
   
   
Total distributions to shareholders
     —       (326,535 )
   
    From share transactions:
   
Proceeds from sales of shares
    5,744,532       7,590,092  
   
Proceeds received in connection with merger
    301,195,995       —  
   
Reinvestment of dividends and distributions
    —       326,450  
   
Cost of shares repurchased
    (55,674,874 )     (20,358,779 )
   
   
Net increase (decrease) in net assets resulting from share transactions
     251,265,653       (12,442,237 )
   
   
TOTAL INCREASE
     258,293,750       775,143  
   
    Net assets:
   
Beginning of period
    109,399,175       108,624,032  
   
   
End of period
  $ 367,692,925     $ 109,399,175  
   
   
Accumulated undistributed net investment income
   $ 4,081,855     $ —  
   
 
The accompanying notes are an integral part of these financial statements.

8

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                                         
Income (loss) from Ratios assuming no
investment operations Distributions to shareholders expense reductions
Net Ratio of Ratio of Ratio of
Net asset realized In excess From Net asset Net assets, Ratio of net investment total net investment
value, Net and Total from From net of net net value, end of net expenses income expenses income (loss) Portfolio
Year — Share beginning investment unrealized investment investment investment realized Total end of Total period to average to average to average to average turnover
Class of period income(b) gain (loss) operations income income gains distributions period return(c) (in 000s) net assets net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)
    2006 — Institutional   $ 12.05     $ 0.14     $ 0.53     $ 0.67     $ —     $ —     $ —     $ —     $ 12.72       5.56 %   $ 114,489       1.14 % (d)     2.12 % (d)     1.15 %(d)     2.11 % (d)     27 %    
    2006 — Service(a)     12.71       0.13       (0.12 )     0.01       —       —       —       —       12.72       0.08       253,204       1.16 (d)     2.10 (d)     1.40 (d)     1.95 (d)     27      
 
    For the Years ended December 31,
    2005 — Institutional     10.62       0.09       1.38       1.47       (0.04 )     —       —       (0.04 )     12.05       13.70       109,399       1.20       0.81       1.36       0.66       56      
    2004 — Institutional     9.48       0.07       1.18       1.25       (0.11 )     —       —       (0.11 )     10.62       13.48       108,624       1.20       0.75       1.35       0.60       63      
    2003 — Institutional     7.25       0.04       2.53       2.57       (0.34 )     —       —       (0.34 )     9.48       35.49       106,792       1.37       0.49       2.60       (0.74 )     49      
    2002 — Institutional     8.99       0.03       (1.68 )     (1.65 )     (0.09 )     —       —       (0.09 )     7.25       (18.34 )     13,214       1.46       0.32       2.96       (1.18 )     86      
    2001 — Institutional     11.78       0.05       (2.68 )     (2.63 )     (0.09 )     (0.04 )     (0.03 )     (0.16 )     8.99       (22.26 )     17,773       1.35       0.47       2.05       (0.23 )     76      
   

(a)  Service Share Class commenced on January 9, 2006.
(b)  Calculated based on the average shares outstanding methodology.
(c)  Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than a full year are not annualized.
(d)  Annualized.

The accompanying notes are an integral part of these financial statements.

 
9

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

Notes to Financial Statements

June 30, 2006 (Unaudited)
 
1.  ORGANIZATION
Goldman Sachs Variable Insurance 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 International Equity Fund (the “Fund”). The Fund is a diversified portfolio under the Act offering two classes of shares — Institutional and Service.
     Shares of the Trust may be purchased and held by separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Trust are not offered directly to the general public.
 
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 traded on a foreign securities exchange are valued daily at fair value determined by an independent service (if available) under valuation procedures approved by the Board of Trustees consistent with applicable regulatory guidance. The independent service takes into account multiple factors including, but not limited to, movements in the U.S. securities markets, certain depositary receipts, futures contracts and foreign currency exchange rates.

     Investments in equity securities and investment companies traded on a U.S. securities exchange or the NASDAQ system or for investments in securities traded on a foreign securities exchange for which an independent service is not available 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 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 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 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.
     Investing in foreign markets may involve special risks and considerations not typically associated with investing in the United States. These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital, and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls, delayed settlements, and their prices may be more volatile than those of comparable securities in the United States.

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.

     In addition, it is the Fund’s policy to accrue for estimated capital gains taxes on foreign securities held by the Fund which are subject to such taxes.

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. Service Shares bear all expenses and fees relating to their Distribution and Service Plan.

D. Federal Taxes and Distributions to Shareholders — 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

 
10

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 
 
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
all of its investment company taxable income and capital gains to its shareholders. Accordingly, no federal tax provisions are required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gains distributions, if any, are declared and paid annually.
     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules, which may differ from generally accepted accounting principles. Therefore, the source of the Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain, or from tax return of capital.

E. Foreign Currency Translations — The books and records of the Fund are maintained in U.S. dollars. Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investment valuations, foreign currency and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates; and (ii) purchases and sales of foreign investments, income and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions.

     Net realized and unrealized gain (loss) on foreign currency transactions will represent: (i) foreign exchange gains and losses from the sale and holdings of foreign currencies; (ii) currency gains and losses between trade date and settlement date on investment securities transactions and forward exchange contracts; and (iii) gains and losses from the difference between amounts of dividends, interest and foreign withholding taxes recorded and the amounts actually received. The effect of changes in foreign currency exchange rates on securities and derivative instruments are not segregated in the Statement of Operations from the effects of changes in market prices of those securities and derivative instruments, but are included with the net realized and unrealized gain (loss) on securities and derivative instruments. Net unrealized foreign exchange gains and losses arising from changes in the value of other assets and liabilities as a result of changes in foreign exchange rates are included as increases and decreases in unrealized gain (loss) on foreign currency related transactions.

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. Forward Foreign Currency Exchange Contracts — The Fund may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date as a hedge or cross-hedge against either specific transactions or portfolio positions. The Fund may also purchase and sell forward contracts to seek to increase total return. All commitments are “marked-to-market” daily at the applicable translation rates and any resulting unrealized gains or losses are recorded in the Fund’s financial statements. The Fund records realized gains or losses at the time a forward contract is offset by entry into a closing transaction or extinguished by delivery of the currency. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.

     The contractual amounts of forward foreign currency exchange contracts do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered.

3. AGREEMENTS

Pursuant to the Investment Management Agreement (the “Agreement”), Goldman Sachs Asset Management International (“GSAMI”), an affiliate of the Investment Management Division of Goldman, Sachs & Co. (“Goldman Sachs”), serves as investment adviser to the Fund. Under the Agreement, GSAMI manages the Fund, subject to the general supervision of the Trust’s Board of Trustees.
 
11

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

3. AGREEMENTS (continued)

     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAMI is entitled to a fee (“Management fee”), computed daily and payable monthly, equal to an annual percentage rate of the Fund’s average daily net assets.
     The Investment Adviser has entered into a fee reduction commitment for the Fund which was implemented on a voluntary basis beginning on July 1, 2005 and on a contractual basis as of April 28, 2006 to achieve the rates listed below:
         
Average Daily Net Assets Annual Rate
First $1 Billion
    1.00%  
Next $1 Billion
    0.90%  
Over $2 Billion
    0.86%  

     In connection with the reorganization of the Allmerica Select International Equity Fund into the Fund, GSAM has contractually agreed to reimburse the Fund as necessary to limit the total annual operating expenses of the Services Shares of the Fund to 1.22% until June 2007.

     GSAMI has contractually agreed to limit certain “Other Expenses” (excluding Management fees, Transfer Agency fees and expenses, taxes, interest, brokerage fees and litigation, indemnification costs, shareholder meeting and other extraordinary expenses exclusive of any expense offset arrangements) to the extent that such expenses exceed, on an annual basis, 0.164% of the average daily net assets of the Fund. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Fund is not obligated to reimburse GSAMI for prior fiscal year expense reimbursements, if any. For the six months ended June 30, 2006, GSAMI made no reimbursements to the Fund.
     In addition, the Fund has entered into certain offset arrangements with the custodian in a reduction in the Fund’s expenses. For the six months ended June 30, 2006, custody fees were reduced by approximately $20,400.
     Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly equal to an annual rate of 0.04% of the average daily net assets of the Fund. Goldman Sachs serves as the distributor of the Fund’s shares at no cost to the Fund.
     The Trust has adopted, on behalf of Service Shares of the Fund, a Distribution and Service plan (the “Plan”). Under the Plan, Goldman Sachs is entitled to a monthly fee for distribution services equal to, on an annual basis, 0.25% of the Fund’s average daily net assets attributable to Service Shares. GSAMI has voluntarily agreed to waive Distribution and Service fees for Service Shares so as not to exceed 0.02% for the Fund. This waivers may be modified or terminated at any time at the option of Goldman Sachs. For the six months ended June 30, 2006, GSAMI waived $299,030 in Distribution and Service fees for the Fund.
     At June 30, 2006, the amounts owed to affiliates were approximately $295,000, $4,000 and $12,000 for Management, Distribution and Service, and Transfer Agent fees, respectively.

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long term securities for the six months ended June 30, 2006, were $307,366,450 and $339,087,186, respectively. For the six months ended June 30, 2006, Goldman Sachs earned approximately $5,500 of brokerage commissions from portfolio transactions executed on behalf of the Fund.

5. SECURITIES LENDING

Pursuant to exemptive relief granted by the Securities and Exchange Commission (“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
 
12

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 
 
5. SECURITIES LENDING (continued)
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 Fund 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.
     Both the Fund and BGA receive compensation relating to the lending of the Fund’s securities. The amount earned by the Fund for the six months ended June 30, 2006, is reported parenthetically on the Statement of Operations. A portion of this amount, $125,206, represents compensation earned by the Fund from lending its securities to Goldman Sachs. For the six months ended June 30, 2006, BGA earned approximately $55,000 in fees as securities lending agent. At June 30, 2006, the Fund loaned securities having a market value of $5,092,644 collateralized by cash in the amount of $5,349,325. The Fund invests the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by Goldman Sachs Asset Management (“GSAM”), for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Fund bears the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.

6. LINE OF CREDIT FACILITY

The Fund participates in a $400,000,000 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 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. This 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 June 30, 2006, the Fund did not have any borrowings under this facility.

7. TAX INFORMATION

As of the Fund’s most recent fiscal year end, December 31, 2005, the Fund’s capital loss carryforwards on a tax basis were as follows.
           
Capital loss carryforward:(1)(2)
       
 
Expiring 2008
  $ (6,413,975 )
 
Expiring 2009
    (27,159,909 )
 
Expiring 2010
    (8,409,296 )
 
Expiring 2011
    (609,034 )
Total capital loss carryforward
  $ (42,592,214 )

(1)  Expiration occurs on December 31 of the year indicated utilization of these losses may be limited under the Code.
(2)  During the year ended December 31, 2005, the Fund utilized $10,641,636 of capital loss carryforwards.

     At June 30, 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
  $ 354,487,815  
Gross unrealized gain
    36,473,463  
Gross unrealized loss
    (17,950,926 )
Net unrealized security gain
  $ 18,522,537  
 
13

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

7. TAX INFORMATION (continued)

     The difference between book-basis and tax basis unrealized gains (losses) is attributable primarily to wash sales.

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 the Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds and the Trustees and Officers of the Goldman Sachs 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, GSAMI, Goldman Sachs and certain related parties including certain Goldman Sachs Funds and the Trustees and Officers of the Trust. The Fund, along with 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 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.
     Based on currently available information, GSAM and GSAMI believe that the likelihood that the pending purported class action and derivative action lawsuit will have a material adverse financial impact on the Fund is remote, and the pending action is not likely to materially affect its ability to provide investment management services to its clients, including the Goldman Sachs Funds.

Mergers and Reorganizations — At a meeting held on July 12, 2005, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization (the “Agreement”) providing for the tax-free acquisition of the Allmerica Investment Trust Select International Equity Fund by the Goldman Sachs VIT International Equity Fund. Following the approval of the Board of Trustees and shareholders of the Allmerica Investment Trust Select International Equity Fund, the acquisition was completed on January 9, 2006.

     Pursuant to the Agreement, the assets and liabilities of the Allmerica Investment Trust Select International Equity Fund Service Class were transferred into the Goldman Sachs VIT International Equity Fund Service Class in a tax-free exchange as follows:
                         
Acquired Fund’s
Exchanged Shares Value of Shares Outstanding
Survivor/Acquired Fund of Survivor Issued Exchanged Shares on January 6, 2006
Goldman Sachs VIT International Equity Fund Service Class/ Allmerica Investment Trust Select International Equity Fund Service Class
    23,697,561     $ 301,195,995       208,893,793  
 
14

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 

8. OTHER MATTERS (continued)

     The following chart shows the Survivor Fund’s and Acquired Fund’s aggregate net assets (immediately before and after the completion of the acquisition) and the Acquired Fund’s unrealized appreciation.
                                 
Survivor Fund’s Acquired Fund’s Survivor Fund’s
Aggregate Aggregate Aggregate
Net Assets Net Assets Acquired Fund’s Net Assets
before before Unrealized immediately
Survivor/Acquired Fund acquisition acquisition Appreciation after acquisition
Goldman Sachs VIT International Equity Fund/ Allmerica Investment Trust Select International Equity Fund
  $ 115,286,200     $ 301,195,995     $ 74,115,402     $ 416,482,195  

New Accounting Pronouncement — On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

9. SUMMARY OF SHARE TRANSACTIONS

Share activity is as follows:
                                 
For the Six Months Ended For the Year Ended
June 30, 2006 December 31, 2005
Shares Dollars Shares Dollars
Institutional Shares
                                
Shares sold
    389,952     $ 5,029,836       693,983     $ 7,590,092  
Reinvestment of dividends and distributions
    —       —       27,664       326,450  
Shares repurchased
    (468,699 )     (6,041,928 )     (1,868,842 )     (20,358,779 )
      (78,747 )     (1,012,092 )     (1,147,196 )     (12,442,237 )
Service Shares*
                                
Shares sold
    56,576       714,696       —       —  
Shares issued in connection with merger
    23,697,561       301,195,995       —       —  
Reinvestment of dividends and distributions
    —       —       —       —  
Shares repurchased
    (3,850,936 )     (49,632,946 )     —       —  
      19,903,201       252,277,745       —       —  
NET INCREASE (DECREASE)
     19,824,454     $ 251,265,653       (1,147,196 )   $ (12,442,237 )

*  Service Share Class commenced on January 9, 2006.

 
15

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

Statement Regarding Basis for Approval of Management Agreement (Unaudited)

     The Trustees oversee the management of Goldman Sachs Variable Insurance Trust (the “Trust”), and review the investment performance and expenses of the investment fund covered by this Report (the “Fund”) at regularly scheduled meetings held during the Fund’s fiscal year. In addition, the Trustees determine annually whether to approve and continue the Trust’s investment management agreement (the “Management Agreement”) with Goldman Sachs Asset Management International (the “Investment Adviser”) for the Fund.

     The Management Agreement was most recently approved by the Trustees, including all of the Trustees who are not parties to the Management Agreement or “interested persons” (as defined in the Investment Company Act of 1940, as amended) of any party thereto (the “Independent Trustees”), on June 15, 2006 (the “Annual Contract Meeting”).
     To assist the Trustees in their deliberations at the Annual Contract Meeting, and in addition to the reviews of the Fund’s investment performance, expenses and other matters at regularly scheduled Board meetings, the Trustees have a Contract Review Committee (the “Committee”) whose members include all of the Independent Trustees. The Committee held meetings on December 15, 2005, February 8, 2006 and May 10, 2006. At these Committee meetings, the Independent Trustees considered matters relating to the Management Agreement including: (a) the Fund’s investment performance; (b) the Fund’s management fee arrangements; (c) the Investment Adviser’s undertaking to reimburse certain expenses of the Fund that exceed a specified level; (d) the Investment Adviser’s potential economies of scale and the breakpoints for the fees payable by the Fund under the Management Agreement; (e) the relative expense level of the Fund; (f) the Investment Adviser’s profitability with respect to the Trust and the Fund; (g) information on the advisory fees charged by the Investment Adviser to institutional accounts; (h) the quality of the non-advisory services provided to the Fund; (i) the statutory and regulatory requirements applicable to the approval and continuation of mutual fund investment management agreements; (j) an evaluation of Trustees’ the contract review process provided by an outside third party; and (k) information on the processes followed by the third party mutual fund data provider engaged as part of the Trustees’ contract review (the “Outside Data Provider”) in producing investment performance and expense comparisons for the Fund.
     At the Annual Contract Meeting, the Trustees reviewed the matters that were considered at the Committee meetings and also considered additional matters including: (a) a summary of fee concessions by the Investment Adviser and its affiliates with respect to the Goldman Sachs mutual funds since 2003; (b) the quality of the Investment Adviser’s services; (c) the structure, staff and capabilities of the Investment Adviser and its portfolio management team; (d) the groups within the Investment Adviser that support the portfolio management team, including the legal and compliance departments, the valuation oversight group, the risk and performance analytics group, the business planning team and the technology group; (e) the Investment Adviser’s business continuity and disaster recovery planning; (f) the Investment Adviser’s financial resources and its ability to hire and retain talented personnel; (g) the fees received by the Investment Adviser’s affiliates from the Fund for transfer agency, securities lending, distribution, portfolio brokerage and other services; (h) the terms of the Management Agreement; (i) the administrative services provided under the Management Agreement, including the nature and extent of the Investment Adviser’s oversight of the Fund’s other service providers, including the custodian and fund accounting agent; and (j) the Investment Adviser’s policies addressing various potential conflicts of interest. At the Annual Contract Meeting, the Trustees also considered at further length the Fund’s investment performance, fees and expenses, including the Fund’s expense trends over time and the breakpoints in the contractual fee rate under the Management Agreement approved in 2005.
 
16

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 

     In connection with the Committee meetings and the Annual Contract Meeting, the Trustees received written materials and oral presentations on the topics covered, and were advised by their independent legal counsel regarding their responsibilities under applicable law. Also, in conjunction with these meetings, the Trustees attended other sessions at which the Trustees reviewed the commission rates paid by the Fund on brokerage transactions, the Investment Adviser’s receipt of research services in connection with those transactions, and the payment of Rule 12b-1 distribution and service fees that are payable by the Fund on its Service Share Class. Information was also provided to the Trustees relating to the Fund’s portfolio turnover, revenue sharing by the Investment Adviser, portfolio manager compensation, the alignment of the interests of the Fund and the portfolio managers, the number and types of accounts managed by the portfolio managers, and other matters. During the course of their deliberations, the Independent Trustees met in executive sessions without employees of the Investment Adviser present.

     The presentations made at the Contract Review Committee meetings and the Annual Contract Meeting encompassed the Fund and other mutual fund portfolios for which the Board of Trustees has responsibility. While the management agreements for the Fund and these other mutual fund portfolios were approved at the same Annual Contract Meeting, the Trustees considered the Management Agreement as it applied to the Fund separately.
     In evaluating the Management Agreement at the Annual Contract Meeting, the Trustees relied upon their knowledge, resulting from their meetings and other interactions throughout the year, of the Investment Adviser, its services and the Fund. At those meetings the Trustees received materials relating to the Investment Adviser’s investment management and other services under the Management Agreement, including: (a) information on the investment performance of the Fund in comparison to other mutual funds and benchmark performance indices; (b) general investment outlooks in the markets in which the Fund invests; (c) compliance reports; and (d) expenses borne by the Fund. In addition, the Trustees were provided with disclosure materials regarding the Goldman Sachs mutual funds and their expenses that are provided to investors who invest in the funds, as well as information on the Goldman Sachs mutual funds’ competitive universe and discussed the broad range of other investment choices that are available to those investors.
     In connection with their approval of the Management Agreement, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. As part of their review, the Trustees considered the nature, extent and quality of the services provided by the Investment Adviser. In this regard, the Trustees considered both the investment advisory services, and the other, non-advisory services, that are provided to the Fund by the Investment Adviser and its affiliates. These services include services as the Fund’s transfer agent, securities lending agent and distributor. In addition, affiliates of the Investment Adviser receive compensation in connection with the execution of the Fund’s portfolio securities transactions. The Trustees concluded that the Investment Adviser was both able to commit substantial financial and other resources to the operations of the Fund and had, in fact, continued to commit those resources in multiple areas including portfolio management, trading, technology, human resources, tax, treasury, legal, compliance, vendor oversight and risk management. The Trustees also believed that the Investment Adviser had made significant commitments to address regulatory compliance requirements applicable to the Fund and the Investment Adviser, including education and training initiatives.
 
17

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

     The Trustees also considered the investment performance of the Fund and the Investment Adviser. In this regard, the Trustees compared the investment performance of the Fund to the performance of other SEC-registered funds and to rankings and ratings issued by the Outside Data Provider. The Trustees also reviewed the Fund’s investment performance relative to its performance benchmark. This information on the Fund’s investment performance was provided for one, three and five year periods. In addition, the Trustees considered the investment performance trends of the Fund over time, and reviewed the investment performance of the Fund in light of its investment objective and policies, as well as in light of periodic analyses of its quality and risk profile. In addition, the Trustees considered whether the Fund had operated within its investment policies, and its record of compliance with its investment limitations. The Trustees believed that the Fund was providing investment performance within a competitive range for long-term investors. In this connection the Trustees noted the steps that had been taken to restructure the portfolio management team for the Fund in 2005, including the hiring of a new chief investment officer and the implementation of structural changes in the portfolio management process.

     The Board of Trustees also considered the contractual fee rate payable by the Fund under the Management Agreement. In this regard, the Trustees considered information on the services rendered by the Investment Adviser to the Fund, which included both advisory and administrative services that were directed to the needs and operations of the Fund as a registered mutual fund. They also considered information that indicated that these mutual fund services differed in various significant respects from the services provided to the Investment Adviser’s institutional accounts, which generally paid lower fees. In addition, the fees paid by the Fund and the Fund’s total operating expense ratios (before and after expense reimbursements) were compared to similar information for mutual funds advised by other, unaffiliated investment management firms. Most of the comparisons of the Fund’s fee rates and total operating expense ratios were prepared by the Outside Data Provider.
     More particularly, the Trustees reviewed analyses prepared by the Outside Data Provider of the expense rankings of the Fund. The analyses provided a comparison of the Fund’s management fee rates to a relevant peer group and a category universe; an expense analysis which compared the Fund’s expenses to a peer group and a category universe; and a five-year history comparing the Fund’s expenses to the category average. The analyses also compared the Fund’s transfer agency fees, custody and accounting fees and other expenses to a peer group and median. The Trustees believed that the comparisons provided by the Outside Data Provider were useful in evaluating the reasonableness of the management fees paid by the Fund. In addition, the Trustees considered the Investment Adviser’s voluntary undertaking to limit the Fund’s total expense ratio (excluding certain expenses) to a specified level. This voluntary undertaking is in addition to the Investment Adviser’s separate contractual agreement to reimburse the Fund as necessary to limit the total annual operating expenses of the Service Shares of the Fund to a specified level until June 2007.
     The Board of Trustees also considered the breakpoints in the contractual fee rate under the Management Agreement for the Fund that were approved in 2005, which had been implemented at the following annual percentages of the average daily net assets of the Fund:

       1.00% on the first $1 billion, 0.90% over $1 billion up to $2 billion and 0.86% over $2 billion.

     In approving these new fee breakpoints, the Trustees had reviewed information regarding the Investment Adviser’s potential economies of scale, and whether the Fund and its shareholders were participating in the benefits of these economies. In this regard, the Trustees considered the amount of assets in the Fund; the information provided by the Investment Adviser relating to the costs of the services provided by the Investment Adviser and its affiliates and the profits realized by them; and information comparing fee rates charged by the Investment Adviser with fee rates charged by other, unaffiliated investment managers to other mutual funds. Upon reviewing these matters again at the Annual Contract Meeting in 2006, the Trustees continued to believe that the fee breakpoints were a way to ensure that benefits of scalability would be passed along to shareholders at the specified asset levels.

 
18

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND 

     The Trustees also considered the other benefits derived by the Investment Adviser and its affiliates from the Fund as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services, and the brokerage and research services received by the Investment Adviser in connection with the placement of brokerage transactions for the Fund. In this regard, the Trustees noted that the Investment Adviser had adopted a policy to cease obtaining third party non-broker research based on the Fund’s brokerage transactions. They also noted that during the past year the Fund had created a new share class, Service Shares, with a distribution and service plan under which an affiliate of the Investment Adviser would receive fees.

     In addition, the Trustees reviewed the Investment Adviser’s pre-tax revenues and pre-tax margins with respect to the Trust and the Fund. In this regard the Trustees reviewed, among other things, profitability analyses and summaries, revenue and expense schedules, and expense allocation methodologies, as well as a report of independent accountants regarding the results of certain agreed-upon procedures to verify expense allocation calculations that were designed to assist the Trustees in their evaluation of the Investment Adviser’s schedules of revenues and expenses. The Trustees considered the Investment Adviser’s revenues and margins both in absolute terms and in comparison to the information on the reported margins earned by other asset management firms.
     After deliberation and consideration of the information provided, including the factors described above, the Trustees concluded that the management fees paid by the Fund were reasonable in light of the services provided by the Investment Adviser, its costs and the Fund’s current and reasonably foreseeable asset levels, and that the Management Agreement should be approved and continued.
 
19

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST INTERNATIONAL EQUITY FUND

Fund Expenses (Unaudited) — Six Month Period Ended June 30, 2006

            As a shareholder of Institutional and Service Shares of the Fund, you incur ongoing costs, including management fees; distribution and service (12b-1) fees (with respect to Service Shares); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in Institutional Shares 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 January 1, 2006 through June 30, 2006.  
 
            Actual Expenses — The first line under each share class of 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 of 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 is not the Fund’s actual return. 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. As a shareholder of the Fund, you do not incur any transaction costs, such as sales charges (loads), redemption fees, or exchange fees, but shareholders of other funds may incur such costs. 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 whose shareholders may incur transaction costs.  

                         
Expenses Paid
for the
Beginning Ending 6 months
Account Value Account Value ended
1/1/06 6/30/06 6/30/06*
Institutional
                        
Actual
  $ 1,000     $ 1,055.60     $ 5.81  
Hypothetical 5% return
    1,000       1,019.14 +     5.70  
Service#
                        
Actual
    1,000       1,000.80       5.44  
Hypothetical 5% return
    1,000       1,017.99 +     5.48  

  *   Expenses 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 June 30, 2006. Expenses are calculated by multiplying the annualized expense ratio by the average account value for such 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 fiscal year. The annualized expense ratios for the period were 1.14% and 1.16% for Institutional and Service Shares, respectively.  
  #   Service Share Class commenced on January 9, 2006. The Beginning Account Value is as of January 9, 2006.  
  +   Hypothetical expenses are based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses.  

 
20

 

     
TRUSTEES
  OFFICERS
Ashok N. Bakhru, Chairman
   Kaysie P. Uniacke, President
John P. Coblentz, Jr.
  James A. Fitzpatrick, Vice President
Patrick T. Harker
  James A. McNamara, Vice President
Mary Patterson McPherson
  John M. Perlowski, Treasurer
Alan A. Shuch
  Peter V. Bonanno, Secretary
Wilma J. Smelcer
   
Richard P. Strubel
   
Kaysie P. Uniacke
   
 
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent 		   
 
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL, L.P.
Investment Adviser
 
GOLDMAN SACHS ASSET MANAGEMENT INTERNATIONAL
133 Peterborough Court
London, England EC4A 2BB
 
Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.
 
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 the 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 September 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 1-800-621-2550.
 
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.
 
Holdings and allocations shown 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.
 
    Toll Free (in U.S.): 800-292-4726
 
This report is prepared for the general information of contract owners and is not an offer of shares of the Goldman Sachs Variable Insurance Trust: International Equity Fund.
 
Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: August 18, 2006
 
VITINTLSAR/06-1201/08-06/30.4K    

 

Goldman
Sachs Variable Insurance Trust
GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, NEW YORK, NEW YORK 10005
Growth Opportunities Fund
Equity Index Fund
Core Fixed Income Fund
Government Income Fund
Money Market Fund
 
Semiannual Report
June 30, 2006
 

 

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH OPPORTUNITIES FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Growth Opportunities Fund from its inception on January 9, 2006* through June 30, 2006.

Market Review

During the first half of 2006, the U.S. equity markets finished in positive territory. Energy and Utility companies continued to be favored by investors, producing significant returns. Conversely, sectors such as Health Care and Technology lagged during the six-month period. The Retail sector remained weak as a result of the overall market environment. The Federal Reserve Board raised short-term interest rates for the 17th consecutive time in June 2006. This was the first increase that was not accompanied by a statement indicating future interest rate hikes, which triggered a slight rally in the equities market at the end of June.

Investment Objective

The Fund seeks long-term growth of capital.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006**
             
% of
Company Net Assets Business
Rockwell Automation, Inc.
    2.5 %   Manufacturing
Fortune Brands, Inc.
    2.3     Beverages
Smith International, Inc.
    2.3     Oil Well Services & Equipment
Linear Technology Corp.
    2.3     Semiconductors/Semi-Cap Equipment
Alliance Data Systems Corp.
    2.2     Commercial Services
Cameron International Corp.
    2.2     Oil & Gas
Amphenol Corp.
    2.2     Networking/Telecommunications Equipment
C.R. Bard, Inc.
    2.1     Medical Products
W.W. Grainger, Inc.
    2.1     Producer Goods
Crown Castle International
    2.1     Telecommunications

* The Goldman Sachs Variable Insurance Trust Growth Opportunities Fund first began operations as the Allmerica Select Capital Appreciation Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance of the Predecessor AIT Fund prior to the reorganization is not provided in this letter because as part of the reorganization the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund. Total return information about the Predecessor AIT Fund is provided in the Financial Highlights table, which is part of this report.

** Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied on in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

 
1

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH OPPORTUNITIES FUND
 
Shareholder Letter (continued)


Performance Review

For the period from the Fund’s inception on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of -4.60%. This return compares to the -0.88% cumulative total return of the Fund’s benchmark, the Russell Midcap Growth Index (with dividends reinvested), over the same time period.

Several of the Fund’s Technology holdings, including CNET Networks, Inc. and Activision, Inc. detracted from performance. Shares of CNET fell after the company reported a narrower-than-expected first-quarter loss, a soft revenue number and weak guidance. Despite the disappointing results, we believe CNET is well positioned to benefit from the growing opportunity in internet advertising as it continues to expand its audience and customer base, grow its core brands and add new ones. Shares of Activision were weak due to the challenging industry environment as consumers have had to wait to purchase new video games until back-ordered Xbox 360 consoles or next generation Sony and Nintendo consoles, which are due by the end of 2006, become available. We believe the video gaming industry will continue to grow and Activision has a strong franchise with high quality products.

Within the Consumer Discretionary sector, Chico’s FAS, Inc. and Williams-Sonoma, Inc. ended the period down. Williams-Sonoma’s first quarter earnings fell from the year-ago period on charges related to consolidation of Hold Everything storage-goods stores and stock option expenses. Women’s apparel retailer Chico’s benefited from stronger demand for its clothing for women over 35 which drove a nearly 20% increase in sales and double-digit profit growth in its fiscal first quarter. However, the stock fell as Chico’s lowered profit expectations for 2006. We believe growth of its core brand is stabilizing and investments in newer brands and square footage growth will impact short-term operating margins. We remain confident in Chico’s fundamentals and believe that these investments will prove to be strategically wise long-term actions. Since 2001 when we initiated a position in Chico’s, the stock has been a significant contributor to performance. In the past five years, the company has grown revenues by an annual 39% and net income 47% a year. With the stock down 33% over the second quarter, we took the opportunity to add to the Fund’s position at what we believe to be an attractive valuation.

XM Satellite Radio Holdings, Inc. was down significantly during the period, despite a revenue increase of over 100% driven by strong subscriber growth during the first quarter. Its shares fell after management made some missteps, causing them to lower their outlook for 2006. XM has also been the subject of FCC and FTC investigations. We believe XM is still well positioned for strong growth, as the company expects cars pre-installed with its radios to increase significantly.

In the Energy sector, oil services and equipment company Weatherford International Ltd. contributed to performance. Weatherford, a provider of equipment and services used for the drilling, completion, and production of oil and natural gas wells, was a top contributor to performance. The company’s stock rose to a new high for the year after it posted a larger-than-expected profit for the first quarter. The company benefited as high oil prices fueled continuing demand from exploration and production companies. All of its divisions posted improvements in profitability due to better product mix and pricing improvements.

 
2

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH OPPORTUNITIES FUND 

In Producer Goods and Services, Alliance Data Systems Corp. and ARAMARK had strong returns. Alliance, a provider of transaction, credit and marketing services was up nearly 26% during the quarter, hitting a new high for the year. The company announced that first quarter earnings rose 52% from a year ago and growth was balanced across all three of its business segments. We believe the quarter’s record performance was driven by continued strength of the marketing services segment, as well as a significant increase of new clients in 2005. ARAMARK performed well as the company’s chief executive, Joseph Neubauer, announced his bid to buy out the company. Some analysts believe the move may be due to the fact that Neubauer thought the company was undervalued by the stock market. We believe ARAMARK’s contract catering business is an attractive growth opportunity long term. They are a low-capital, cash-generative business and the buyers may see the potential for longer-term growth as opposed to the shorter-term approach the stock market has taken recently. However, given the stock’s recent strong performance, it was sold to capture profits.

Within Healthcare, shares of Fisher Scientific International, Inc. reacted positively to the announcement of the company’s merger with Thermo Electron Corp. In addition, the distributor of scientific equipment and instruments said its fourth quarter income more than doubled, driven by strong revenue growth across its various business segments.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Growth Equity Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Growth Opportunities Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT Growth Opportunities Fund invests in U.S. equity investments with a primary focus on mid-cap companies. The Fund 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 securities of mid-capitalization companies involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. 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

 
3

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH OPPORTUNITIES FUND
 
Shareholder Letter (continued)

participate in the Initial Public Offering (IPO) market, and a portion of the Fund’s returns consequently may be attributable to its investment in IPOs. The market value of IPO shares may fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, and the small number of shares available for trading and limited information about the issuer. When a fund’s asset base is small, IPOs may have a magnified impact on the fund’s performance. As a fund’s assets grow, it is probable that the effect of the fund’s investment in IPOs on its total returns may not be as significant, which could reduce the fund’s performance.

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term Investments include repurchase agreements and securities lending collateral, if any. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
4

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Equity Index Fund from its inception on January 9, 2006* through June 30, 2006.

Market Review

Although the global equity markets began the year on a positive note and finished the second quarter with an appealing upturn, their fluctuations during May and June sorely tested investors’ mettle. U.S. Federal Reserve Board (the “Fed”) Chairman, Ben Bernanke, continued to establish credibility as a central banker, but facile expectations that he could serenely continue to walk the fine line of moderate growth with limited inflation proved too difficult to meet. A heady mix of inflation-fighting wording and troublesome inflation data brought steady equity selling in May, driving volatility measures to levels not seen since 2004. As hedge funds and risk managers adjusted to reduced market stability, the market’s weakness continued into mid-June, when the report of core inflation put its annual rate at 2.4%, matching its highest level since 2002. This effectively sealed the fate of a 17th consecutive hike in the federal funds target rate, which did indeed come to pass two weeks later on June 29. When the Fed’s statement accompanying the June 29 decision, which lifted short-term rates to 5.25%, appeared distinctly more accommodative than a jittery consensus had feared, the first half of 2006 was able to end with a vigorous rally in both share prices and investor sentiment.

After touching its lowest level since last November on June 14th, the Fund’s benchmark, the S&P 500 Index (“S&P”) bounced sharply to finish the month of June with a scant but positive 0.14% return. Still, after a strong first quarter return of 4.21%, its May travails left the S&P with a -1.44% return for the second quarter and an uninspiring 2.71% return since the start of 2006.

Investment Objective

The Fund seeks to achieve investment results that correspond to the aggregate price and yield performance of a benchmark index that measures the investment returns of large capitalization stocks.

Portfolio Composition

Top 10 Portfolio Holdings as of June 30, 2006**
             
% of
Company Net Assets Business
Exxon Mobil Corp.
    3.2 %   Oil & Gas
General Electric Co.
    2.9     Industrial Conglomerates
Citigroup, Inc.
    2.1     Diversified Financials
Bank of America Corp.
    1.9     Banks
Microsoft Corp.
    1.8     Software
Procter & Gamble Co.
    1.6     Household Products
Johnson & Johnson
    1.5     Pharmaceuticals
Pfizer, Inc.
    1.5     Pharmaceuticals
American International Group, Inc.
    1.3     Insurance
Altria Group, Inc.
    1.3     Tobacco
 
5

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND
 
Shareholder Letter (continued)

* The Goldman Sachs Variable Insurance Trust Equity Index Fund first began operations as the Allmerica Equity Index Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance of the Predecessor AIT Fund prior to the reorganization is not provided in this letter because as part of the reorganization the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund. Total return information about the Predecessor AIT Fund is provided in the Financial Highlights table, which is part of this report.

** Opinions expressed in this report represent our present opinions only. Reference to individual securities should not be construed as a commitment that such securities will be retained in the Fund. From time to time, the Fund may change the individual securities it holds, the number or types of securities held and the markets in which it invests. Fund holdings of stocks or bonds should not be relied upon in making investment decisions and should not be construed as research or investment advice regarding particular securities. References to individual securities do not constitute a recommendation to the investor to buy, hold or sell such securities. In addition, references to past performance of the Fund do not indicate future returns, which are not guaranteed and will vary. Furthermore, the value of shares of the Fund may fall as well as rise.

Performance Review

For the period from the Fund’s inception on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of -0.50%. This return compares to the -0.31% cumulative total return of the Fund’s benchmark, the S&P 500 Index (with dividends reinvested), over the same time period. As these returns indicate, the Fund’s performance was largely in line with that of its benchmark during the reporting period.

The market turbulence during the second quarter put defensive equity sectors into a leadership role. The top groups in the S&P 500 Index in June were Telecommunications Services, returning 4.76%; Utilities, returning 2.41%; Energy, returning 2.09%; and Consumer Staples, with a 1.52% return. The latter three were also the best performers for the full second quarter, as Utilities returned 5.69%; Energy returned 4.28%; and Consumer Staples posted a 2.93% return. Although the Telecommunications group returned -0.56% from April through June, its year-to-date return of 13.81%, powered by its first quarter return of 14.45%, was highest among the S&P 500 Index sectors. Energy stocks, with a 13.79% year-to-date return, were in second place.

Away from the winning sectors, gains were scarce in the second quarter. After a strong showing in the first quarter, returning 4.13%, Information Technology was the most challenged area in the second quarter, returning -1.61% in June and -9.62% over the full second quarter. This resulted in a -5.89% return during the first half of the year. Competitive pressures led to persistent erosion in the heavily weighted shares of erstwhile stalwarts such as Microsoft Corp., Intel Corp., and Dell, Inc., consigning Technology stocks to the bottom of the performance rankings. The only other sector in the red on a year-to-date basis was Healthcare. After posting a return of 1.26% in the first three months of 2006, the often defensive sector has been anything but in 2006, showing a -5.11% return for the second quarter and a -4.19% return since the start of the year. While shares of drug makers have stabilized after liability fears gripped the industry in 2005, manufacturers of medical devices have been extremely weak thus far in 2006. Equity in defibrillator makers has eroded on product defect concerns, while antitrust threats have emerged at orthopedics companies. Finally, shares in care provider UnitedHealth Group, Inc. which was among the first companies to attract unwanted attention for irregularities in its awards of stock options to senior executives, have started to level off after strong gains in recent years.

It comes as no surprise that the largest contributors to the return of the S&P 500 for the first six months of 2006 were two Energy stocks, Exxon Mobil Corp., returning 10.35%, and

 
6

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND 

Schlumberger Ltd., returning 34.60%, as well as Telecommunications firm BellSouth Corp., which posted a 36.16% return. The largest detractors for the reporting period were Information Technology company Intel Corp, returning -23.11%, Healthcare firm UnitedHealth Group, Inc., which posted a -27.90% return, and financial firm American International Group, Inc. (AIG), which returned -13.04%.

The largest three overall contributors to performance in the Index for the six-month period were Allegheny Technologies, Inc., which returned 92.55%; Archer-Daniels-Midland Co., which posted a 68.34% return; and NuCor Corp., which returned 65.55%. The biggest three detractors from performance for the same time period were Dana Corp., which returned -62.12%; KB Home, which posted a -36.40% return; and Goodyear Tire & Rubber Co., which returned -36.13%.

We thank you for your investment and look forward to serving your investment needs in the future.

August 2, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Equity Index Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT Equity Index Fund invests in a broadly diversified portfolio of large-cap 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’s performance may vary substantially from the performance of the benchmark it tracks (S&P 500 Index) as a result of share purchases and redemptions, transaction costs, expenses and other factors. The Fund may make investments in derivative instruments, including options, futures, swaps, structured securities and other derivative investments. Derivative instruments may involve a high degree of financial risk. These risks include the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instrument; risks of default by a counterparty, and the risks that transactions may not be liquid.

 
7

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND
 
Shareholder Letter (continued)

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term Investments include repurchase agreements and securities lending collateral, if any. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
8

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Core Fixed Income Fund from its inception on January 9, 2006* through June 30, 2006.

Market Review

Treasury prices fell over the period in response to heightened inflationary pressures and mixed economic data. Sustained high energy prices and increased intermediate goods costs added to inflation concerns and prompted expectations of higher interest rates. Economic data, however, was mixed. While annualized first quarter GDP was revised upwards to 5.6% from 5.3%, suggesting resiliency in U.S. economic strength, much of the economic data pointed to a gradual moderation in economic growth. Weaker residential home prices, softer equity markets, and continued strength in commodity prices raised concerns regarding the strength of the consumer. As anticipated, the Federal Reserve Board raised the target federal funds rate in four 25-basis point increments to 5.25%. Overall, the 10-year Treasury yield rose 74 basis points over the period, closing at 5.14%.

Investment Objective

The Fund seeks a total return consisting of capital appreciation and income that exceeds the total return of the Lehman Brothers Aggregate Bond Index.

* The Goldman Sachs Variable Insurance Trust Core Fixed Income Fund first began operations as the Allmerica Select Investment Grade Income Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance of the Predecessor AIT Fund prior to the reorganization is not provided in this letter because as part of the reorganization the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund. Total return information about the Predecessor AIT Fund is provided in the Financial Highlights table, which is part of this report.

Performance Review

For the period from the Fund’s inception on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of –1.02%. This return compares to the –1.04% cumulative total return of the Fund’s benchmark, the Lehman Brothers Aggregate Bond Index (with dividends reinvested), over the same time period.

The Fund marginally outperformed its benchmark during the reporting period, driven by a combination of top-down and bottom-up strategies. The Fund continued to hold a short duration positioning, based on our belief that interest rates would move higher than was priced in to the market. This short duration strategy was a key contributor to returns as interest rates rose over the period. The Fund’s currency strategy, particularly an underweight in the Great Britain pound and euro exposure, detracted from returns. The Fund continued to hold an underweight exposure to the corporate sector over the period. This positioning modestly detracted as the sector outperformed over the period. The Fund’s government and agency security selection, particularly within Treasury Inflation Protected Securities (TIPS), contributed to returns. Within mortgages, a preference for securities that have less exposure to volatility, and housing turnover, such as 15-year mortgage-backed securities, super-senior adjustable rate mortgages, and collateralized mortgage-backed securities, benefited performance.

We thank you for your investment and look forward to serving your investment needs in the future.

 
9

 

Shareholder Letter (continued)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND

Goldman Sachs Fixed Income Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Core Fixed Income Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT Core Fixed Income Fund’s investments in fixed income securities are subject to the risks associated with debt securities including credit and interest rate risk. The guarantee on U.S. government securities applies only to the underlying securities of the Fund if held to maturity and not to the value of the Fund’s shares. The Fund’s investments in mortgage-backed securities are subject to prepayment risks. These risks may result in greater share price volatility. The Fund may make substantial investments in derivative instruments, including options, financial futures, Eurodollar futures contracts, swaps, option on swaps, structured securities and other derivative investments. Derivative instruments may involve a high degree of financial risk. These risks include the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instrument; risks of default by a counterparty, and the risks that transactions may not be liquid. Foreign and emerging markets investments may be more volatile and less liquid than investment in U.S. securities and will be subject to the risks of currency fluctuations and 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 also engage in foreign currency transactions for hedging purposes including cross hedging or for speculative purposes. Forward foreign currency exchange contracts are subject to the risk that the counterparty to the contract will default on its obligations.

 
10

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND 

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The percentage shown for each investment sector reflects the value of investments in that sector as a percentage of net assets. Short-term investments include repurchase agreements, if any. “Quasi-governments” include agency securities offered by companies such as Fannie Mae and Freddie Mac, which operate under a government charter. While they have to report to a government regulator, their assets are not explicitly guaranteed by the government and they otherwise operate like any other publicly traded company. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
11

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GOVERNMENT INCOME FUND

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Government Income Fund from its inception on January 9, 2006* through June 30, 2006.

Market Review

Treasury prices fell over the period in response to heightened inflationary pressures and mixed economic data. Sustained high energy prices and increased intermediate goods costs added to inflation concerns, and prompted expectations of higher interest rates. Economic data, however, was mixed. While annualized first quarter gross domestic product was revised upwards to 5.6% from 5.3%, suggesting resiliency in U.S. economic strength, much of the economic data pointed to a gradual moderation in economic growth. Weaker residential home prices, softer equity markets, and continued strength in commodity prices raised concerns regarding the strength of the consumer. As anticipated, the Federal Reserve Board raised the target federal funds rate in four 25-basis point increments to 5.25%. Overall, the 10-year Treasury yield rose 74 basis points over the period, closing at 5.14%.

Investment Objective

The Fund seeks a high level of current income, consistent with safety of principal.

* The Goldman Sachs Variable Insurance Trust Government Income Fund first began operations as the Allmerica Government Bond Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance of the Predecessor AIT Fund prior to the reorganization is not provided in this letter because as part of the reorganization the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund. Total return information about the Predecessor AIT Fund is provided in the Financial Highlights table, which is part of this report.

Performance Review

For the period from the Fund’s inception on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of –0.51%. This return compares to the –0.79% cumulative total return of the Fund’s benchmark, the Lehman Brothers Government/Mortgage Index (with dividends reinvested), over the same time period.

The Fund outperformed its benchmark during the reporting period, driven by a combination of top-down and bottom-up strategies. We maintained a defensive posture over the period, positioning the Fund to have a shorter duration relative to the Index based on our belief that interest rates would move higher. Although higher interest rates were a drag on returns, our short duration strategy was a meaningful contributor to returns as interest rates rose over the period, driven primarily by heightened inflationary pressures. We maintained an underweight exposure to mortgages over the period. This was due to negative fundamentals, such as low spread and implied volatility. We did, however, take the opportunity to add value in security-specific trades, and security selection across the collateralized and government sectors were key drivers of performance over the period. Within mortgages, our focus has been on securities we believe had less exposure to implied volatility, and housing turnover, such as 15-year mortgage-backed securities, super-senior adjustable-rate mortgage floaters and collateralized mortgage-backed securities. Within the government sector, our selection of short-dated Treasury and agency securities enhanced returns.

 
12

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GOVERNMENT INCOME FUND 

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Fixed Income Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Government Income Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

The VIT Government Income Fund’s net asset value and yield are not guaranteed by the U.S. government or by its agencies, instrumentalities or sponsored enterprises. Investments in fixed income securities are subject to the risks associated with debt securities including credit and interest rate risk. The guarantee on U.S. government securities applies only to the underlying securities of the Fund if held to maturity and not to the value of the Fund’s shares. The Fund’s investments in mortgage-backed securities are subject to prepayment risks. These risks may result in greater share price volatility. The Fund may make substantial investments in derivative instruments, including options, financial futures, Eurodollar futures contracts, swaps, option on swaps, structured securities and other derivative investments. Derivative instruments may involve a high degree of financial risk. These risks include the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instrument, risks of default by a counterparty, and the risks that transactions may not be liquid.

 
13

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GOVERNMENT INCOME FUND
 
Shareholder Letter (continued)

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Percentage of Net Assets

† The percentage shown for each investment sector reflects the value of investments in that sector as a percentage of net assets. Short-term investments include repurchase agreements, if any. Figures in the above graph may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
14

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MONEY MARKET FUND 

Shareholder Letter

Dear Shareholders:

This report provides an overview on the performance of the Goldman Sachs Variable Insurance Trust — Money Market Fund from its inception on January 9, 2006* through June 30, 2006.

Market Review

Economic data was mixed in the first half of 2006. We witnessed a strong economy in the first quarter with first quarter gross domestic product of 5.6%. In addition, the labor markets continued to show signs of strength in both payrolls and initial jobless claims. However, a variety of factors seem to have changed the U.S. economy in the second quarter of 2006, from a robust economy to one of more moderate growth. This slowdown was seen in several areas, including the housing market, manufacturing and the labor market.

The Federal Reserve Open Market Committee (“FOMC”) continued its tightening campaign in the first half of 2006 and raised the federal funds rate by 25 basis points at each of its four meetings. This brought the federal funds rate to 5.25%, a five-year high. In his second testimony as the Chairman of the Federal Reserve Board (the “Fed”), Ben Bernanke, maintained his concerns about inflation, as it was higher than the Fed had expected. Also in his testimony, he suggested that the recent core Consumer Price Index report was not enough to assure another rate increase. Other key economic data between now and the next FOMC meeting on August 8th will include home sales, GDP, and employment numbers.

Investment Objective

The Fund seeks to maximize current income to the extent consistent with the preservation of capital and the maintenance of liquidity by investing exclusively in high quality money market instruments.

                                 
Standardized Standardized 30-Day
7-Day Current 7-Day Effective Average Weighted Avg.
As of June 30, 2006 Yield Yield Yield Maturity (days)
VIT Money Market Fund
    4.65 %     4.76 %     4.59 %     27  

An investment in a money market portfolio is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market portfolio seeks to preserve the value of an investment at $1.00 per share, it is possible to lose money by investing in a money market portfolio.

The yields represent past performance. Past performance does not guarantee future results. Current performance may be lower or higher than the performance quoted above.

Yields will fluctuate as market conditions change. The yield quotations more closely reflect the current earnings of the Fund.

* The Goldman Sachs Variable Insurance Trust Money Market Fund first began operations as the Allmerica Money Market Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance of the Predecessor AIT Fund prior to the reorganization is not provided in this letter because as part of the reorganization the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund. Total return information about the Predecessor AIT Fund is provided in the Financial Highlights table, which is part of this report.

 
15

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MONEY MARKET FUND
 
Shareholder Letter (continued)

Performance Review

For the period from its inception on January 9, 2006 to June 30, 2006, the Fund’s Service Shares generated a cumulative total return of 2.04%.

We maintained a neutral stance for the Fund’s portfolio during the reporting period, primarily purchasing securities on the shorter end of the yield curve, mainly in the one- to three-month sector. Throughout the period we maintained a weighted average maturity for the Fund in the 26-40 day range. The market had anticipated the four tightenings by the FOMC and, based on this assessment and the shape of the yield curve, we did not believe the longer end of the curve offered much value. We were able to marginally purchase securities in the one-year sector throughout the reporting period during times of sell-offs. Going forward, we will look for value on the longer end of the curve as we believe the FOMC may be approaching the end of its tightening cycle.

We thank you for your investment and look forward to serving your investment needs in the future.

Goldman Sachs Money Market Management Team

July 18, 2006

Shares of the Goldman Sachs Variable Insurance Trust (“VIT”) Money Market Fund are offered to separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Fund are not offered directly to the general public. The variable annuity contracts and variable life insurance policies are described in the separate prospectuses issued by participating insurance companies. You should refer to those prospectuses for information about surrender charges, mortality and expense risk fees and other charges that may be assessed by participating insurance companies under the variable annuity contracts or variable life insurance policies. Such fees or charges, if any, may affect the return you may realize with respect to your investments. Ask your representative for more complete information. 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 Fund.

 
16

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MONEY MARKET FUND 

SECTOR ALLOCATION AS OF JUNE 30, 2006†

Tax-Exempt Fund

† The Fund is actively managed and, as such, its composition may differ over time. The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Figures in the above chart may not sum to 100% due to the exclusion of other assets and/or liabilities.

 
17

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH OPPORTUNITIES FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 99.9%
    Aerospace & Defense – 1.9%
      57,800     Alliant Techsystems, Inc.*   $ 4,413,030  
   
    Apparel/Shoes – 3.6%
      140,780     Chico’s FAS, Inc.*     3,798,245  
      66,600     Coach, Inc.*     1,991,340  
      139,570     Urban Outfitters, Inc.*     2,441,079  
                 
 
                  8,230,664  
   
    Audio & Visual Equipment – 2.0%
      54,300     Harman International Industries, Inc.     4,635,591  
   
    Audio Technology – 0.8%
      73,900     Dolby Laboratories, Inc.*     1,721,870  
   
    Auto Parts & Related – 1.5%
      250,700     Gentex Corp.     3,509,800  
   
    Banks – 1.4%
      42,610     Commerce Bancorp, Inc.(a)     1,519,899  
      66,870     TCF Financial Corp.     1,768,711  
                 
 
                  3,288,610  
   
    Beverages – 2.3%
      74,710     Fortune Brands, Inc.     5,305,157  
   
    Biotechnology – 1.4%
      117,200     MedImmune, Inc.*     3,176,120  
   
    Broadcasting & Cable/Satellite TV – 3.8%
      82,200     Cablevision Systems Corp.*     1,763,190  
      438,700     Entravision Communications Corp.*     3,759,659  
      208,800     XM Satellite Radio Holdings, Inc.*     3,058,920  
                 
 
                  8,581,769  
   
    Business Software & Services – 2.9%
      181,500     Ceridian Corp.*     4,435,860  
      54,400     ChoicePoint, Inc.*     2,272,288  
                 
 
                  6,708,148  
   
    Commercial Services – 4.2%
      87,040     Alliance Data Systems Corp.*     5,119,693  
      15,500     Bankrate, Inc.*(a)     585,280  
      70,400     Iron Mountain, Inc.*     2,631,552  
      43,280     Suntech Power Holdings Co., Ltd. ADR*     1,222,660  
                 
 
                  9,559,185  
   
    Computer Hardware – 2.0%
      110,000     Jabil Circuit, Inc.     2,816,000  
      53,094     Zebra Technologies Corp.*     1,813,691  
                 
 
                  4,629,691  
   
    Computer Software – 4.4%
      358,066     Activision, Inc.*     4,074,791  
      111,530     Cognos, Inc.*     3,173,028  
      61,000     NAVTEQ*     2,725,480  
                 
 
                  9,973,299  
   
    Consumer Products & Services – 1.5%
      3,135     Sotheby’s Holdings, Inc.*     82,294  
      80,600     Weight Watchers International, Inc.     3,295,734  
                 
 
                  3,378,028  
   
    Drugs & Medicine – 1.3%
      90,700     OSI Pharmaceuticals, Inc.*(a)     2,989,472  
   
    Electrical Equipment – 1.2%
      118,800     Dresser-Rand Group, Inc.*     2,789,424  
   
    Financial Services – 1.8%
      119,700     MoneyGram International, Inc.     4,063,815  
   
    Financials – 0.8%
      17,600     Legg Mason, Inc.     1,751,552  
   
    Foods – 1.4%
      59,900     The Hershey Co.     3,298,693  
   
    Gaming/Lodging – 1.6%
      31,580     Harrah’s Entertainment, Inc.     2,247,864  
      51,200     Hilton Hotels Corp.     1,447,936  
                 
 
                  3,695,800  
   
    Health Care Services – 3.9%
      64,800     Covance, Inc.*     3,967,056  
      51,100     Omnicare, Inc.     2,423,162  
      75,860     VCA Antech, Inc.*     2,422,210  
                 
 
                  8,812,428  
   
    Homebuilding & Related – 1.9%
      100,500     American Standard Companies, Inc.     4,348,635  
   
    Housewares – 1.8%
      123,400     Williams-Sonoma, Inc.     4,201,770  
   
    Insurance – 1.3%
      96,100     Willis Group Holdings Ltd.     3,084,810  
   
    Internet & Online – 1.2%
      355,100     CNET Networks, Inc.*     2,833,698  
   
    Manufacturing – 4.5%
      20,300     Chicago Bridge & Iron Co. NV     490,245  
      15,800     ITT Corp.     782,100  
      99,900     Pentair, Inc.     3,415,581  
      79,190     Rockwell Automation, Inc.     5,702,472  
                 
 
                  10,390,398  
   
    Medical Products – 5.0%
      66,740     C.R. Bard, Inc.     4,889,372  
      31,060     Fisher Scientific International, Inc.*     2,268,933  
      129,000     St. Jude Medical, Inc.*     4,182,180  
                 
 
                  11,340,485  
   
    Medical Supplies – 1.6%
      99,990     Charles River Laboratories International, Inc.*     3,679,632  
   
 
The accompanying notes are an integral part of these financial statements.

18

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH OPPORTUNITIES FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Networking/Telecommunications Equipment – 4.9%
      89,710     Amphenol Corp.   $ 5,020,172  
      111,300     FLIR Systems, Inc.*     2,455,278  
      51,750     Research In Motion Ltd.*     3,610,597  
                 
 
                  11,086,047  
   
    Oil & Gas – 5.0%
      105,650     Cameron International Corp.*     5,046,901  
      87,700     Newfield Exploration Co.*     4,292,038  
      56,300     Quicksilver Resources, Inc.*(a)     2,072,403  
                 
 
                  11,411,342  
   
    Oil Well Services & Equipment – 5.8%
      78,200     Grant Prideco, Inc.*     3,499,450  
      117,900     Smith International, Inc.     5,243,013  
      89,310     Weatherford International Ltd.*     4,431,562  
                 
 
                  13,174,025  
   
    Producer Goods – 2.1%
      62,900     W.W. Grainger, Inc.     4,731,967  
   
    Publishing – 2.0%
      85,200     Lamar Advertising Co.*     4,588,872  
   
    Restaurants – 1.1%
      67,100     P.F. Chang’s China Bistro, Inc.*(a)     2,551,142  
   
    Retailing – 0.9%
      71,000     Advance Auto Parts, Inc.     2,051,900  
   
    Semiconductors/Semi-Cap Equipment – 7.8%
      51,900     Advanced Micro Devices, Inc.*     1,267,398  
      77,900     FormFactor, Inc.*     3,476,677  
      156,400     Linear Technology Corp.     5,237,836  
      23,050     Marvell Technology Group Ltd.*     1,021,806  
      34,900     Microchip Technology, Inc.     1,170,895  
      126,000     Tessera Technologies, Inc.*     3,465,000  
      94,700     Xilinx, Inc.     2,144,955  
                 
 
                  17,784,567  
   
    Technology Services – 4.3%
      128,411     Cogent, Inc.*(a)     1,935,154  
      63,410     Cognizant Technology Solutions Corp.*     4,271,932  
      108,700     NeuStar, Inc.*     3,668,625  
                 
 
                  9,875,711  
   
    Telecommunications – 3.0%
      69,000     American Tower Corp.*     2,147,280  
      136,000     Crown Castle International Corp.*     4,697,440  
                 
 
                  6,844,720  
   
    TOTAL COMMON STOCKS
    (Cost $235,677,381)   $ 228,491,867  
   
                             
Principal Interest Maturity
Amount Rate Date Value
   
Repurchase Agreement(b) – 0.2%
    Joint Repurchase Agreement Account II
    $ 400,000       5.28 %   07/03/2006   $ 400,000  
    Maturity Value:  $400,175
    (Cost $400,000)
   
    TOTAL REPURCHASE AGREEMENT
    (Cost $400,000)   $ 400,000  
   
    TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
    (Cost $236,077,381)   $ 228,891,867  
   
                     
Shares Description Value
   
Securities Lending Collateral – 4.8%
      10,962,000     Boston Global Investment Trust – Enhanced Portfolio   $ 10,962,000  
    (Cost $10,962,000)
   
    TOTAL INVESTMENTS – 104.9%
    (Cost $247,039,381)   $ 239,853,867  
   
    LIABILITIES IN EXCESS OF        
    OTHER ASSETS – (4.9)%     (11,293,773 )
   
    NET ASSETS – 100.0%   $ 228,560,094  
   

  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) All or portion of security is on loan.
 
 (b) Joint repurchase agreement was entered into on June 30, 2006. Additional investment information appears on page 39.
             
   
    Investment Abbreviation:
    ADR   —   American Depositary Receipt
   
 
The accompanying notes are an integral part of these financial statements.

19

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – 98.9%
    Aerospace & Defense – 2.1%
      15,000     General Dynamics Corp.   $ 981,900  
      4,800     Goodrich Corp.     193,392  
      4,600     L-3 Communications Holdings, Inc.     346,932  
      13,182     Lockheed Martin Corp.     945,677  
      12,792     Northrop Grumman Corp.     819,455  
      16,600     Raytheon Co.     739,862  
      6,200     Rockwell Collins, Inc.     346,394  
      29,638     The Boeing Co.     2,427,649  
      37,500     United Technologies Corp.     2,378,250  
                 
 
                  9,179,511  
   
    Air Freight & Couriers – 1.1%
      11,300     FedEx Corp.     1,320,518  
      2,000     Ryder System, Inc.     116,860  
      40,300     United Parcel Service, Inc. Class B     3,317,899  
                 
 
                  4,755,277  
   
    Airlines – 0.1%
      26,318     Southwest Airlines Co.     430,826  
   
    Auto Components – 0.2%
      2,600     Cooper Tire & Rubber Co.(a)     28,964  
      7,200     Johnson Controls, Inc.     591,984  
      7,000     The Goodyear Tire & Rubber Co.*(a)     77,700  
                 
 
                  698,648  
   
    Automobiles – 0.4%
      68,681     Ford Motor Co.     475,959  
      21,000     General Motors Corp.(a)     625,590  
      9,900     Harley-Davidson, Inc.     543,411  
                 
 
                  1,644,960  
   
    Banks – 7.1%
      12,200     AmSouth Bancorp.     322,690  
      169,028     Bank of America Corp.     8,130,247  
      28,700     Bank of New York Co., Inc.     924,140  
      20,200     BB&T Corp.     840,118  
      5,950     Comerica, Inc.     309,341  
      6,900     Commerce Bancorp, Inc.     246,123  
      4,700     Compass Bancshares, Inc.     261,320  
      20,505     Fifth Third Bancorp.     757,660  
      4,300     First Horizon National Corp.     172,860  
      9,500     Golden West Financial Corp.     704,900  
      9,049     Huntington Bancshares, Inc.     213,375  
      14,900     KeyCorp     531,632  
      3,000     M&T Bank Corp.     353,760  
      8,200     Marshall & Ilsley Corp.     375,068  
      15,300     Mellon Financial Corp.     526,779  
      20,300     National City Corp.     734,657  
      17,050     North Fork Bancorp., Inc.     514,399  
      6,800     Northern Trust Corp.     376,040  
      10,900     PNC Financial Services Group, Inc.     764,853  
      16,855     Regions Financial Corp.     558,238  
      13,785     Sovereign Bancorp, Inc.     279,973  
      13,500     SunTrust Banks, Inc.     1,029,510  
      10,900     Synovus Financial Corp.     291,902  
      66,034     U.S. Bancorp     2,039,130  
      59,727     Wachovia Corp.     3,230,036  
      35,640     Washington Mutual, Inc.     1,624,471  
      62,230     Wells Fargo & Co.     4,174,388  
      4,000     Zions Bancorp.     311,760  
                 
 
                  30,599,370  
   
    Beverages – 2.1%
      28,800     Anheuser-Busch Companies, Inc.     1,312,992  
      3,200     Brown-Forman Corp. Class B     228,640  
      11,600     Coca-Cola Enterprises, Inc.     236,292  
      7,600     Constellation Brands, Inc.*     190,000  
      2,100     Molson Coors Brewing Co. Class B     142,548  
      5,200     Pepsi Bottling Group, Inc.     167,180  
      61,210     PepsiCo., Inc.     3,675,048  
      76,100     The Coca-Cola Co.     3,273,822  
                 
 
                  9,226,522  
   
    Biotechnology – 1.2%
      43,708     Amgen, Inc.*     2,851,073  
      12,685     Biogen Idec, Inc.*     587,696  
      9,700     Genzyme Corp.*     592,185  
      16,800     Gilead Sciences, Inc.*     993,888  
      8,900     MedImmune, Inc.*     241,190  
                 
 
                  5,266,032  
   
    Building Products – 0.2%
      6,500     American Standard Companies, Inc.     281,255  
      14,900     Masco Corp.     441,636  
                 
 
                  722,891  
   
    Chemicals – 1.5%
      8,400     Air Products & Chemicals, Inc.     536,928  
      2,600     Ashland, Inc.     173,420  
      35,577     Dow Chemical Co.     1,388,570  
      34,200     E.I. du Pont de Nemours & Co.     1,422,720  
      2,900     Eastman Chemical Co.     156,600  
      6,600     Ecolab, Inc.     267,828  
      4,300     Hercules, Inc.*     65,618  
      3,100     International Flavors & Fragrances, Inc.     109,244  
      10,127     Monsanto Co.     852,592  
      6,100     PPG Industries, Inc.     402,600  
      11,900     Praxair, Inc.     642,600  
      5,475     Rohm & Haas Co.     274,407  
      2,600     Sigma-Aldrich Corp.     188,864  
                 
 
                  6,481,991  
   
    Commercial Services & Supplies – 1.0%
      8,700     Allied Waste Industries, Inc.*     98,832  
      5,100     Apollo Group, Inc.*     263,517  
      4,200     Avery Dennison Corp.     243,852  
                     
   
 
The accompanying notes are an integral part of these financial statements.

20

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Commercial Services & Supplies – (continued)
      37,133     Cendant Corp.   $ 604,896  
      5,300     Cintas Corp.     210,728  
      5,500     Convergys Corp.*     107,250  
      4,900     Equifax, Inc.     168,266  
      6,550     Fiserv, Inc.*     297,108  
      12,000     H&R Block, Inc.     286,320  
      4,900     Monster Worldwide, Inc.*     209,034  
      8,200     Pitney Bowes, Inc.     338,660  
      8,200     R.R. Donnelley & Sons Co.     261,990  
      6,500     Robert Half International, Inc.     273,000  
      5,208     Sabre Holdings Corp.     114,576  
      20,135     Waste Management, Inc.     722,444  
                 
 
                  4,200,473  
   
    Communications Equipment – 2.7%
      4,585     ADC Telecommunications, Inc.*     77,303  
      6,300     Andrew Corp.*     55,818  
      15,831     Avaya, Inc.*     180,790  
      23,000     Ciena Corp.*     110,630  
      226,000     Cisco Systems, Inc.*     4,413,780  
      7,700     Comverse Technology, Inc.*     152,229  
      57,500     Corning, Inc.*     1,390,925  
      65,200     JDS Uniphase Corp.*     164,956  
      21,200     Juniper Networks, Inc.*     338,988  
      158,882     Lucent Technologies, Inc.*     384,495  
      91,335     Motorola, Inc.     1,840,400  
      62,200     QUALCOMM, Inc.     2,492,354  
      16,300     Tellabs, Inc.*     216,953  
                 
 
                  11,819,621  
   
    Computers & Peripherals – 3.4%
      31,500     Apple Computer, Inc.*     1,799,280  
      84,300     Dell, Inc.*     2,057,763  
      88,000     EMC Corp.*     965,360  
      11,260     Gateway, Inc.*     21,394  
      103,598     Hewlett-Packard Co.     3,281,985  
      57,400     International Business Machines Corp.     4,409,468  
      3,800     Lexmark International, Inc.*     212,154  
      6,600     NCR Corp.*     241,824  
      13,700     Network Appliance, Inc.*     483,610  
      13,200     Nvidia Corp.*     281,028  
      6,800     SanDisk Corp.*     346,664  
      131,500     Sun Microsystems, Inc.*     545,725  
                 
 
                  14,646,255  
   
    Construction & Engineering – 0.1%
      3,300     Fluor Corp.     306,669  
   
    Construction Materials – 0.1%
      3,700     Vulcan Materials Co.     288,600  
   
    Containers & Packaging – 0.2%
      4,100     Ball Corp.     151,864  
      4,000     Bemis Co., Inc.     122,480  
      5,400     Pactiv Corp.*     133,650  
      3,108     Sealed Air Corp.     161,865  
      4,300     Temple-Inland, Inc.     184,341  
                 
 
                  754,200  
   
    Diversified Financials – 8.5%
      45,600     American Express Co.     2,426,832  
      8,980     Ameriprise Financial, Inc.     401,137  
      11,137     Capital One Financial Corp.     951,657  
      7,300     CIT Group, Inc.     381,717  
      184,140     Citigroup, Inc.     8,882,914  
      22,698     Countrywide Financial Corp.     864,340  
      15,300     E-Trade Financial Corp.*     349,146  
      35,800     Fannie Mae     1,721,980  
      3,300     Federated Investors, Inc. Class B     103,950  
      5,430     Franklin Resources, Inc.     471,378  
      25,500     Freddie Mac     1,453,755  
      16,000     Goldman Sachs Group, Inc.     2,406,880  
      128,625     J.P. Morgan Chase & Co.     5,402,250  
      8,300     Janus Capital Group, Inc.     148,570  
      4,700     Legg Mason, Inc.     467,744  
      19,900     Lehman Brothers Holdings, Inc.     1,296,485  
      34,200     Merrill Lynch & Co., Inc.     2,378,952  
      9,200     Moody’s Corp.     501,032  
      39,734     Morgan Stanley     2,511,586  
      10,300     Principal Financial, Inc.     573,195  
      15,171     SLM Corp.     802,849  
      12,400     State Street Corp.     720,316  
      9,800     T. Rowe Price Group, Inc.     370,538  
      4,352     The Bear Stearns Companies, Inc.     609,628  
      38,000     The Charles Schwab Corp.     607,240  
                 
 
                  36,806,071  
   
    Diversified Telecommunication Services – 3.3%
      14,500     ALLTEL Corp.     925,535  
      144,382     AT&T, Inc.     4,026,814  
      67,000     BellSouth Corp.     2,425,400  
      4,400     CenturyTel, Inc.     163,460  
      12,400     Citizens Communications Co.     161,820  
      5,641     Embarq Corp.*     231,204  
      56,863     Qwest Communications International, Inc.*     460,021  
      110,210     Sprint Nextel Corp.     2,203,098  
      108,330     Verizon Communications, Inc.     3,627,972  
                 
 
                  14,225,324  
   
    Electric Utilities – 2.8%
      24,100     AES Corp.*     444,645  
      6,200     Allegheny Energy, Inc.*     229,834  
      7,500     Ameren Corp.     378,750  
      14,540     American Electric Power Co., Inc.     497,995  
      12,098     CenterPoint Energy, Inc.     151,225  
      8,800     CMS Energy Corp.*     113,872  
      9,000     Consolidated Edison, Inc.     399,960  
      6,550     Constellation Energy Group, Inc.     357,106  
      12,950     Dominion Resources, Inc.     968,531  
      6,800     DTE Energy Co.     277,032  
   
 
The accompanying notes are an integral part of these financial statements.

21

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – (continued)
    Electric Utilities – (continued)
      12,000     Edison International   $ 468,000  
      7,800     Entergy Corp.     551,850  
      24,900     Exelon Corp.     1,415,067  
      12,300     FirstEnergy Corp.     666,783  
      14,900     FPL Group, Inc.     616,562  
      12,700     PG&E Corp.     498,856  
      3,600     Pinnacle West Capital Corp.     143,676  
      14,000     PPL Corp.     452,200  
      8,977     Progress Energy, Inc.     384,844  
      9,300     Public Service Enterprise Group, Inc.     614,916  
      27,400     Southern Co.     878,170  
      8,300     TECO Energy, Inc.     124,002  
      17,080     TXU Corp.     1,021,213  
      15,410     Xcel Energy, Inc.     295,564  
                 
 
                  11,950,653  
   
    Electrical Equipment – 0.5%
      6,100     American Power Conversion Corp.     118,889  
      3,500     Cooper Industries Ltd.     325,220  
      15,300     Emerson Electric Co.     1,282,293  
      6,500     Rockwell Automation, Inc.     468,065  
                 
 
                  2,194,467  
   
    Electronic Equipment & Instruments – 0.4%
      15,824     Agilent Technologies, Inc.*     499,405  
      6,700     Jabil Circuit, Inc.     171,520  
      5,525     Molex, Inc.     185,474  
      4,500     PerkinElmer, Inc.     94,050  
      21,100     Sanmina Corp.*     97,060  
      34,100     Solectron Corp.*     116,622  
      10,016     Symbol Technologies, Inc.     108,073  
      3,200     Tektronix, Inc.     94,144  
      6,200     Thermo Electron Corp.*     224,688  
      3,700     Waters Corp.*     164,280  
                 
 
                  1,755,316  
   
    Energy Equipment & Services – 2.0%
      12,580     Baker Hughes, Inc.     1,029,673  
      11,900     BJ Services Co.     443,394  
      19,100     Halliburton Co.     1,417,411  
      11,700     Nabors Industries Ltd.*     395,343  
      6,400     National-Oilwell Varco, Inc.*     405,248  
      5,000     Noble Corp.     372,100  
      4,100     Rowan Cos., Inc.     145,919  
      43,800     Schlumberger Ltd.     2,851,818  
      12,027     Transocean, Inc.*     966,009  
      13,100     Weatherford International Ltd.*     650,022  
                 
 
                  8,676,937  
   
    Food & Drug Retailing – 1.1%
      30,400     CVS Corp.     933,280  
      16,600     Safeway, Inc.     431,600  
      7,473     SUPERVALU, Inc.     229,421  
      22,900     SYSCO Corp.     699,824  
      26,900     The Kroger Co.     588,034  
      37,500     Walgreen Co.     1,681,500  
      5,300     Whole Foods Market, Inc.     342,592  
                 
 
                  4,906,251  
   
    Food Products – 1.2%
      24,249     Archer-Daniels-Midland Co.     1,000,999  
      7,000     Campbell Soup Co.     259,770  
      19,000     ConAgra Foods, Inc.     420,090  
      4,900     Dean Foods Co.*     182,231  
      13,100     General Mills, Inc.     676,746  
      12,300     H.J. Heinz Co.     507,006  
      9,000     Kellogg Co.     435,870  
      4,800     McCormick & Co., Inc.     161,040  
      27,900     Sara Lee Corp.     446,958  
      6,500     The Hershey Co.     357,955  
      9,800     Tyson Foods, Inc.     145,628  
      8,350     Wm. Wrigley Jr. Co.     378,756  
                 
 
                  4,973,049  
   
    Gas Utilities – 0.2%
      6,700     KeySpan Corp.     270,680  
      1,700     Nicor, Inc.     70,550  
      1,600     Peoples Energy Corp.     57,456  
      9,513     Sempra Energy     432,651  
                 
 
                  831,337  
   
    Healthcare Equipment & Supplies – 1.7%
      7,100     Applera Corp. – Applied Biosystems Group     229,685  
      2,100     Bausch & Lomb, Inc.     102,984  
      24,300     Baxter International, Inc.     893,268  
      9,200     Becton, Dickinson and Co.     562,396  
      9,325     Biomet, Inc.     291,779  
      44,806     Boston Scientific Corp.*     754,533  
      3,800     C.R. Bard, Inc.     278,388  
      4,700     Fisher Scientific International, Inc.*     343,335  
      7,500     IMS Health, Inc.     201,375  
      44,800     Medtronic, Inc.     2,102,016  
      2,000     Millipore Corp.*     125,980  
      5,000     Patterson Cos., Inc.*     174,650  
      13,500     St. Jude Medical, Inc.*     437,670  
      10,800     Stryker Corp.     454,788  
      9,170     Zimmer Holdings, Inc.*     520,123  
                 
 
                  7,472,970  
   
    Healthcare Providers & Services – 2.5%
      20,892     Aetna, Inc.     834,217  
      7,700     AmerisourceBergen Corp.     322,784  
      15,500     Cardinal Health, Inc     997,115  
      16,300     Curemark Rx, Inc.     812,881  
      4,400     CIGNA Corp.     433,444  
      5,800     Coventry Health Care, Inc.*     318,652  
      5,400     Express Scripts, Inc.*     387,396  
      15,200     HCA, Inc.     655,880  
   
 
The accompanying notes are an integral part of these financial statements.

22

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Healthcare Providers & Services – (continued)
      9,300     Health Management Associates, Inc.   $ 183,303  
      6,200     Humana, Inc.*     332,940  
      4,600     Laboratory Corp. of America Holdings*     286,258  
      3,100     Manor Care, Inc.     145,452  
      11,314     McKesson Corp.     534,926  
      6,000     Quest Diagnostics, Inc.     359,520  
      18,650     Tenet Healthcare Corp.*     130,177  
      50,000     UnitedHealth Group, Inc.     2,239,000  
      23,600     WellPoint, Inc.*     1,717,372  
                 
 
                  10,691,317  
   
    Hotels, Restaurants & Leisure – 1.5%
      16,200     Carnival Corp.     676,188  
      4,500     Darden Restaurants, Inc.     177,300  
      6,900     Harrah’s Entertainment, Inc.     491,142  
      12,100     Hilton Hotels Corp.     342,188  
      12,000     International Game Technology     455,280  
      11,900     Marriott International, Inc.     453,628  
      46,100     McDonald’s Corp.     1,548,960  
      28,600     Starbucks Corp.     1,079,936  
      8,000     Starwood Hotels & Resorts Worldwide, Inc.     482,720  
      4,400     Wendy’s International, Inc.     256,476  
      10,120     Yum! Brands, Inc.     508,732  
                 
 
                  6,472,550  
   
    Household Durables – 0.6%
      4,600     Centex Corp.     231,380  
      9,900     D.R. Horton, Inc.     235,818  
      5,400     Fortune Brands, Inc.     383,454  
      2,500     Harman International Industries, Inc.     213,425  
      2,700     KB Home     123,795  
      6,900     Leggett & Platt, Inc.     172,362  
      5,200     Lennar Corp.     230,724  
      10,433     Newell Rubbermaid, Inc.     269,484  
      8,200     Pulte Homes, Inc.     236,078  
      2,300     Snap on Inc.     92,966  
      2,800     The Black & Decker Corp.     236,488  
      2,700     The Stanley Works     127,494  
      2,958     Whirlpool Corp.     244,479  
                 
 
                  2,797,947  
   
    Household Products – 2.2%
      19,000     Colgate-Palmolive Co.     1,138,100  
      17,140     Kimberly Clark Corp.     1,057,538  
      121,478     Procter & Gamble Co.     6,754,177  
      5,700     The Clorox Co.     347,529  
                 
 
                  9,297,344  
   
    Industrial Conglomerates – 4.4%
      28,000     3M Co.     2,261,560  
      385,200     General Electric Co.     12,696,192  
      30,575     Honeywell International, Inc.     1,232,173  
      3,100     Reynolds American, Inc.     357,430  
      4,900     Textron, Inc.     451,682  
      75,237     Tyco International Ltd.     2,069,017  
                 
 
                  19,068,054  
   
    Insurance – 4.6%
      12,100     ACE Ltd.     612,139  
      18,500     Aflac, Inc     857,475  
      3,900     AMBAC Financial Group, Inc.     316,290  
      96,179     American International Group, Inc.     5,679,370  
      11,950     Aon Corp.     416,099  
      6,368     Cincinnati Financial Corp.     299,360  
      13,500     Genworth Financial, Inc.     470,340  
      11,300     Hartford Financial Services Group, Inc.     955,980  
      10,660     Lincoln National Corp.     601,650  
      15,000     Loews Corp     531,750  
      20,500     Marsh & McLennan Cos., Inc.     551,245  
      4,950     MBIA, Inc.     289,823  
      28,000     MetLife, Inc.     1,433,880  
      3,300     MGIC Investment Corp.     214,500  
      29,200     Progressive Corp.     750,732  
      18,300     Prudential Financial, Inc.     1,421,910  
      4,400     Safeco Corp.     247,940  
      23,638     The Allstate Corp.     1,293,708  
      14,800     The Chubb Corp.     738,520  
      25,690     The St. Paul Travelers Cos., Inc.     1,145,260  
      3,700     Torchmark Corp.     224,664  
      11,318     UnumProvident Corp.     205,195  
      6,400     XL Capital Ltd.     392,320  
                 
 
                  19,650,150  
   
    Internet & Catalog Retail – 0.1%
      11,400     Amazon.com, Inc.*     440,952  
   
    Internet Software & Services – 1.4%
      42,800     eBay, Inc.*     1,253,612  
      7,590     Google, Inc.*     3,182,715  
      9,300     VeriSign, Inc.*     215,481  
      46,300     Yahoo!, Inc.*     1,527,900  
                 
 
                  6,179,708  
   
    IT Consulting & Services – 0.9%
      4,500     Affiliated Computer Services, Inc.*     232,245  
      21,300     Automatic Data Processing, Inc.     965,955  
      6,900     Computer Sciences Corp.*     334,236  
      18,900     Electronic Data Systems Corp.     454,734  
      28,449     First Data Corp.     1,281,343  
      12,450     Paychex, Inc.     485,301  
      13,500     Unisys Corp.*     84,780  
                 
 
                  3,838,594  
   
    Leisure Equipment & Products – 0.2%
      3,600     Brunswick Corp.     119,700  
      11,000     Eastman Kodak Co.     261,580  
   
 
The accompanying notes are an integral part of these financial statements.

23

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – (continued)
    Leisure Equipment & Products – (continued)
      6,750     Hasbro, Inc.   $ 122,243  
      14,912     Mattel, Inc.     246,197  
                 
 
                  749,720  
   
    Machinery – 1.6%
      24,800     Caterpillar, Inc.     1,847,104  
      1,700     Cummins, Inc.     207,825  
      8,800     Danaher Corp.     566,016  
      8,600     Deere & Co.     718,014  
      7,500     Dover Corp.     370,725  
      5,500     Eaton Corp.     414,700  
      15,200     Illinois Tool Works, Inc.     722,000  
      12,300     Ingersoll-Rand Co., Ltd.     526,194  
      7,000     ITT Corp.     346,500  
      2,300     Navistar International Corp.*     56,603  
      6,130     PACCAR, Inc.     504,989  
      4,700     Pall Corp.     131,600  
      4,575     Parker Hannifin Corp.     355,020  
                 
 
                  6,767,290  
   
    Media – 3.4%
      28,564     CBS Corp. Class B     772,656  
      18,400     Clear Channel Communications, Inc.     569,480  
      78,478     Comcast Corp.*     2,569,370  
      2,300     Dow Jones & Co., Inc.     80,523  
      8,900     Gannett Co., Inc.     497,777  
      16,900     Interpublic Group of Cos., Inc.*(a)     141,115  
      1,700     Meredith Corp.     84,218  
      5,700     New York Times Co.     139,878  
      88,100     News Corp.     1,689,758  
      6,200     Omnicom Group, Inc.     552,358  
      3,200     The E.W. Scripps Co.     138,048  
      13,300     The McGraw-Hill Companies, Inc.     668,059  
      81,229     The Walt Disney Co.     2,436,870  
      158,398     Time Warner, Inc.     2,740,285  
      9,587     Tribune Co.(a)     310,907  
      8,200     Univision Communications, Inc.*     274,700  
      26,764     Viacom, Inc. Class B*     959,222  
                 
 
                  14,625,224  
   
    Metals & Mining – 1.0%
      32,108     Alcoa, Inc.     1,039,015  
      3,351     Allegheny Technologies, Inc.     232,023  
      6,800     CONSOL Energy, Inc.     317,696  
      6,700     Freeport-McMoRan Copper & Gold, Inc. Series B     371,247  
      16,611     Newmont Mining Corp.     879,220  
      11,500     Nucor Corp.     623,875  
      7,500     Phelps Dodge Corp.     616,200  
      3,920     United States Steel Corp.     274,871  
                 
 
                  4,354,147  
   
    Multi-Utilities – 0.4%
      46,013     Duke Energy Corp.     1,351,402  
      11,200     Dynegy, Inc.*     61,264  
      10,400     NiSource, Inc.     227,136  
                 
 
                  1,639,802  
   
    Multiline Retail – 2.4%
      4,300     Big Lots, Inc.*     73,444  
      17,612     Costco Wholesale Corp.     1,006,174  
      2,300     Dillard’s, Inc.     73,255  
      12,187     Dollar General Corp.     170,374  
      6,100     Family Dollar Stores, Inc.     149,023  
      20,334     Federated Department Stores, Inc.     744,224  
      8,600     J. C. Penney Co., Inc.     580,586  
      12,500     Kohl’s Corp.*     739,000  
      8,200     Nordstrom, Inc.     299,300  
      3,600     Sears Holdings Corp.*     557,424  
      32,000     Target Corp.     1,563,840  
      92,800     Wal-Mart Stores, Inc.     4,470,176  
                 
 
                  10,426,820  
   
    Office Electronics – 0.1%
      33,300     Xerox Corp.*     463,203  
   
    Oil & Gas – 8.0%
      17,158     Anadarko Petroleum Corp.     818,265  
      12,300     Apache Corp.     839,475  
      13,700     Chesapeake Energy Corp.     414,425  
      82,053     Chevron Corp.     5,092,209  
      61,241     ConocoPhillips     4,013,123  
      16,400     Devon Energy Corp.     990,724  
      25,030     El Paso Corp.     375,450  
      9,000     EOG Resources, Inc.     624,060  
      224,160     Exxon Mobil Corp.     13,752,216  
      9,000     Hess Corp.     475,650  
      8,362     Kerr-McGee Corp.     579,904  
      3,800     Kinder Morgan, Inc.     379,582  
      13,356     Marathon Oil Corp.     1,112,555  
      6,000     Murphy Oil Corp.     335,160  
      15,800     Occidental Petroleum Corp.     1,620,290  
      4,900     Sunoco, Inc.     339,521  
      21,900     The Williams Companies, Inc.     511,584  
      22,900     Valero Energy Corp.     1,523,308  
      13,600     XTO Energy, Inc.     602,072  
                 
 
                  34,399,573  
   
    Paper & Forest Products – 0.3%
      18,240     International Paper Co.     589,152  
      4,200     Louisiana-Pacific Corp.     91,980  
      6,598     MeadWestvaco Corp.     184,282  
      9,200     Weyerhaeuser Co.     572,700  
                 
 
                  1,438,114  
   
    Personal Products – 0.2%
      2,950     Alberto-Culver Co. Class B     143,724  
      16,700     Avon Products, Inc.     517,700  
      4,500     Estee Lauder Companies, Inc.     174,015  
                 
 
                  835,439  
   
 
The accompanying notes are an integral part of these financial statements.

24

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND 
                     
Shares Description Value
   
Common Stocks – (continued)
    Pharmaceuticals – 6.6%
      56,500     Abbott Laboratories   $ 2,463,965  
      5,600     Allergan, Inc.     600,656  
      4,000     Barr Pharmaceuticals, Inc.*     190,760  
      73,100     Bristol-Myers Squibb Co.     1,890,366  
      41,800     Eli Lilly & Co.     2,310,286  
      12,000     Forest Laboratories, Inc.*     464,280  
      5,690     Hospira, Inc.*     244,329  
      109,660     Johnson & Johnson     6,570,827  
      9,466     King Pharmaceuticals, Inc.*     160,922  
      11,100     Medco Health Solutions, Inc.*     635,808  
      80,800     Merck & Co., Inc.     2,943,544  
      7,600     Mylan Laboratories, Inc.     152,000  
      271,284     Pfizer, Inc.     6,367,035  
      54,900     Schering-Plough Corp.     1,044,747  
      4,000     Watson Pharmaceuticals, Inc.*     93,120  
      49,900     Wyeth     2,216,059  
                 
 
                  28,348,704  
   
    Real Estate – 0.9%
      3,700     Apartment Investment & Management Co. (REIT)     160,765  
      7,800     Archstone-Smith Trust (REIT)     396,786  
      3,400     Boston Properties, Inc. (REIT)     307,360  
      13,800     Equity Office Properties Trust (REIT)     503,838  
      10,400     Equity Residential Properties Trust (REIT)     465,192  
      7,900     Kimco Realty Corp. (REIT)     288,271  
      6,700     Plum Creek Timber Co., Inc. (REIT)     237,850  
      9,100     ProLogis (REIT)     474,292  
      3,100     Public Storage, Inc. (REIT)     235,290  
      6,700     Simon Property Group, Inc. (REIT)     555,698  
      4,400     Vornado Realty Trust (REIT)     429,220  
                 
 
                  4,054,562  
   
    Road & Rail – 0.8%
      13,452     Burlington Northern
Santa Fe Corp. 		    1,066,071  
      8,100     CSX Corp.     570,564  
      15,300     Norfolk Southern Corp.     814,266  
      9,900     Union Pacific Corp.     920,304  
                 
 
                  3,371,205  
   
    Semiconductor Equipment & Products – 2.7%
      18,000     Advanced Micro Devices, Inc.*     439,560  
      13,600     Altera Corp.*     238,680  
      13,400     Analog Devices, Inc.     430,676  
      58,200     Applied Materials, Inc.     947,496  
      16,250     Broadcom Corp.*     488,313  
      15,216     Freescale Semiconductor, Inc. Class B*     447,350  
      216,000     Intel Corp.     4,093,200  
      7,200     KLA-Tencor Corp.     299,304  
      11,300     Linear Technology Corp.     378,437  
      15,300     LSI Logic Corp.*     136,935  
      11,900     Maxim Integrated Products, Inc.     382,109  
      27,200     Micron Technology, Inc.*     409,632  
      12,400     National Semiconductor Corp.     295,740  
      4,600     Novellus Systems, Inc.*     113,620  
      7,400     PMC-Sierra, Inc.*     69,560  
      6,400     QLogic Corp.*     110,336  
      7,500     Teradyne, Inc.*     104,475  
      57,700     Texas Instruments, Inc.     1,747,733  
      13,100     Xilinx, Inc.     296,715  
                 
 
                  11,429,871  
   
    Software – 3.1%
      22,200     Adobe Systems, Inc.*     673,992  
      8,800     Autodesk, Inc.*     303,248  
      8,100     BMC Software, Inc.*     193,590  
      16,750     CA, Inc.     344,212  
      6,800     Citrix Systems, Inc.*     272,952  
      14,900     Compuware Corp.*     99,830  
      11,300     Electronic Arts, Inc.*     486,352  
      6,300     Intuit Inc.*     380,457  
      324,900     Microsoft Corp.     7,570,170  
      12,000     Novell, Inc.*     79,560  
      144,420     Oracle Corp.*     2,092,646  
      4,140     Parametric Technology Corp.*     52,619  
      38,618     Symantec Corp.*     600,124  
                 
 
                  13,149,752  
   
    Specialty Retail – 2.0%
      5,372     AutoNation, Inc.*     115,176  
      1,900     AutoZone, Inc.*     167,580  
      10,700     Bed Bath & Beyond, Inc.*     354,919  
      15,050     Best Buy Co., Inc.     825,342  
      5,800     Circuit City Stores, Inc.     157,876  
      12,600     Limited Brands, Inc.     322,434  
      28,800     Lowe’s Companies, Inc.     1,747,296  
      10,600     Office Depot, Inc.*     402,800  
      2,800     OfficeMax, Inc.     114,100  
      5,300     RadioShack Corp.     74,200  
      26,900     Staples, Inc.     654,208  
      19,950     The Gap, Inc.     347,130  
      76,697     The Home Depot, Inc.     2,744,985  
      4,300     The Sherwin-Williams Co.     204,164  
      17,100     The TJX Companies, Inc.     390,906  
      5,400     Tiffany & Co.     178,308  
                 
 
                  8,801,424  
   
    Textiles & Apparel – 0.3%
      14,000     Coach, Inc.*     418,600  
      4,100     Jones Apparel Group, Inc.     130,339  
      4,000     Liz Claiborne, Inc.     148,240  
      7,000     Nike, Inc. Class B     567,000  
      3,200     VF Corp.     217,344  
                 
 
                  1,481,523  
   
 
The accompanying notes are an integral part of these financial statements.

25

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                     
Shares Description Value
   
Common Stocks – (continued)
    Tobacco – 1.4%
      77,300     Altria Group, Inc.   $ 5,676,139  
      5,800     UST, Inc.     262,102  
                 
 
                  5,938,241  
   
    Trading Companies & Distributors – 0.1%
      6,250     Genuine Parts Co.     260,375  
      2,900     W.W. Grainger, Inc.     218,167  
                 
 
                  478,542  
   
    TOTAL COMMON STOCKS
    (Cost $342,040,510)   $ 426,003,993  
   
                             
Principal Interest Maturity
Amount Rate Date
Value
 
   
U.S. Government Agency Obligation – 0.1%
    United States Treasury Bills(c)
    $ 500,000       4.73 %   09/07/2006   $ 495,533  
    (Cost $495,533)        
   
   
Repurchase Agreement(b) – 0.7%
    Joint Repurchase Agreement Account II
    $ 2,800,000       5.28 %   07/03/2006   $ 2,800,000  
    Maturity Value:  $2,801,231
    (Cost $2,800,000)        
   
    TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
    (Cost $345,336,043)       $ 429,299,526  
   
                     
Shares Description Value
 
   
Securities Lending Collateral – 0.2%
      868,350     Boston Global Investment Trust – Enhanced Portfolio   $ 868,350  
    (Cost $868,350)        
   
    TOTAL INVESTMENTS – 99.9%
    (Cost $346,204,393)   $ 430,167,876  
   
    OTHER ASSETS IN EXCESS OF LIABILITIES – 0.1%     344,347  
   
    NET ASSETS – 100.0%   $ 430,512,223  
   

  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) All or portion of security is on loan.
 
 (b) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment information appears on page 39.
 
 (c) Security is segregated as collateral for initial margin requirement on futures transactions.
             
   
    Investment Abbreviations:
    AMBAC   —   Insured by American Municipal Bond Assurance Corp.
    REIT   —   Real Estate Investment Trust
   
ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At June 30, 2006, the following futures contracts were open as follows:

                                 
Number of Settlement Unrealized
Type Contracts Long Month Market Value Gain
S & P 500 Index
    83       September 2006     $ 5,309,510     $ 135,026  
 
The accompanying notes are an integral part of these financial statements.

26

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND 

Schedule of Investments

June 30, 2006 (Unaudited)
                                 
Principal Interest Maturity
Amount Rate Date
Value
   
Corporate Bonds – 15.6%
    Automotive – 0.2%
    DaimlerChrysler NA
    $ 550,000       8.500 %     01/18/31     $ 622,752  
   
    Banks – 4.7%
    Asian Development Bank
      5,000,000       0.000       10/01/15       3,339,348  
    Commonwealth Bank of Australia(a)(b)
      475,000       6.024       03/29/49       452,432  
    Greater Bay Bancorp Series B
      500,000       5.250       03/31/08       493,984  
    MUFG Capital Finance 1 Ltd.(b)
      850,000       6.346       07/29/49       819,902  
    Nordbanken AB(a)(b)
      2,100,000       8.950       11/29/49       2,281,404  
    PNC Funding Corp.
      2,000,000       5.750       08/01/06       2,000,122  
    Popular North America, Inc.
      1,425,000       5.650       04/15/09       1,412,890  
    Resona Bank Ltd.(a)(b)
      1,250,000       5.850       04/15/49       1,162,968  
    Tokai Preferred Capital Co. LLC(a)(b)
      1,250,000       9.980       12/29/49       1,340,910  
    Wachovia Capital Trust III(b)
      650,000       5.800       08/29/49       630,761  
                             
 
                              13,934,721  
   
    Electric – 1.7%
    Calenergy, Inc.
      1,250,000       7.520       09/15/08       1,299,509  
    CenterPoint Energy, Inc. Series B
      1,000,000       7.250       09/01/10       1,041,146  
    MidAmerican Energy Holdings Co.(a)
      400,000       6.125       04/01/36       373,912  
    Pacific Gas & Electric Co.
      1,800,000       6.050       03/01/34       1,699,509  
    Progress Energy, Inc.
      475,000       7.750       03/01/31       529,821  
                             
 
                              4,943,897  
   
    Energy – 0.2%
    Amerada Hess Corp.
      675,000       7.125       03/15/33       700,052  
   
    Entertainment – 0.3%
    Time Warner Entertainment Co.
      750,000       8.375       03/15/23       834,249  
   
    Environmental – 0.3%
    Waste Management, Inc.
      750,000       7.375       08/01/10       791,829  
   
    Financial Companies – 1.1%
    GATX Financial Corp.
      1,000,000       8.875       06/01/09       1,067,413  
    PHH Corp.
      1,225,000       6.000       03/01/08       1,219,469  
    Residential Capital Corp.
      1,000,000       6.125       11/21/08       988,411  
                             
 
                              3,275,293  
   
    Food & Beverage – 0.5%
    Nabisco, Inc.
      1,000,000       7.050       07/15/07       1,013,569  
    Tyson Foods, Inc.
      550,000       8.250       10/01/11       582,264  
                             
 
                              1,595,833  
   
    Gaming – 0.5%
    Harrahs Operating Co., Inc.
      1,710,000       5.375       12/15/13       1,580,797  
    Park Place Entertainment Corp.
      11,000       8.500       11/15/06       11,098  
                             
 
                              1,591,895  
   
    Home Construction – 0.1%
    D. R. Horton, Inc.
      325,000       6.875       05/01/13       324,229  
   
    Life Insurance – 0.8%
    Phoenix Life Insurance Co.(a)
      450,000       7.150       12/15/34       440,872  
    Reinsurance Group of America, Inc.(b)
      1,000,000       6.750       12/15/65       918,838  
    ZFS Finance USA Trust I(a)(b)
      1,000,000       6.150       12/15/65       958,071  
                             
 
                              2,317,781  
   
    Media - Cable – 0.6%
    Cox Communications, Inc.
      1,750,000       4.625       01/15/10       1,671,104  
   
    Media - Non Cable(a) – 0.2%
    Viacom, Inc.
      300,000       5.750       04/30/11       294,665  
      275,000       6.875       04/30/36       265,392  
                             
 
                              560,057  
   
    Pipelines – 0.2%
    Enterprise Products Operating LP
      450,000       5.600       10/15/14       425,994  
      325,000       5.000       03/01/15       293,493  
                             
 
                              719,487  
   
    Property/Casualty Insurance – 1.4%
    AON Capital Trust A
      500,000       8.205       01/01/27       539,393  
    Arch Capital Group Ltd.
      475,000       7.350       05/01/34       483,478  
                                 
   
 
The accompanying notes are an integral part of these financial statements.

27

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                                 
Principal Interest Maturity
Amount Rate Date
Value
   
Corporate Bonds – (continued)
    Property/Casualty Insurance – (continued)
    Aspen Insurance Holdings Ltd.
    $ 400,000       6.000 %     08/15/14     $ 371,733  
    Endurance Specialty Holdings Ltd.
      1,000,000       6.150       10/15/15       936,089  
    Liberty Mutual Group(a)
      700,000       6.500       03/15/35       611,231  
    Marsh & McLennan Cos., Inc.
      600,000       5.150       09/15/10       579,140  
      650,000       5.750       09/15/15       613,585  
                             
 
                              4,134,649  
   
    REITs – 0.4%
    iStar Financial, Inc. Series B
      1,300,000       5.700       03/01/14       1,253,335  
   
    Tobacco – 0.3%
    Altria Group, Inc.
      700,000       7.750       01/15/27       785,455  
   
    Wireless Telecommunications – 1.1%
    America Movil SA de CV
      1,000,000       5.500       03/01/14       929,620  
    AT&T Wireless Services, Inc.
      500,000       8.750       03/01/31       609,788  
    GTE Corp.
      750,000       7.510       04/01/09       779,555  
    Nextel Communications, Inc.
      900,000       6.875       10/31/13       913,806  
                             
 
                              3,232,769  
   
    Wirelines Telecommunications – 1.0%
    Deutsche Telekom International Finance BV
      700,000       8.250       06/15/30       808,497  
    Embarq Corp.
      450,000       7.995       06/01/36       452,296  
    Sprint Capital Corp.
      1,000,000       6.875       11/15/28       1,006,619  
    Telecom Italia Capital
      800,000       4.950       09/30/14       716,206  
                             
 
                              2,983,618  
   
    TOTAL CORPORATE BONDS
    (Cost $48,347,513)           $ 46,273,005  
   
   
Mortgage-Backed Obligations – 43.7%
    Adjustable Rate FHLMC(b) – 2.3%
    $ 299,689       6.500 %     12/01/31     $ 302,695  
      2,846,125       4.847       09/01/35       2,782,540  
      3,857,404       4.730       10/01/35       3,714,955  
                             
 
                              6,800,190  
   
    Adjustable Rate FNMA(b) – 4.9%
      3,000,006       4.438       05/01/33       2,960,950  
      1,861,079       3.851       10/01/33       1,825,611  
      3,315,136       4.592       05/01/35       3,273,426  
      3,643,859       5.355       09/01/35       3,590,313  
      2,857,099       4.925       12/01/35       2,790,680  
                             
 
                              14,440,980  
   
    Adjustable Rate Non-Agency(b) – 4.6%
    Countrywide Alternative Loan Trust Series 2005-59, Class 1A2A
      1,446,043       5.647       11/20/35       1,450,855  
    Indymac Index Mortgage Loan Trust Series 2006-AR2, Class 1A1A
      2,432,198       5.543       04/25/46       2,434,151  
    Indymac Index Mortgage Loan Trust Series 2006-AR4 Class A1A
      2,454,429       5.533       05/25/46       2,454,429  
    Luminent Mortgage Trust Series 2006-2, Class A1A
      2,453,764       5.523       02/25/46       2,455,921  
    Merrill Lynch Mortgage Investors, Inc. Series 2005-A9, Class 2A1C
      3,000,000       5.175       12/25/35       2,910,577  
    Washington Mutual, Inc. Series 2005-AR10, Class 1A3
      2,000,000       4.839       09/25/35       1,920,760  
                             
 
                              13,626,693  
   
    CMBS – 7.9%
    Interest Only(b)(e) – 4.0%
    Banc of America Commercial Mortgage, Inc. Series 2005-6, Class A4
      3,000,000       5.182       09/10/47       2,866,593  
    GE Capital Commercial Mortgage Corp. Series 2005-C4, Class A4
      3,000,000       5.333       11/10/45       2,895,376  
    Morgan Stanley Capital I Series 2006-T21, Class A4
      3,500,000       5.162       10/12/52       3,320,958  
    Wachovia Bank Commercial Mortgage Trust Series 2005-C21, Class A4
      3,000,000       5.370       10/15/44       2,869,993  
                             
 
                              11,952,920  
   
    Sequential Fixed Rate – 3.9%
    Bear Stearns Commercial Mortgage Securities Series 1999-WF2 Class A2
      2,700,000       7.080       07/15/31       2,784,707  
    GE Capital Commercial Mortgage Corp. Series 2002-1A, Class A3
      2,700,000       6.269       12/10/35       2,761,070  
    J.P. Morgan Chase Commercial Mortgage Securities Corp. Series 2005-LDP2 Class A4
      1,500,000       4.738       07/15/42       1,379,808  
    LB-UBS Commercial Mortgage Trust Series 2006-C1, Class A4
      2,000,000       5.156       02/15/31       1,890,234  
   
 
The accompanying notes are an integral part of these financial statements.

28

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND 
                                 
Principal Interest Maturity
Amount Rate Date
Value
   
Mortgage-Backed Obligations – (continued)
    Sequential Fixed Rate – (continued)
    Morgan Stanley Dean Witter Capital I Series 2003-TOP9 Class A2
    $ 2,700,000       4.740 %     11/13/36     $ 2,544,198  
                             
 
                              11,360,017  
   
    TOTAL CMBS           $ 23,312,937  
   
    CMOS – 1.8%
    Interest Only – 0.0%
    FNMA Series 2004-71, Class DI
      737,220       0.000       04/25/34       50,474  
   
    PAC – 1.5%
    FHLMC
      4,472,853       6.500       10/01/34       4,517,511  
   
    Sequential Fixed Rate – 0.3%
    FHLMC Series 2473, Class VM
      698,915       6.000       10/15/07       698,706  
   
    TOTAL CMOS           $ 5,266,691  
   
    FHLB – 6.3%
      10,129       7.500       01/01/07       10,167  
      150,619       7.000       08/01/10       153,144  
      300       7.000       09/01/11       306  
      18,911       7.000       11/01/11       19,294  
      41,056       7.000       12/01/11       41,887  
      160,951       7.500       06/01/15       167,625  
      364,784       7.000       07/01/16       374,129  
      1,939,031       5.500       02/01/18       1,908,495  
      274,679       5.500       09/01/18       270,353  
      2,080       7.500       10/01/18       2,088  
      32,058       9.500       08/01/19       34,402  
      267,290       5.000       02/01/20       257,218  
      1,277       9.500       08/01/20       1,374  
      439,366       6.500       10/01/20       442,984  
      34,678       9.500       02/01/21       37,084  
      3,399,884       5.000       06/01/23       3,216,432  
      48,853       6.500       01/01/24       49,331  
      328,328       6.500       12/01/27       333,603  
      175,171       6.000       03/01/29       173,313  
      2,250       6.000       04/01/29       2,228  
      366,000       6.500       12/01/31       369,565  
      4,091       6.000       08/01/32       4,047  
      547,893       7.000       12/01/32       561,581  
      3,770,650       5.500       11/01/33       3,640,973  
      4,630,512       5.500       01/01/34       4,471,264  
      2,322,823       5.000       03/01/34       2,177,620  
                             
 
                              18,720,507  
   
    FHLMC – 8.1%
      141,024       5.500       04/01/18       138,803  
      1,206,444       4.500       12/01/18       1,141,108  
      4,225,972       5.000       12/01/18       4,077,043  
      643,427       4.000       02/01/19       594,191  
      831,537       4.000       04/01/19       767,510  
      1,328,475       4.000       05/01/19       1,226,186  
      2,192,937       4.000       06/01/19       2,024,159  
      5,708,907       5.000       11/01/19       5,507,717  
      53,680       5.000       05/15/21       53,442  
      100,600       7.500       12/01/29       104,199  
      7,996       7.500       11/01/30       8,262  
      855,287       7.000       05/01/32       876,656  
      779,027       6.000       08/01/33       770,147  
      5,000,000       4.500       TBA-15yr (c)     4,723,440  
      2,000,000       5.500       TBA-15yr (c)     1,920,624  
                             
 
                              23,933,487  
   
    FNMA – 6.8%
      23,535       6.500       05/01/08       23,846  
      8,194       8.500       07/01/08       8,315  
      1,808       8.000       04/01/09       1,827  
      4,834       9.000       02/01/10       4,834  
      108,534       6.000       08/01/13       108,919  
      68,103       7.500       01/01/14       68,472  
      516,623       7.500       08/01/15       536,168  
      136,466       6.000       04/01/16       136,943  
      262,973       6.500       05/01/16       266,611  
      391,181       6.500       09/01/16       396,593  
      514,182       6.500       11/01/16       521,295  
      127,683       6.000       12/01/16       128,146  
      978,167       6.000       02/01/17       981,591  
      200,852       7.500       04/01/17       207,846  
      1,497,360       6.000       10/01/17       1,502,601  
      1,270,660       5.500       02/01/18       1,250,326  
      1,410,231       5.000       05/01/18       1,362,638  
      140,390       6.500       08/01/18       141,533  
      566,325       7.000       08/01/18       582,291  
      5,000,000       4.000       09/01/18       4,621,848  
      754       7.000       07/01/25       773  
      30,010       7.500       10/01/25       31,134  
      14,247       7.000       11/01/25       14,639  
      97,839       9.000       11/01/25       106,207  
      4,985       7.000       08/01/27       5,112  
      29,201       7.000       09/01/27       29,945  
      1,173       7.000       01/01/28       1,205  
      7,039       7.500       03/01/28       7,274  
      965,131       6.000       02/01/29       955,639  
      561,651       6.000       03/01/29       555,732  
      224,556       6.500       03/01/29       226,873  
      476,463       6.000       05/01/29       471,491  
      57,452       6.500       05/01/29       58,037  
      1,377,286       6.000       06/01/29       1,362,913  
      354,018       6.500       06/01/29       357,646  
      156,140       6.500       07/01/29       157,730  
      305,039       6.500       08/01/29       308,186  
      7,954       7.000       09/01/29       8,155  
      150,690       6.500       10/01/29       152,247  
      133,308       8.000       10/01/29       140,841  
      189,771       6.500       11/01/29       191,732  
      162,209       6.500       12/01/29       163,860  
   
 
The accompanying notes are an integral part of these financial statements.

29

 

Schedule of Investments (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND
                                 
Principal Interest Maturity
Amount Rate Date Value
   
Mortgage-Backed Obligations – (continued)
    FNMA – (continued)
    $ 64,495       7.000 %     12/01/29     $ 66,202  
      20,518       7.500       12/01/29       21,272  
      9,446       7.500       04/01/30       9,760  
      6,267       8.500       04/01/30       6,730  
      69,743       7.500       05/01/30       72,092  
      13,574       8.000       05/01/30       14,316  
      747       8.500       06/01/30       792  
      13,463       7.500       08/01/30       13,910  
      42,324       7.500       09/01/30       43,731  
      326,129       6.500       04/01/31       329,190  
      63,372       7.000       05/01/32       64,955  
      458,724       7.000       06/01/32       470,022  
      570,096       7.000       08/01/32       584,137  
      183,707       8.000       08/01/32       193,930  
                             
 
                              20,051,053  
   
    GNMA – 1.1%
      1,136       6.500       09/15/08       1,142  
      105,015       7.000       03/15/12       107,016  
      69,227       7.000       06/15/23       71,398  
      23,151       7.000       10/15/25       23,901  
      45,278       7.000       11/15/25       46,745  
      4,816       7.000       02/15/26       4,973  
      22,927       7.000       04/15/26       23,650  
      9,933       7.000       03/15/27       10,261  
      1,440       7.000       06/15/27       1,483  
      26,579       7.000       10/15/27       27,384  
      219,793       7.000       11/15/27       226,787  
      12,940       7.000       01/15/28       13,331  
      86,486       7.000       02/15/28       89,102  
      47,815       7.000       03/15/28       49,331  
      14,942       7.000       04/15/28       15,416  
      2,051       7.000       05/15/28       2,114  
      38,745       7.000       06/15/28       39,916  
      66,983       7.000       07/15/28       69,013  
      179,305       7.000       08/15/28       184,725  
      67,880       7.000       09/15/28       70,017  
      15,254       7.000       11/15/28       15,715  
      6,380       7.500       11/15/30       6,621  
      4,430       7.000       10/15/31       4,563  
      1,513       7.000       12/15/31       1,561  
      131,018       7.500       10/15/32       136,929  
      2,036,502       6.000       08/20/34       2,018,695  
                             
 
                              3,261,789  
   
    TOTAL MORTGAGE-BACKED OBLIGATIONS
    (Cost $132,500,937)           $ 129,414,327  
   
   
Agency Debentures – 27.8%
    FHLB
    $ 16,000,000       4.000 %     03/10/08     $ 15,620,432  
      10,000,000       4.570       10/17/08       9,811,840  
      10,000,000       5.823       05/06/09       10,100,580  
      1,800,000       4.000       12/30/11       1,671,079  
      6,990,000       4.875       12/14/12       6,753,633  
      5,000,000       4.750       11/14/14       4,747,350  
    FHLMC
      3,305,000       4.250       02/28/07       3,277,175  
      3,800,000       4.500       08/22/07       3,756,826  
    FNMA
      7,500,000       3.000       03/02/07       7,376,220  
      10,000,000       3.860       02/22/08       9,747,540  
      5,000,000       4.500       06/01/10       4,818,395  
    Tennessee Valley Authority
      2,960,000 †     4.875 (e)     12/15/06       2,912,959  
      2,000,000       5.375       04/01/56       1,889,920  
   
    TOTAL AGENCY DEBENTURES
    (Cost $83,914,837)           $ 82,483,949  
   
   
Asset-Backed Securities – 0.0%
    Home Equity – 0.0%
    Green Tree Home Improvement Loan Trust Series 1996-D Class HEM2
    $ 72,744       8.300 %     09/15/27     $ 72,811  
   
    Manufactured Housing – 0.0%
    Conseco Finance Securitizations Corp. Series 2000-6 Class A4
      2,566       6.770       09/01/32       2,566  
   
    TOTAL ASSET-BACKED SECURITIES
    (Cost $75,542)           $ 75,377  
   
 
   
U.S. Treasury Obligations – 11.7%
    United States Treasury Bonds
    $ 4,100,000       4.875 %     05/15/09     $ 4,072,133  
      6,000,000       4.500       02/28/11       5,850,468  
    United States Treasury Inflation Protected Securities
      1,199,231       2.000       01/15/14       1,157,539  
      1,139,215       1.875       07/15/15       1,080,477  
      1,522,410       2.000       01/15/16       1,453,842  
    United States Treasury Principal-Only Stripped Securities(f)
      23,600,000       0.000       11/15/21       10,429,548  
      8,000,000       0.000       11/15/24       3,025,280  
      9,400,000       0.000       02/15/25       3,508,550  
      1,300,000       0.000       08/15/25       473,815  
      10,000,000       0.000       11/15/26       3,425,520  
   
    TOTAL U.S. TREASURY OBLIGATIONS
    (Cost $35,386,837)           $ 34,477,172  
   
    TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT – 98.8%
    (Cost $300,225,666)           $ 292,723,830  
   
 
The accompanying notes are an integral part of these financial statements.

30

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND 
                                 
Principal Interest Maturity
Amount Rate Date Value
   
Repurchase Agreement(g) – 4.3%
    Joint Repurchase Agreement Account II
    $ 12,800,000       5.276 %     07/03/06     $ 12,800,000  
    Maturity Value:  $12,805,628
    (Cost $12,800,000)        
   
    TOTAL INVESTMENTS – 103.1%
    (Cost $313,025,666)   $ 305,523,830  
   
    LIABILITIES IN EXCESS OF        
    OTHER ASSETS – (3.1)%     (9,056,676 )
   
    NET ASSETS – 100.0%   $ 296,467,154  
   

  The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets.

 
 (a) Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Under procedures approved by the Board of Trustees, such securities have been determined to be liquid by the Investment Adviser and may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounts to $8,181,857, which represents approximately 2.8% of net assets as of June 30, 2006.
 
 (b) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2006.
 
 (c) TBA (To Be Announced) Securities are purchased on a forward commitment basis with an approximate principal amount and no defined maturity date. The actual principal and maturity date will be determined upon settlement when the specific mortgage pools are assigned. Total market value of TBA securities amounts to $6,644,064 which represents approximately 2.2% of net assets as of June 30, 2006.
 
 (d) Represents security with notional or nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.
 
 (e) Securities with “Put” features with resetting interest rates. Maturity dates disclosed are the next interest reset dates.
 
 (f) Security issued with a zero coupon. Income is recognized through the accretion of discount.
 
 (g) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment information appears on page 39.
             
   
    Investment Abbreviations:
    CMBS   —   Commercial Mortgage Backed Securities
    CMO   —   Collateralized Mortgage Obligations
    FHLB   —   Federal Home Loan Bank
    FHLMC   —   Federal Home Loan Mortgage Corp.
    FNMA   —   Federal National Mortgage Association
    GNMA   —   Government National Mortgage Association
    PAC   —   Planned Amortization Class
    REIT   —   Real Estate Investment Trust
   
 
The accompanying notes are an integral part of these financial statements.

31

 

Schedule of Investments (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At June 30, 2006, the following futures contacts were open as follows:

                             
Number of
Contracts Settlement Unrealized
Type Long/(Short) Month Market Value Gain (Loss)
Eurodollars
    24     September 2006   $ 5,665,200     $ (10,882 )
U.S. Treasury Bonds
    (236)     September 2006     (25,170,875 )     194,277  
2 Year U.S. Treasury Notes
    138     September 2006     27,983,813       (91,791 )
5 Year U.S. Treasury Notes
    152     September 2006     15,717,750       (71,233 )
10 Year U.S. Treasury Notes
    195     September 2006     20,447,578       (94,449 )
                $ 44,643,466     $ (74,078 )
 
The accompanying notes are an integral part of these financial statements.

32

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND 

ADDITIONAL INVESTMENT INFORMATION (continued)

FOREIGN CURRENCY CONTRACTS — At June 30, 2006, the Fund had outstanding forward foreign currency exchange contracts, both to purchase and sell foreign currencies as follows:
                                         
Unrealized
Open Forward Foreign Currency Expiration Value on
Purchase Contracts Date Settlement Date Current Value Gain Loss
Australian Dollar
    09/20/2006     $ 724,818     $ 729,884     $ 5,066     $ —  
Australian Dollar
    09/20/2006       1,182,000       1,175,006       —       6,994  
Canadian Dollar
    09/20/2006       627,604       631,197       3,593       —  
Euro
    09/20/2006       3,062,000       3,102,594       40,594       —  
Great Britain Pound
    09/20/2006       935,000       944,092       9,092       —  
Great Britain Pound
    09/20/2006       234,000       233,428       —       572  
Japanese Yen
    09/20/2006       700,000       701,941       1,941       —  
New Zealand Dollar
    09/20/2006       469,000       459,631       —       9,369  
Norwegian Krone
    09/20/2006       4,905,070       4,869,257       —       35,813  
Swedish Krona
    09/20/2006       1,666,863       1,687,851       20,988       —  
Swiss Franc
    09/20/2006       4,529,116       4,568,407       39,291       —  
TOTAL OPEN FORWARD
FOREIGN CURRENCY
PURCHASE CONTRACTS 		  $ 19,035,471     $ 19,103,288     $ 120,565     $ 52,748  
                                         
Unrealized
Open Forward Foreign Currency Expiration Value on
Sale Contracts Date Settlement Date Current Value Gain Loss
Australian Dollar
    09/20/2006     $ 941,000     $ 947,271     $ —     $ 6,271  
Canadian Dollar
    09/20/2006       2,354,000       2,341,225       12,775       —  
Euro
    09/20/2006       7,757,908       7,881,647       —       123,739  
Great Britain Pound
    09/20/2006       3,443,055       3,454,446       —       11,391  
Japanese Yen
    09/20/2006       946,000       943,675       2,325       —  
Japanese Yen
    09/20/2006       2,459,191       2,482,769       —       23,578  
New Zealand Dollar
    09/20/2006       4,516,728       4,420,230       96,498       —  
Norwegian Krone
    09/20/2006       942,000       939,243       2,757       —  
Norwegian Krone
    09/20/2006       232,000       235,382       —       3,382  
Swedish Krona
    09/20/2006       704,000       717,875       —       13,875  
Swiss Franc
    09/20/2006       463,000       471,968       —       8,968  
TOTAL OPEN FORWARD
FOREIGN CURRENCY
SALE CONTRACTS 		  $ 24,758,882     $ 24,835,731     $ 114,355     $ 191,204  
 
The accompanying notes are an integral part of these financial statements.

33

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GOVERNMENT INCOME FUND

Schedule of Investments

June 30, 2006 (Unaudited)
                             
Principal Interest Maturity
Amount Rate Date Value
   
Mortgage-Backed Obligations – 64.6%
    Adjustable Rate FHLMC(a) – 2.0%
    $ 948,708       4.847 %   09/01/35   $ 927,513  
      964,351       4.730     10/01/35     928,739  
                         
 
                          1,856,252  
   
    Adjustable Rate FNMA(a) – 4.9%
      1,000,002       4.438     05/01/33     986,983  
      930,540       3.851     10/01/33     912,805  
      1,657,568       4.592     05/01/35     1,636,713  
      952,366       4.925     12/01/35     930,227  
                         
 
                          4,466,728  
   
    Adjustable Rate Non-Agency – 8.6%
    Bear Stearns Commercial Mortgage Securities
      500,000       5.712     09/11/38     496,303  
    Citigroup Commercial Mortgage Trust(a)
      500,000       5.721     03/15/49     495,727  
    Citigroup/Deutsche Bank Commercial Mortgage Trust(a)
      1,000,000       5.400     07/15/44     958,650  
    Commercial Mortgage Pass Through Certificates Series 2006-C7, Class A4(a)
      1,000,000       5.769     06/10/46     995,241  
    Countrywide Alternative Loan Trust Series 2005-59, Class 1A2A(a)
      964,029       5.647     11/20/35     967,237  
    Indymac Index Mortgage Loan Trust Series 2006-AR2, Class 1A1A(a)
      972,879       5.543     04/25/46     973,661  
    Luminent Mortgage Trust Series 2006-2, Class A1A(a)
      981,505       5.523     02/25/46     982,368  
    Merrill Lynch Mortgage Investors, Inc. Series 2005-A9, Class 2A1C(a)
      1,000,000       5.179     12/25/35     970,193  
    Washington Mutual, Inc. Series 2005-AR10, Class 1A3(a)
      1,000,000       4.839     09/25/35     960,380  
                         
 
                          7,799,760  
   
    FHLMC – 19.1%
      3,656       7.500     02/01/07     3,671  
      2,056,992       4.500     12/01/18     1,945,594  
      257,371       4.000     02/01/19     237,676  
      332,614       4.000     04/01/19     307,004  
      531,411       4.000     05/01/19     490,494  
      877,171       4.000     06/01/19     809,661  
      1,735,560       4.500     06/01/19     1,641,569  
      3,083       8.000     06/01/19     3,097  
      16,382       10.000     03/01/21     17,694  
      33,889       6.500     06/01/23     34,519  
      1,509,253       6.500     10/01/34     1,524,322  
      9,000,000       4.500     TBA-15yr (b)     8,502,192  
      1,000,000       5.000     TBA-15yr (b)     962,188  
      1,000,000       5.500     TBA-15yr (b)     960,312  
                         
 
                          17,439,993  
   
    FNMA – 10.3%
      11,853       7.500     03/01/07   $ 11,918  
      1,085       8.000     04/01/09     1,096  
      103,188       5.000     11/01/17     99,608  
      445,273       5.000     12/01/17     429,821  
      394,084       5.000     01/01/18     380,411  
      1,123,904       5.000     02/01/18     1,084,907  
      327,588       5.000     03/01/18     316,213  
      515,379       5.000     04/01/18     497,472  
      193,769       5.000     05/01/18     187,038  
      1,025,824       5.000     06/01/18     990,183  
      31,368       5.000     07/01/18     30,278  
      2,000,000       4.000     09/01/18     1,848,739  
      643,307       5.000     11/01/18     620,956  
      918,328       5.000     12/01/18     886,422  
      1,058,692       5.000     04/01/19     1,021,908  
      985,367       5.000     06/01/19     951,131  
      29,489       8.000     09/01/21     31,063  
                         
 
                          9,389,164  
   
    GNMA – 0.0%
      4,423       6.500     06/15/09     4,460  
      20,799       7.000     06/15/12     21,387  
                         
 
                          25,847  
   
    CMOs – 19.6%
    Interest Only(a)(c)(d) – 0.1%
    FNMA Series 2004-47, Class EI
      465,845       0.000     06/25/34     28,678  
    FNMA Series 2004-62, Class DI
      195,617       0.000     07/25/33     12,471  
                         
 
                          41,149  
   
    PAC – 18.7%
    FNMA Series 2003-32, Class PD
      7,000,000       4.000     07/25/22     6,878,746  
    FNMA Series 2003-70, Class BS
      5,812,335       4.000     04/25/22     5,705,202  
    FNMA Series 2719, Class GC
      4,580,000       5.000     06/15/26     4,457,580  
                         
 
                          17,041,528  
   
    Principal Only(d)(f)(e) – 0.9%
    FHLMC Series 235, Class PO        
      586,908       0.000     02/01/36     398,729  
    FNMA Series 363, Class 1
      571,708       0.000     11/01/35     388,992  
                         
 
                          787,721  
   
    TOTAL CMOs       $ 17,870,398  
   
    TOTAL MORTGAGE-BACKED OBLIGATIONS
    (Cost $59,891,683)   $ 58,848,142  
   
 
The accompanying notes are an integral part of these financial statements.

34

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GOVERNMENT INCOME FUND 
                             
Principal Interest Maturity
Amount Rate Date Value
 
   
Agency Debentures – 25.4%
    FHLB
    $ 7,000,000       3.500 %   04/06/09   $ 6,639,115  
      4,500,000       4.000     12/19/11     4,145,630  
      9,500,000       4.000     12/30/11     8,819,582  
    FNMA
      3,000,000       3.860     02/22/08     2,924,262  
    Tennessee Valley Authority
      700,000       5.375     04/01/56     661,472  
   
    TOTAL AGENCY DEBENTURES
    (Cost $23,917,617)   $ 23,190,061  
   
 
   
U.S. Treasury Obligations – 9.2%
    United States Treasury Bonds
    $ 3,900,000       4.500 %   02/15/09   $ 3,838,302  
    United States Treasury Inflation Protected Securities
      436,084       2.000     01/15/14     420,923  
      414,260       1.875     07/15/15     392,901  
      304,482       2.000     01/15/16     290,768  
    United States Treasury Principal-Only Stripped Securities(f)
      3,600,000       0.000     11/15/21     1,590,948  
      2,000,000       0.000     11/15/22     837,496  
      900,000       0.000     08/15/25     328,026  
      1,900,000       0.000     11/15/26     650,849  
   
    TOTAL U.S. TREASURY OBLIGATIONS
    (Cost $8,524,473)   $ 8,350,213  
   
    TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT – 99.2%
    (Cost $92,333,773)   $ 90,388,416  
   
 
   
Repurchase Agreement(g) – 13.7%
    Joint Repurchase Agreement Account II
    $ 12,500,000       5.276 %   07/03/06   $ 12,500,000  
    Maturity Value:  $12,505,496
    (Cost $12,500,000)            
   
    TOTAL INVESTMENTS – 112.9%
    (Cost $104,833,773)   $ 102,888,416  
   
    LIABILITIES IN EXCESS OF OTHER ASSETS – (12.9)%     (11,762,033 )
   
    NET ASSETS – 100.0%   $ 91,126,383  
   

  The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets.

 
 (a) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2006.
 
 (b) TBA (To Be Announced) Securities are purchased on a forward commitment basis with an approximate principal amount and no defined maturity date. The actual principal and maturity date will be determined upon settlement when the specific mortgage pools are assigned. Total market value of TBA securities amounts to $10,424,692 which represents approximately 11.4% of net assets as of June 30, 2006.
 
 (c) Represents security with notional or nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.
 
 (d) Securities not registered under the Securities Act of 1933, as amended. Such securities have been determined to be illiquid by the Investment Adviser. At June 30, 2006, these securities amounted to $828,870 or approximately 1.0% of net assets.
 
 (e) Security issued with a zero coupon. Income is recognized through the accretion of discount.
 
 (f) Principal only securities represent the right to receive monthly payments of principal on an underlying pool of mortgages.
 
 (g) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment information appears on page 39.
             
   
    Investment Abbreviations:
    CMO   —   Collateralized Mortgage Obligations
    FHLB   —   Federal Home Loan Bank
    FHLMC   —   Federal Home Loan Mortgage Corp.
    FNMA   —   Federal National Mortgage Association
    GNMA   —   Government National Mortgage Association
    PAC   —   Planned Amortization Class
   
 
The accompanying notes are an integral part of these financial statements.

35

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST GOVERNMENT INCOME FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At June 30, 2006, the following futures contracts were open as follows:

                             
Number of Settlement Unrealized
Type Contracts Long (Short) Month Market Value Gain (Loss)
Eurodollars
    10     September 2006   $ 2,360,500     $ (4,534 )
U.S. Treasury Bonds
    13     September 2006     1,386,531       (3,460 )
2 Year U.S. Treasury Notes
    85     September 2006     17,236,406       (61,869 )
5 Year U.S. Treasury Notes
    (81 )   September 2006     (8,375,906 )     49,453  
10 Year U.S. Treasury Notes
    64     September 2006     6,711,000       (49,792 )
               
                $ 19,318,531     $ (70,202 )
 
The accompanying notes are an integral part of these financial statements.

36

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MONEY MARKET FUND 

Schedule of Investments

June 30, 2006 (Unaudited)
                                 
Principal Interest Maturity Amortized
Amount Rate Date Cost
   
Bank Note – 1.4%
    National City Bank
    $ 3,000,000       4.79 %     01/16/2007     $ 3,000,000  
   
   
Certificate of Deposit – 4.7%
    Citibank, N.A.
    $ 10,000,000       5.20 %     08/31/2006     $ 10,000,000  
   
   
Commercial Paper and Corporate Obligations – 36.1%
    Bear Stearns Cos., Inc
    $ 5,000,000       5.32 %     07/03/2006     $ 4,998,522  
    CRC Funding LLC
      5,000,000       5.05       07/25/2006       4,983,167  
    Danske Corp.
      4,625,000       5.35       08/24/2006       4,587,885  
    FCAR Owner Trust Series II
      5,000,000       5.15       07/12/2006       4,992,132  
    Fountain Square Commercial Funding Corp.
      5,000,000       5.29       08/18/2006       4,964,733  
    Galleon Capital LLC
      5,000,000       5.20       08/09/2006       4,971,833  
    General Electric Capital Corp.
      5,000,000       5.19       09/06/2006       4,951,704  
    Grampian Funding LLC
      5,494,000       5.13       08/29/2006       5,447,809  
    Kitty Hawk Funding Corp.
      7,000,000       5.20       07/17/2006       6,983,822  
    KLIO Funding Corp.
      5,000,000       5.27       07/20/2006       4,986,106  
    Nordeutsche Landesbank Luxembourg
      7,700,000       4.96       07/10/2006       7,690,452  
    Park Granada LLC
      5,000,000       5.06       07/13/2006       4,991,567  
    Svenska Handlesbanken, Inc.
      7,000,000       5.36       08/22/2006       6,945,805  
    Ticonderoga Funding LLC
      5,000,000       5.15       07/12/2006       4,992,132  
   
    TOTAL COMMERCIAL PAPER AND CORPORATE OBLIGATIONS   $ 76,487,669  
   
   
Extendables(a) – 9.4%
    IBM Corp.(c)
    $ 10,000,000       5.14 %     07/09/2007     $ 10,000,000  
    Merrill Lynch & Co., Inc.
      2,000,000       5.18       07/16/2007       2,000,000  
    Nordea Bank AB(c)
      4,000,000       5.15       07/12/2007       4,000,000  
    Wells Fargo & Co
      4,000,000       5.09       07/03/2007       4,000,000  
   
    TOTAL EXTENDABLES   $ 20,000,000  
   
   
U.S. Government Agency Obligation – 2.4%
    FNMA
      5,000,000       4.00       08/08/2006       5,000,000  
   
   
Variable Rate Obligations(a) – 10.8%
    Caterpillar Financial Services Corp.
    $ 7,864,000       5.14 %     07/10/2006     $ 7,864,000  
    Credit Suisse First Boston, Inc.
      5,000,000       5.14       05/18/2007       5,000,000  
    Lehman Brothers Holdings, Inc.
      5,000,000       5.20       06/26/2007       5,000,000  
    National City Bank of Indiana
      5,000,000       4.98       04/04/2007       4,999,976  
   
    TOTAL VARIABLE RATE OBLIGATIONS   $ 22,863,976  
   
   
Yankee Certificates of Deposit – 6.6%
    DePfa Bank Europe PLC
    $ 10,000,000       5.34 %     08/08/2006     $ 10,000,000  
    Deutsche Bank AG
      2,000,000       4.80       01/29/2007       2,000,000  
    Deutsche Bank AG
      2,000,000       5.09       02/28/2007       2,000,000  
   
    TOTAL YANKEE CERTIFICATES OF DEPOSIT   $ 14,000,000  
   
    TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT – 71.4%   $ 151,351,645  
   
 
The accompanying notes are an integral part of these financial statements.

37

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST MONEY MARKET FUND
 
Schedule of Investments (continued)
June 30, 2006 (Unaudited)
                                 
Principal Interest Maturity
Amount Rate Date Value
   
Repurchase Agreements(b) – 28.7%
    Joint Repurchase Agreement Account II
    $ 60,800,000       5.28 %     07/03/2006     $ 60,800,000  
    Maturity Value:  $60,826,732
    (Cost $60,800,000)        
   
    TOTAL INVESTMENTS – 100.1%   $ 212,151,645  
   
    LIABILITIES IN EXCESS OF OTHER ASSETS – (0.1)%     (120,221 )
   
    NET ASSETS – 100.0%   $ 212,031,424  
   

  The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets.

 
 (a) Variable or floating rate security index is based on either Federal Funds, U.S. Treasury Bill, or LIBOR.
 
 (b) Joint repurchase agreement was entered into on June 30, 2006. Additional Investment information appears on page 39.
 
 (c) Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Under procedures approved by the Board of Trustees, such securities have been determined to be liquid by the Investment Advisor and may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounts to $14,000,000, which represents approximately 6.6% of net assets as of June 30, 2006.

  Maturity dates represent either the stated date on the security or the next interest reset date for floating rate securities.

             
   
    Investment Abbreviation:
    FNMA—Federal National Mortgage Association
   
 
The accompanying notes are an integral part of these financial statements.

38

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST 

ADDITIONAL INVESTMENT INFORMATION

JOINT REPURCHASE AGREEMENT ACCOUNT II — At June 30, 2006, the Funds had undivided interests in the Joint Repurchase Agreement Account II, as follows:

         
Principal
Fund Amount
Growth Opportunities
  $ 400,000  
Equity Index
    2,800,000  
Core Fixed Income
    12,800,000  
Government Income
    12,500,000  
Money Market
    60,800,000  
                                 
Principal Interest Maturity Maturity
Repurchase Agreements Amount Rate Date Value
Banc of America Securities LLC
  $ 2,860,000,000       5.30%       07/03/2006     $ 2,861,263,167  
Barclays Capital PLC
    1,500,000,000       5.32       07/03/2006       1,500,665,000  
Bear Stearns
    500,000,000       5.31       07/03/2006       500,221,250  
Deutsche Bank Securities, Inc.
    1,000,000,000       5.20       07/03/2006       1,000,433,333  
Greenwich Capital Markets
    300,000,000       5.32       07/03/2006       300,133,000  
J.P. Morgan Securities, Inc.
    400,000,000       5.28       07/03/2006       400,176,000  
Merrill Lynch
    500,000,000       5.25       07/03/2006       500,218,750  
Morgan Stanley & Co.
    3,000,000,000       5.25       07/03/2006       3,001,312,500  
UBS Securities LLC
    1,050,000,000       5.25       07/03/2006       1,050,459,375  
UBS Securities LLC
    475,000,000       5.30       07/03/2006       475,209,792  
UBS Securities LLC
    400,000,000       5.34       07/03/2006       400,178,000  
Wachovia Capital Markets
    250,000,000       5.26       07/03/2006       250,109,583  
TOTAL
   $ 12,235,000,000                     $ 12,240,379,750  
    At June 30, 2006, the Joint Repurchase Agreement Account II was fully collateralized by Federal Home Loan Bank, 0.00% to 11.00%, due 07/07/2006 to 04/20/2016; Federal Home Loan Mortgage Association, 3.00% to 8.50%, due 02/01/2007 to 07/01/2036; Federal National Mortgage Association, 0.00% to 10.50%, due 02/01/2007 to 07/01/2036; and U.S. Treasury Bonds, 5.00% to 7.14%, due 11/13/2008 to 10/20/2018. The aggregate market value of the collateral, including accrued interest, was $12,492,409,737.  
 
The accompanying notes are an integral part of these financial statements.

39

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST

Statements of Assets and Liabilities

June 30, 2006 (Unaudited)
               
Growth
Opportunities
Fund
 
    Assets:
   
Investment in securities, at value (identified cost $236,077,381, $345,336,043, $313,025,666, $92,333,773 and $151,351,645, respectively — including $10,693,260, $845,616, $0, $0, and $0 of securities on loan respectively
  $ 228,891,867  
   
Repurchase Agreement at value (cost $0, $0, $0, $12,500,000 and $60,800,000 respectively)
    —  
   
Securities lending collateral, at value (cost $10,962,000, $868,350, $0, $0, and $0, respectively)
    10,962,000  
   
Cash(a)
    3,366  
   
Foreign currencies, at value (identified cost $1,015, $0, $0, $0, $0, respectively)
    1,006  
   
Receivables:
       
     
Investment securities sold
    —  
     
Dividends and interest, at value
    64,888  
     
Variation margin
    —  
     
Forward foreign currency exchange contracts, at value
    —  
     
Reimbursement from adviser
    14,884  
     
Securities lending income
    1,470  
   
   
Total assets
     239,939,481  
   
    Liabilities:
   
Payables:
       
     
Investment securities purchased
    —  
     
Payable upon return of securities loaned
    10,962,000  
     
Fund shares repurchased
    153,394  
     
Amounts owed to affiliates
    214,268  
     
Variation margin
    —  
     
Forward foreign currency exchange contracts, at value
    —  
   
Accrued expenses
    49,725  
   
   
Total liabilities
     11,379,387  
   
    Net Assets:
   
Paid-in capital
    145,452,947  
   
Accumulated undistributed net investment income (loss)
    (755,544 )
   
Accumulated net realized gain (loss) on investment, futures and foreign currency related transactions
    91,048,214  
   
Net unrealized gain (loss) on investments, futures and transactions of assets and liabilities denominated in foreign currencies
    (7,185,523 )
   
   
NET ASSETS
   $ 228,560,094  
   
   
Total shares of beneficial interest outstanding, $0.001 par value (unlimited number of shares authorized)
    23,961,491  
   
Net asset value, offering and redemption price per share:
  $ 9.54  
   
 
(a) Includes restricted cash of $44,968, and $63,930, relating to initial margin requirements and collateral on futures transactions for the Core Fixed Income and Government Income Funds, respectively.
 
The accompanying notes are an integral part of these financial statements.

40

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST 

                                 
Equity Core Fixed Government Money
Index Fund Income Fund Income Fund Market Fund
 
     
    $ 429,299,526     $ 305,523,830     $ 90,388,416     $ 151,351,645  
      —       —       12,500,000       60,800,000  
      868,350       —       —       —  
      167,586       226,858       211,971       5,975  
      —       —       —       —  
      1,307,048       9,415,586       10,484,375       —  
      491,278       2,225,345       384,510       559,462  
      —       191,887       160,293       —  
      —       234,920       —       —  
      5,301       26,415       20,276       13,958  
      723       —       —       —  
   
      432,139,812       317,844,841       114,149,841       212,731,040  
   
     
      —       20,668,865       22,771,014       —  
      868,350       —       —       —  
      528,487       219,193       116,692       544,651  
      120,515       133,137       51,515       90,291  
      13,280       —       —       —  
      —       243,952       —       —  
      96,957       112,540       84,237       64,674  
   
      1,627,589       21,377,687       23,023,458       699,616  
   
     
      488,065,206       314,130,024       97,276,970       212,033,292  
      3,538,745       101,990       45,450       —  
      (145,190,237 )     (10,179,914 )     (4,180,478 )     (1,868 )
      84,098,509       (7,584,946 )     (2,015,559 )     —  
   
    $ 430,512,223     $ 296,467,154     $ 91,126,383     $ 212,031,424  
   
      43,258,380       30,580,475       9,343,031       212,031,424  
    $ 9.95     $ 9.69     $ 9.75     $ 1.00  
   
 
The accompanying notes are an integral part of these financial statements.

41

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST

Statements of Operations

For the Six Months Ended June 30, 2006 (Unaudited)
               
Growth
Opportunities
Fund
 
    Investment income:
   
Dividends(a)
  $ 646,846  
   
Interest (including securities lending income of $5,991, $7,422, $0, $0 and $0, respectively)
    65,640  
   
   
Total income
     712,486  
   
    Expenses:
   
Management fees
    1,277,003  
   
Distribution and Service fees
    315,673  
   
Custody and accounting fees
    45,549  
   
Transfer agent fees
    48,554  
   
Professional fees
    25,158  
   
Printing fees
    12,323  
   
Trustee fees
    7,347  
   
Other
    7,110  
   
   
Total expenses
     1,738,717  
   
   
Less — expense reductions
    (270,687 )
   
   
Net expenses
     1,468,030  
   
   
NET INVESTMENT INCOME (LOSS)
     (755,544 )
   
    Realized and unrealized gain (loss) on investment, futures and foreign currency related transactions:
   
Net realized gain (loss) from:
       
     
Investment transactions
    86,622,265  
     
Futures transactions
    —  
     
Foreign currency related transactions
    31,561  
   
Net change in unrealized gain (loss) on:
       
     
Investments
    (88,282,487 )
     
Futures
    —  
     
Translation of assets and liabilities denominated in foreign currencies
    (9 )
   
   
Net realized and unrealized gain (loss) on investment, futures and foreign currency related transactions
     (1,628,670 )
   
   
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
   $ (2,384,214 )
   
 
(a) For the Growth Opportunities Fund, foreign taxes withheld on dividends were $91.
 
 The accompanying notes are an integral part of these financial statements.

42

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST 

                                 
Equity Core Fixed Government Money
Index Fund Income Fund Income Fund Market Fund
 
     
    $ 4,350,257     $ —     $ —     $ —  
      114,631       7,880,937       2,242,253       5,167,049  
   
      4,464,888       7,880,937       2,242,253       5,167,049  
   
     
      688,956       632,544       262,181       380,820  
      574,130       388,660       120,177       269,881  
      131,586       113,899       69,478       34,254  
      88,308       59,781       18,485       41,511  
      25,773       25,408       24,807       24,878  
      12,323       12,323       12,323       12,323  
      7,347       7,347       7,347       7,347  
      7,110       7,110       7,110       7,110  
   
      1,535,533       1,247,072       521,908       778,124  
   
      (571,984 )     (382,718 )     (187,168 )     (238,972 )
   
      963,549       864,354       334,740       539,152  
   
      3,501,339       7,016,583       1,907,513       4,627,897  
   
     
      13,675,692       (5,259,930 )     (1,624,539 )     —  
      (306,620 )     (119,246 )     (82,502 )     —  
      —       (269,882 )     —       —  
      (4,399,159 )     (4,421,826 )     (452,998 )     —  
      135,026       (74,078 )     (70,202 )     —  
      —       (9,032 )     —       —  
   
      9,104,939       (10,153,994 )     (2,230,241 )     —  
   
    $ 12,606,278     $ (3,137,411 )   $ (322,728 )   $ 4,627,897  
   
 
The accompanying notes are an integral part of these financial statements. 

43

 

 GOLDMAN SACHS VARIABLE INSURANCE TRUST

Statements of Changes in Net Assets

                     
Growth Opportunities Fund
For the
Six Months Ended For the
June 30, 2006 Year Ended
(Unaudited) December 31, 2005
 
    From operations:
   
Net investment income (loss)
  $ (755,544 )   $ (1,385,951 )
   
Net realized gain (loss) from investment, futures and foreign currency related transactions
    86,653,826       40,227,353  
   
Net change in unrealized gain (loss) on investments, futures and translation of assets and liabilities denominated in foreign currency
    (88,282,496 )     (2,140,031 )
   
   
Net increase (decrease) in net assets resulting from operations
     (2,384,214 )     36,701,371  
   
    Distributions to shareholders:
   
From net investment income
    —       —  
   
From net realized gain
    —       (66,125,528 )
   
Tax return of capital
    —       —  
   
   
Total distributions to shareholders
     —       (66,125,528 )
   
    From share transactions:
   
Proceeds from sales of shares
    101,279       1,523,762  
   
Reinvestment of dividends and distributions
    —       66,125,528  
   
Cost of shares repurchased
    (42,980,000 )     (63,757,175 )
   
   
Net increase (decrease) in net assets resulting from share transactions
     (42,878,721 )     3,892,115  
   
   
TOTAL DECREASE
     (45,262,935 )     (25,532,042 )
   
    Net assets:
   
Beginning of period
    273,823,029       299,355,071  
   
   
End of period
  $ 228,560,094     $ 273,823,029  
   
   
Accumulated undistributed net investment income (loss)
   $ (755,544 )   $ —  
   
    Summary of share transactions:
   
Shares sold
    10,000       668,774  
   
Impact of conversion of shares due to merger
    (105,942,206 )     —  
   
Shares issued on reinvestment of dividends and distributions
    —       31,789,823  
   
Shares repurchased
    (4,912,110 )     —  
   
   
NET INCREASE (DECREASE)
     (110,844,316 )     32,458,597  
   
 
The accompanying notes are an integral part of these financial statements.

44

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST 

                                                                 
Equity Index Fund Core Fixed Income Fund Government Income Fund Money Market Fund
For the For the For the For the
Six Months Ended For the Six Months Ended For the Six Months Ended For the Six Months Ended For the
June 30, 2006 Year Ended June 30, 2006 Year Ended June 30, 2006 Year Ended June 30, 2006 Year Ended
(Unaudited) December 31, 2005 (Unaudited) December 31, 2005 (Unaudited) December 31, 2005 (Unaudited) December 31, 2005
 
     
    $ 3,501,339     $ 7,153,922     $ 7,016,583     $ 14,804,890     $ 1,907,513     $ 3,645,011     $ 4,627,897     $ 6,625,258  
      13,369,072       604,471       (5,649,058 )     (42,163 )     (1,707,041 )     (291,847 )     —       (1,868 )
      (4,264,133 )     13,306,879       (4,504,936 )     (8,164,069 )     (523,200 )     (1,607,735 )     —       —  
   
      12,606,278       21,065,272       (3,137,411 )     6,598,658       (322,728 )     1,745,429       4,627,897       6,623,390  
   
     
      —       (7,221,232 )     (6,429,234 )     (17,062,085 )     (1,885,903 )     (3,996,071 )     (4,627,897 )     (6,646,008 )
      —       —       —       —       —       —       —       —  
      —       —       —       —       —       —       —       (56,233 )
   
      —       (7,221,232 )     (6,429,234 )     (17,062,085 )     (1,885,903 )     (3,996,071 )     (4,627,897 )     (6,702,241 )
   
     
      26,957       15,944,208       4,229,548       13,661,274       3,677,954       3,171,313       65,594,857       109,105,489  
      —       7,221,232       6,429,234       17,062,085       1,885,903       3,996,071       4,427,150       6,702,241  
      (71,708,105 )     (142,459,001 )     (37,485,959 )     (89,617,770 )     (14,997,553 )     (31,008,367 )     (80,206,318 )     (158,191,711 )
   
      (71,681,148 )     (119,293,561 )     (26,827,177 )     (58,894,411 )     (9,433,696 )     (23,840,983 )     (10,184,311 )     (42,383,981 )
   
      (59,074,870 )     (105,449,521 )     (36,393,822 )     (69,357,838 )     (11,642,327 )     (26,091,625 )     (10,184,311 )     (42,462,832 )
   
     
      489,587,093       595,036,614       332,860,976       402,218,814       102,768,710       128,860,335       222,215,735       264,678,567  
   
    $ 430,512,223     $ 489,587,093     $ 296,467,154     $ 332,860,976     $ 91,126,383     $ 102,768,710     $ 212,031,424     $ 222,215,735  
   
    $ 3,538,745     $ 37,406     $ 101,990     $ (485,359 )   $ 45,450     $ 23,840     $ —     $ —  
   
     
      2,653       6,111,008       423,738       12,685,160       371,977       2,946,864       65,594,857       109,105,487  
      (127,249,407 )     —       (281,251,666 )     —       (85,825,236 )     —       —       —  
      —       2,707,229       660,251       15,973,918       192,723       3,735,449       4,427,150       6,702,241  
      (8,061,972 )     (53,625,297 )     (4,517,602 )     (83,108,605 )     (2,216,563 )     (28,811,809 )     (80,206,318 )     (158,191,711 )
   
      (135,308,726 )     (44,807,060 )     (284,685,279 )     (54,449,527 )     (87,477,099 )     (22,129,496 )     (10,184,311 )     (42,383,983 )
   
 
The accompanying notes are an integral part of these financial statements.

45

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GROWTH OPPORTUNITIES FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                 
Ratios
assuming
Income (loss) from Distributions to no expense
investment operations shareholders reductions
Net Ratio of Ratio of
Net asset realized From Net asset Net assets Ratio of net investment total
value, Net and Total from net value, at end net expenses loss expenses Portfolio
beginning investment unrealized investment realized Total end of Total of period to average to average to average turnover
of period loss(a) gain (loss) operations gains distributions period return(b) (in 000s) net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)(c)
    2006   $ 9.69     $ (0.03 )   $ (0.12 )   $ (0.15 )   $ —     $ —     $ 9.54       (1.50 )%   $ 228,560       1.16 % (d)(f)     (0.60 )% (d)(e)     1.37 % (d)(f)     117 %    
    For the Years ended December 31,(c)
    2005     10.90       (0.05 )     1.54       1.49       (2.70 )     (2.70 )     9.69       14.68       273,823       1.15       (0.50 )     1.15       27      
    2004     10.13       (0.07 )     1.78       1.71       (0.94 )     (0.94 )     10.90       18.62       299,355       1.14       (0.70 )     1.15       38      
    2003     7.25       (0.07 )     2.95       2.88       —       —       10.13       39.71       296,204       1.11       (0.70 )     1.13       46      
    2002     9.25       (0.07 )     (1.93 )     (2.00 )     —       —       7.25       (21.60 )     287,593       1.05       (0.70 )     1.06       41      
    2001     10.12       (0.05 )     (0.09 )     (0.14 )     (0.73 )     (0.73 )     9.25       (1.14 )     435,864       0.93       (0.51 )     0.94       44      
   

(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 and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than one full year are not annualized. The Goldman Sachs Growth Opportunities Fund first began operations as the Allmerica Select Capital Appreciation Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance prior to January 9, 2006 is that of the Predecessor AIT Fund. Total return information of the Predecessor AIT Fund is provided in the above table because the Predecessor AIT Fund is considered the accounting survivor of the reorganization. As part of the reorganization, the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund.
(c)  The Goldman Sachs Growth Opportunities Fund (“the Fund”) first began operations as the Allmerica Select Capital Appreciation Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust and is the accounting survivor. The financial highlights for the Growth Opportunities Fund as set forth here to include the historical financial highlights of the Allmerica Select Capital Appreciation Fund. In connection with such acquisition, the Goldman Sachs Growth Opportunities Fund issued service classes to the former shareholders of the Allmerica Select Capital Appreciation Fund at $10.00 per share. Historical per-share amounts prior to the Fund reorganization have been adjusted to reflect the conversion ratio utilized for the reorganization.
(d)  Annualized.
(e)  Ratio of Net Investment Income assuming no expense reductions is (0.81)%.
(f)  Expense ratio includes the affect of operating expenses of the Predecessor Fund prior to Reorganization.

The accompanying notes are an integral part of these financial statements.

 
46

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST EQUITY INDEX FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                         
Ratios
assuming
no
Income (loss) from expense
investment operations Distributions to shareholders reductions
Net Ratio of Ratio of
Net asset realized From Net asset Net assets, Ratio of net investment total
value, Net and Total from From net net value, end net expenses income expenses Portfolio
beginning investment unrealized investment investment realized Total end of Total of period to average to average to average turnover
of period income(a) gain (loss) operations income gains distributions period return(b) (in 000s) net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)(c)
    2006   $ 9.71     $ 0.08     $ 0.16     $ 0.24     $ —     $ —     $ —     $ 9.95       2.48 %   $ 430,512       0.42 % (d)(f)     1.52 % (d)(e)     0.67 % (d)(f)     2 %    
    For the Years ended December 31,(c)
    2005     9.43       0.13       0.28       0.41       (0.13 )     —       (0.13 )     9.71       4.38       489,587       0.52       1.35       0.52       7      
    2004     8.69       0.14       0.74       0.88       (0.14 )     —       (0.14 )     9.43       10.32       595,037       0.50       1.53       0.52       4      
    2003     6.88       0.10       1.81       1.91       (0.10 )     —       (0.10 )     8.69       27.83       666,455       0.45       1.37       0.50       23      
    2002     9.62       0.10       (2.19 )     (2.09 )     (0.10 )     (0.55 )     (0.65 )     6.88       (22.22 )     342,683       0.45       1.16       0.47       10      
    2001     11.68       0.11       (1.49 )     (1.38 )     (0.10 )     (0.58 )     (0.68 )     9.62       (12.02 )     517,315       0.32       1.02       0.34       21      
   

(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 and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than one full year are not annualized. The Goldman Sachs Equity Index Fund first began operations as the Allmerica Equity Index Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance prior to January 9, 2006 is that of the Predecessor AIT Fund. Total return information of the Predecessor AIT Fund is provided in the above table because the Predecessor AIT Fund is considered the accounting survivor of the reorganization. As part of the reorganization, the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund.
(c)  The Goldman Sachs Equity Index Fund (“the Fund”) first began operations as the Allmerica Equity Index Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust and is the accounting survivor. The financial highlights for the Equity Index Fund as set forth here to include the historical financial highlights of the Allmerica Equity Index Fund. In connection with such acquisition, the Goldman Sachs Equity Index Fund issued service classes to the former shareholders of the Allmerica Equity Index Fund at $10.00 per share. Historical per-share amounts prior to the Fund reorganization have been adjusted to reflect the conversion ratio utilized for the reorganization.
(d)  Annualized.
(e)  Ratio of Net Investment Income assuming no expense reductions is 1.27%.
(f)  Expense ratio includes the affect of operating expenses of the Predecessor Fund prior to Reorganization.

The accompanying notes are an integral part of these financial statements.

 
47

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST CORE FIXED INCOME FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                         
Ratios
assuming
Income (loss) from no expense
investment operations Distributions to shareholders reductions
Net Ratio of Ratio of
Net asset realized From Net asset Net assets, Ratio of net investment total
value, Net and Total from From net net value, end of net expenses income expenses Portfolio
beginning investment unrealized investment investment realized Total end of Total period to average to average to average turnover
of period income(a) gain (loss) operations income gains distributions period return(b) (in 000s) net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)(c)
    2006   $ 9.98     $ 0.22     $ (0.30 )   $ (0.08 )   $ (0.21 )   $ —     $ (0.21 )   $ 9.69       (0.84 )%   $ 296,467       0.55 % (d)(f)     4.50 %(d)(e)     0.80 % (d)(f)     115 %    
    For the Years ended December 31,(c)
    2005     10.29       0.42       (0.24 )     0.18       (0.49 )     —       (0.49 )     9.98       1.84       332,861       0.64       4.05       0.64       110      
    2004     10.58       0.41       —       0.41       (0.56 )     (0.14 )     (0.70 )     10.29       3.98       402,219       0.64       3.78       0.64       113      
    2003     10.72       0.38       (0.03 )     0.35       (0.49 )     —       (0.49 )     10.58       3.31       530,199       0.63       3.42       0.63       192      
    2002     10.46       0.51       0.32       0.83       (0.57 )     —       (0.57 )     10.72       8.14       620,074       0.58       4.85       0.58       130      
    2001     10.27       0.61       0.19       0.80       (0.61 )     —       (0.61 )     10.46       7.94       571,582       0.47       5.79       0.47       114      
   

(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 and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than one full year are not annualized. The Goldman Sachs Core Fixed Income Fund first began operations as the Allmerica Select Investment Grade Income Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance prior to January 9, 2006 is that of the Predecessor AIT Fund. Total return information of the Predecessor AIT Fund is provided in the above table because the Predecessor AIT Fund is considered the accounting survivor of the reorganization. As part of the reorganization, the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund.
(c)  The Goldman Sachs Core Fixed Income Fund (“the Fund”) first began operations as the Allmerica Select Investment Grade Income Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust and is the accounting survivor. The financial highlights for the Core Fixed Income Fund as set forth here to include the historical financial highlights of the Allmerica Select Investment Grade Income Fund. In connection with such acquisition, the Goldman Sachs Core Fixed Income Fund issued service classes to the former shareholders of the Allmerica Select Investment Grade Income Fund at $10.00 per share. Historical per-share amounts prior to the Fund reorganization have been adjusted to reflect the conversion ratio utilized for the reorganization.
(d)  Annualized.
(e)  Ratio of Net Investment Income assuming no expense reductions is 4.25%.
(f)  Expense ratio includes the affect of operating expenses of the Predecessor Fund prior to Reorganization.

The accompanying notes are an integral part of these financial statements.

 
48

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST GOVERNMENT INCOME FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                                 
Ratios
assuming
no
Income (loss) from Distributions to expense
investment operations shareholders reductions
Net Ratio of Ratio of
Net asset Net realized Net asset Net assets, Ratio of net investment total
value, investment and Total from From net value, end of net expenses income (loss) expenses Portfolio
beginning income unrealized investment investment Total end of Total period to average to average to average turnover
of period (loss)(a) gain (loss) operations income distributions period return(b) (in 000s) net assets net assets net assets rate
 
    For the Six Months ended June 30, (Unaudited)(c)
    2006   $ 9.98     $ 0.20     $ (0.23 )   $ (0.03 )   $ (0.20 )   $ (0.20 )   $ 9.75       (0.32 )%   $ 91,126       0.69 % (d)(f)     3.96 %(d)(e)     1.08 % (d)(f)     153 %    
    For the Years ended December 31,(c)
    2005     10.19       0.32       (0.16 )     0.16       (0.37 )     (0.37 )     9.98       1.55       102,769       0.74       3.18       0.74       44      
    2004     10.39       0.28       (0.07 )     0.21       (0.41 )     (0.41 )     10.19       2.12       128,860       0.73       3.02       0.73       77      
    2003     10.63       0.28       (0.10 )     0.18       (0.42 )     (0.42 )     10.39       1.67       20,018       0.71       2.82       0.71       55      
    2002     10.13       0.39       0.54       0.93       (0.42 )     (0.42 )     10.63       9.28       291,995       0.68       3.48       0.68       79      
    2001     9.89       0.46       0.28       0.74       (0.50 )     (0.50 )     10.13       7.63       116,514       0.58       4.52       0.58       190      
   

(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 and a complete redemption of the investment at the net asset value at the end of the period. Total returns for periods less than one full year are not annualized. The Goldman Sachs Government Income Fund first began operations as the Allmerica Government Bond Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance prior to January 9, 2006 is that of the Predecessor AIT Fund. Total return information of the Predecessor AIT Fund is provided in the above table because the Predecessor AIT Fund is considered the accounting survivor of the reorganization. As part of the reorganization, the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment objectives and policies which were not identical to the Predecessor AIT Fund.
(c)  The Goldman Sachs Government Income Fund (“the Fund”) first began operations as the Allmerica Government Bond Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust and is the accounting survivor. The financial highlights for the Government Income Fund as set forth here to include the historical financial highlights of the Allmerica Government Bond Fund. In connection with such acquisition, the Goldman Sachs Government Income Fund issued service classes to the former shareholders of the Allmerica Government Bond Fund at $10.00 per share. Historical per-share amounts prior to the Fund reorganization have been adjusted to reflect the conversion ratio utilized for the reorganization.
(d)  Annualized.
(e)  Ratio of Net Investment Income assuming no expense reductions is 3.57%.
(f)  Expense ratio includes the affect of operating expenses of the Predecessor Fund prior to Reorganization.

The accompanying notes are an integral part of these financial statements.

 
49

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST MONEY MARKET FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period
                                                                                                 
Ratios
assuming
no
Income (loss) from Distributions to expense
investment operations shareholders reductions
Ratio of Ratio of
Net asset Net asset Net assets, Ratio of net investment total
value, Net Total from From net value, end of net expenses income expenses
beginning investment investment investment Total end of Total period to average to average to average
of period income(a) operations income distributions period return(b) (in 000s) net assets net assets net assets
 
    For the Six Months ended June 30, (Unaudited)
    2006   $ 1.00     $ 0.02     $ 0.02     $ (0.02 )   $ (0.02 )   $ 1.00       2.12 %   $ 212,031       0.50 % (c)(e)     4.28 % (c)(d)     0.72 % (c)(e)    
    For the Years ended December 31,
    2005     1.00       0.03       0.03       (0.03 )     (0.03 )     1.00       2.75       222,194       0.55       2.65       0.55      
    2004     1.00       0.01       0.01       (0.01 )     (0.01 )     1.00       0.91       264,679       0.52       0.88       0.52      
    2003     1.00       0.01       0.01       (0.01 )     (0.01 )     1.00       0.80       377,155       0.53       0.82       0.53      
    2002     1.00       0.02       0.02       (0.02 )     (0.02 )     1.00       1.66       704,805       0.45       1.63       0.45      
    2001     1.00       0.04       0.04       (0.04 )     (0.04 )     1.00       4.28       604,657       0.36       4.11       0.36      
   

(a)  Calculated based on the average shares outstanding methodology.
(b)  Assumes investment at the net asset value. Returns for periods less than one full year are not annualized. The Goldman Sachs Money Market Fund first began operations as the Allmerica Money Market Fund (the “Predecessor AIT Fund”) of the Allmerica Investment Trust. On January 9, 2006, the Predecessor AIT Fund was reorganized as a new portfolio of the Goldman Sachs Variable Insurance Trust. Performance prior to January 9, 2006 is that of the Predecessor AIT Fund. Total return information of the Predecessor AIT Fund is provided in the above table because the Predecessor AIT Fund is considered the accounting survivor of the reorganization. As part of the reorganization, the Predecessor AIT Fund changed its investment adviser to Goldman Sachs Asset Management, L.P. In addition, the Goldman Sachs Fund that the Predecessor AIT Fund reorganized into had investment policies which were not identical to the Predecessor AIT Fund.
(c)  Annualized.
(d)  Ratio of Net Investment Income assuming no expense reductions is 4.06%.
(e)  Expense ratio includes the affect of the operating expenses of the Predecessor Fund prior to Reorganization.

The accompanying notes are an integral part of these financial statements.

 
50

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST 

Notes to Financial Statements

June 30, 2006 (Unaudited)

1. ORGANIZATION

Goldman Sachs Variable Insurance 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 Growth Opportunities Fund, Goldman Sachs Equity Index Fund, Goldman Sachs Core Fixed Income Fund, Goldman Sachs Government Income Fund and Goldman Sachs Money Market Fund (collectively, the “Funds” or individually a “Fund”) that were newly organized investment portfolios of the Trust that commenced investment operations on January 9, 2006. The respective Funds are the accounting successors to investment portfolios of Allmerica Investment Trust (“AIT”), which were reorganized into the Funds as follows: AIT Select Capital Appreciation Fund into the Goldman Sachs Growth Opportunities Fund, AIT Equity Index Fund into the Goldman Sachs Equity Index Fund, AIT Select Investment Grade Income Fund into the Goldman Sachs Core Fixed Income Fund, AIT Government Bond Fund into the Goldman Sachs Government Income Fund and the AIT Money Market Fund into the Goldman Sachs Money Market Fund. Each Fund is a diversified portfolio under the Act.
     Shares of the Trust may be purchased and held by separate accounts of participating life insurance companies for the purpose of funding variable annuity contracts and variable life insurance policies. Shares of the Trust are not offered directly to the general public.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting policies consistently followed by the Funds. 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 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 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 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 Funds. Interest income is recorded on the basis of interest accrued, premium amortized and discount accreted.

     Certain mortgage security paydown gains and losses are recorded as interest income (loss) and included in interest income in the accompanying Statements of Operations. Original issue discounts (OID) on debt securities are accreted to interest income over the life of the security with a corresponding increase in the cost basis of that security. Market discounts and market premiums on debt securities are accreted and amortized to interest income (loss) over the expected life of the security with a corresponding adjustment in the cost basis of that security.
     Pursuant to applicable law and procedures adopted by the Trust’s Board of Trustees, securities transactions in portfolio securities (including futures transactions) may be effected from time to time through Goldman Sachs or an affiliate. In order for Goldman Sachs or an affiliate, acting as agent, to effect securities or futures transactions for a Fund, the commissions, fees or other remuneration received by Goldman Sachs or an affiliate must be reasonable and fair compared to the commissions, fees or other remuneration received by other brokers in connection with comparable transactions involving similar securities or futures contracts.
 
51

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

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 or “pro-rata” basis depending upon the nature of the expense.

D. Federal Taxes and Distributions to Shareholders — It is each 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 provisions are required.

     Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions, if any, are declared and paid annually for the Growth Opportunities and Equity Index Funds, quarterly for the Core Fixed Income and Government Income Funds and daily for the Money Market Fund. Capital gains distributions, if any, are declared and paid annually for all Funds.
     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules which may differ from generally accepted accounting principles. Therefore, the source of each Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain, or from tax return of capital.

E. Foreign Currency Translations — The books and records of the Funds are maintained in U.S. dollars. Amounts denominated in foreign currencies are translated into U.S. dollars on the following basis: (i) investment valuations, foreign currency and other assets and liabilities initially expressed in foreign currencies are converted each business day into U.S. dollars based upon current exchange rates; and (ii) purchases and sales of foreign investments, income and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions.

     Net realized and unrealized gain (loss) on foreign currency transactions will represent: (i) foreign exchange gains and losses from the sale and holdings of foreign currencies and the sale and holdings of investments; (ii) currency gains and losses between trade date and settlement date on investment securities transactions and forward exchange contracts; and (iii) gains and losses from the difference between amounts of dividends, interest and foreign withholding taxes recorded and the amounts actually received. The effect of changes in foreign currency exchange rates on securities and derivative instruments are not segregated in the Statement of Operations from the effects of changes in market prices of those securities and derivative instruments, but are included with the net realized and unrealized gain or loss on securities and derivative instruments. Net unrealized foreign exchange gains and losses arising from changes in the value of other assets and liabilities as a result of changes in foreign exchange rates are included as increases and decreases in unrealized appreciation/depreciation on foreign currency related transactions.

F. Segregation Transactions — As set forth in the prospectus, Funds 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 Funds are required to segregate or physically move liquid assets, on the books of their custodian or to respective counterparties, with a current value equal to or greater than the market value of the corresponding transactions.

G. Forward Foreign Currency Exchange Contracts — The Core Fixed Income Fund may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date as a hedge or cross-hedge against either specific transactions or portfolio positions. The Fund may also purchase and sell forward contracts to seek to increase total return. All commitments are “marked-to-market” daily at the applicable translation rates and any resulting unrealized gains or losses are recorded in the Fund’s financial statements. The Fund records realized gains or losses at the time a forward contract is offset by entry into a closing transaction or extinguished by delivery of the currency. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar.

 
52

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST 

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

     The contractual amounts of forward foreign currency exchange contracts do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. At June 30, 2006, the Fund had segregated sufficient cash and/or securities to cover any commitments under these contracts.

H. Futures Contracts — The Funds, except for the Money Market Fund, may enter into futures transactions to hedge against changes in interest rates, securities prices, currency exchange rates or to seek to increase total return. Futures contracts are valued at the last settlement price or in the absence of a sale at the end of each day on the board of trade or exchange upon which they are traded. Upon entering into a futures contract, the last bid price, a Fund is required to deposit with a broker, or the Fund’s custodian bank on behalf of the broker an amount of cash or securities equal to the minimum “initial margin” requirement of the associated futures exchange. Subsequent payments for futures contracts (“variation margin”) are paid or received by the Fund daily, dependent on the daily fluctuations in the value of the contracts, and are recorded for financial reporting purposes as unrealized gains or losses. When contracts are closed, the Fund realizes a gain or loss which is reported in the Statement of Operations.

     The use of futures contracts involve, to varying degrees, elements of market and counterparty risk which may exceed the amounts recognized in the Statement of Assets and Liabilities. Changes in the value of the futures contract may not directly correlate with changes in the value of the underlying securities. This risk may decrease the effectiveness of a Fund’s strategies and potentially result in a loss.

I. Forward Commitments — The Growth Opportunities, Core Fixed Income, Government Income and Money Market Funds may enter into contracts to purchase securities for a fixed price at a specified future date beyond customary settlement time (“forward commitments”). If the Funds do so, they will maintain cash or other liquid obligations having a value in an amount at all times sufficient to meet the purchase price. Forward commitments involve a risk of loss if the value of the security to be purchased declines prior to the settlement date. Although the Funds generally will enter into forward commitments with the intention of acquiring securities for their portfolios, they may dispose of a commitment prior to settlement if their Sub-Adviser deems it appropriate to do so.

J. 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 Funds, 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 Funds may be delayed or limited and there may be a decline in the value of the collateral during the period while the Funds assert their rights. The underlying securities for all repurchase agreements are held in safekeeping at the Funds’ custodian or designated subcustodians under triparty repurchase agreements.

     Pursuant to exemptive relief granted by the Securities and Exchange Commission (the “SEC”) and terms and conditions contained therein, the Funds, together with other registered investment companies having management or investment advisory agreements with Goldman Sachs Asset Management, L.P. (“GSAM”), or its affiliates, may transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

K. Forward Sales Contracts — The Core Fixed Income and Government Income Funds may enter into forward security sales of mortgage-backed securities in which the Funds sell securities in the current month for delivery of securities, defined by pool-stipulated characteristics, on a specified future date. The value of the contract is recorded as a liability on the Fund’s records with the difference between its market value and cash proceeds received being recorded as an unrealized gain or loss. Gains or losses are realized upon delivery of the security sold.

L. Treasury Inflation-Protected Securities — The Funds may invest in Treasury Inflation-Protected Securities (“TIPS”), specially structured bonds for which the principal amount is adjusted daily to keep pace with inflation, as measured by the U.S. Consumer Pricing Index (“CPI”). The adjustments for interest income due to inflation are reflected in interest income in the Statements of Operations. TIPS are backed by the full faith and credit of the U.S. Government.

 
53

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST

3. AGREEMENTS

Effective January 9, 2006, GSAM, an affiliate of Goldman Sachs & Co. (“Goldman Sachs”), assumed the role of investment adviser pursuant to an Investment Management Agreement. (the “Agreement”) with the Trust on behalf of the Funds. Under the Agreement, GSAM manages the Funds, subject to the general supervision of the Trust’s Board of Trustees.
     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Fund’s business affairs, including providing facilities, GSAM is entitled to a fee (“Management Fee”), computed daily and payable monthly, equal to an annual percentage rate of the Funds’ average daily net assets.
     The Management Agreements for the following Funds provide for Management fees at annual rates equal to the following percentages of the average daily net assets of the Funds:
                 
Management Fee Average Daily
Fund Annual Rate Net Assets
Growth Opportunities
    1.00%       First $2  Billion  
      0.90%       Over $2  Billion  
Core Fixed Income
    0.40%       First $1  Billion  
      0.36%       Next $1  Billion  
      0.34%       Over $2  Billion  
Government Income
    0.54%       First $1  Billion  
      0.49%       Next $1  Billion  
      0.47%       Over $2  Billion  

     The Management Agreement for the Equity Index Fund provides for a Management fee at an annual rate equal to 0.30% of the Fund’s average daily net assets. If the Fund’s average daily net assets exceed $400 million, 0.10% of the Management fee will be waived on a voluntary basis. If the Fund’s average daily net assets are between $300 million and $400 million, 0.05% of the Management fee will be waived on a voluntary basis. If the Fund’s average daily net assets are less than $300 million, 0% of the Management fee will be waived. These waivers may be modified or terminated at any time without shareholder approval.

     As authorized by the Management Agreement, GSAM has entered into a Sub-advisory Agreement with SSgA Funds Management, Inc. (“SSgA”) who serves as the sub-adviser to the Equity Index Fund and provides the day-to-day advice regarding the Fund’s portfolio transactions. As compensation for its services, SSgA is entitled to a fee, computed daily and payable monthly, at the following annual rates of the Fund’s average daily net assets: 0.03% on the first $50 million, 0.02% on the next $200 million, 0.01% on the next $750 million and 0.008% over $1 billion.
     The Management Agreement for the Money Market Fund provides for a Management fee at an annual rate equal to 0.35% of the Fund’s average daily net assets.
     Prior to January 9, 2006, Allmerica Financial Investment Management Services, Inc., a wholly-owned subsidiary of Allmerica Financial Life Insurance and Annuity Company, served as investment manager and administrator to the Trust. Under the terms of the management agreement, the Funds paid a management fee, calculated daily and payable monthly, at an annual rate based upon the following fee schedules:
                                                 
Percentage of Average Daily Net Assets
First Next Next Next Next Over
Fund $100,000,000 $150,000,000 $250,000,000 $250,000,000 $250,000,000 $1,000,000,000
Growth Opportunities
    1.00%       0.90%       0.80%       0.70%       0.70%       0.65%  
Government Income
    0.50%       0.50%       0.50%       0.50%       0.50%       0.50%  
Money Market
    0.35%       0.30%       0.30%       0.25%       0.20%       0.20%  
 
54

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST 

3. AGREEMENTS (continued)

                         
First Next Over
Fund $50,000,000 $200,000,000 $250,000,000
Equity Index
    0.35%       0.30%       0.25%  
                         
First Next Over
Fund $50,000,000 $50,000,000 $100,000,000
Core Fixed Income
    0.50%       0.45%       0.40%  

In connection with the reorganization of the Funds of the Allmerica Investment Trust in January 2006, the Investment Adviser has contractually agreed to reimburse the following Funds as necessary to limit the total annual operating expenses of the Funds to the following levels until June 2007:

                 
Fund
Growth Opportunities
    1.144%          
Equity Index
    0.404%          
Core Fixed Income
    0.544%          
Government Income
    0.684%          
Money Market
    0.494%          

     GSAM has voluntarily agreed to limit certain “Other Expenses” of the Funds (excluding Management Fees, Transfer Agency fees and expenses, taxes, interest, brokerage fees and litigation, indemnification costs, shareholder meeting and other extraordinary expenses exclusive of any offset arrangements) to the extent that such expenses exceed, on an annual basis, a percentage rate of the average daily net assets of the Fund. GSAM has agreed to maintain this expense limitation reduction on a voluntary basis. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Funds are not obligated to reimburse GSAM for prior fiscal year expense reimbursements, if any. For the six months ended June 30, 2006, the Other Expense limitations for Growth Opportunities Fund, Equity Index Fund, Core Fixed Income Fund, Government Income Fund, and Money Market Fund as an annual percentage rate of average daily net assets to 0.004% 0.064%, 0.004%, 0.004%, and 0.004%, respectively.

     Goldman Sachs also serves as the Transfer Agent of the Fund for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly equal to an annual rate of 0.04% of the average daily net assets of the Funds. Goldman Sachs serves as the distributor of the Funds’ Shares at no cost to the Funds.
     The Trust has adopted, on behalf of the Service Shares of the Funds, a Distribution and Service plan (the “Plan”). Under the Plan, Goldman Sachs is entitled to a monthly fee for distribution services equal to, on an annual basis, 0.25% of each Fund’s average daily net assets attributable to Service Shares. GSAM has voluntarily agreed to waive distribution and Service fees for Service Shares so as not to exceed 0.10% for each of the Growth Opportunities, Equity Index, Core Fixed Income, Government Income and Money Market Funds. These waivers may be modified or terminated at any time at the option of Goldman Sachs.
 
55

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST

3. AGREEMENTS (continued)

     For the six months ended June 30, 2006, GSAM has voluntarily agreed to waive certain fees and reimburse other expenses. For the six months ended June 30, 2006, expense reductions were as follows (in thousands):
                                         
Fee Waivers
Custody Total
Management Distribution and Fee Other Expense Expense
Fund Fees Service Fees Reduction Reimbursement Reductions
Growth Opportunities
  $ —     $ 184     $ —     $ 87     $ 271  
Equity Index
    213       335       2       22       572  
Core Fixed Income
    —       227       3       153       383  
Government Income
    —       70       —       117       187  
Money Market
    —       158       1       80       239  

     At June 30, 2006, the amounts owed to affiliates were as follows (in thousands):

                                 
Management Distribution and Transfer
Fund Fees Service Fees Agent Fees Total
Growth Opportunities
  $ 188     $ 19     $ 7     $ 214  
Equity Index
    71       36       14       121  
Core Fixed Income
    99       24       10       133  
Government Income
    41       8       3       52  
Money Market
    65       18       7       90  

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long-term securities for the six months ended June 30, 2006, were as follows:
                                 
Sales and Sales and
Purchase Maturities of Maturities
Purchases of (Excluding U.S. Government (Excluding U.S.
U.S. Government and U.S. Government and and Agency Government and
Fund Agency Obligations Agency Obligations) Obligations Agency Obligations)
Growth Opportunities
  $ —     $ 296,775,923     $ —     $ 335,587,423  
Equity Index
    —       11,239,551       —       75,897,117  
Core Fixed Income
    342,728,863       95,098,737       191,587,075       129,176,621  
Government Income
    162,575,426       8,361,803       135,184,138       11,294,994  
Money Market
    —       —       —       —  

     For the six months ended June 30, 2006, Goldman Sachs earned approximately $372 and $3,586 of brokerage commissions from portfolio transactions executed on behalf of the Growth Opportunities and Equity Index Funds, respectively.

 
56

 

 
GOLDMAN SACHS VARIABLE INSURANCE TRUST 

5. SECURITIES LENDING

Pursuant to exemptive relief granted by the Securities and Exchange Commission (“SEC”) and the terms and conditions contained therein, the Funds may lend their securities through a securities lending agent, Boston Global Advisers (“BGA”) — a wholly owned subsidiary of Goldman Sachs, to certain qualified borrowers including Goldman Sachs. 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 Funds, 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 Funds bear the risk of delay on recovery or loss of rights in the collateral should the borrower of the securities fail financially.
     Both the Funds and BGA receive compensation relating to the lending of the Funds’ securities. The amount earned by the Funds for the six months ended June 30, 2006, is reported parenthetically on the Statement of Operations. A portion of this amount, $1,200 represents compensation earned by the Growth Opportunities Fund from lending its securities to Goldman Sachs. For the six months ended June 30, 2006, BGA earned approximately $1,000 and $1,300 in fees as securities lending agent for the Growth Opportunities and Equity Index Funds, respectively. At June 30, 2006, the Growth Opportunities and Equity Index Funds loaned securities having a market value of $10,693,260 and $845,616 collateralized by cash in the amount of $10,962,000 and $868,350, respectively. The Funds invest the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by GSAM, for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Funds bear the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.

6. LINE OF CREDIT FACILITY

The Funds participate in a $400,000,000 committed, unsecured revolving line of credit facility together with other registered investment companies having management or investment advisory agreements. Under the most restrictive arrangement, the Fund must own securities having a market value in excess of 300% of the 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. This committed facility also requires a fee to be paid by the Funds based on the amount of the commitment that has not been utilized. During the six months ended June 30, 2006, the Funds did not have any borrowings under this facility.

7. TAX INFORMATION

As of the Funds’ most recent fiscal year end, December 31, 2005, the Funds’ capital loss carryforwards were as follows. Expiration occurs on December 31 of the year indicated.
                                   
Growth
Opportunities Equity Index Core Fixed Income Government Income
Capital loss carryforward:
                               
 
Expiring 2007
  $ —     $ 12,212,844     $ —     $ —  
 
Expiring 2008
    427,851       62,715,062       —       —  
 
Expiring 2009
    —       13,380,657       —       —  
 
Expiring 2010
    —       17,675,562       —       —  
 
Expiring 2011
    —       16,843,955       —       —  
 
Expiring 2012
    —       7,271,316       1,472,715       1,242,253  
 
Expiring 2013
    —       —       657,789       1,135,876  
Total capital loss carryforward
  $ 427,851     $ 130,099,396     $ 2,130,504     $ 2,378,129  
 
57

 

Notes to Financial Statements (continued)
June 30, 2006 (Unaudited)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST

7. TAX INFORMATION (continued)

At June 30, 2006, the Funds’ aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes were as follows:

                                 
Growth
Opportunities Equity Index Core Fixed Income Government Income
Tax Cost
  $ 250,227,839     $ 374,664,306     $ 313,031,273     $ 104,833,773  
Gross unrealized gain
    16,863,397       81,651,733       384,658       38,850  
Gross unrealized loss
    (27,237,369 )     (26,148,163 )     (7,892,101 )     (14,484,207 )
Net unrealized security gain (loss)
  $ (10,373,972 )   $ 55,503,570     $ (7,507,443 )   $ (14,445,357 )

The amortized cost for the Money Market Fund stated in the accompanying statements of assets and liabilities also represents aggregate cost for U.S. federal income tax purposes.

The difference between book-basis and tax-basis unrealized gains (losses) is attributable primarily to wash sales, net mark-to market gains on futures and forward foreign currency contracts recognized for tax purposes and differing treatment of amortization of market premium.

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 the Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds and the Trustees and Officers of the Goldman Sachs 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 and the Trustees and Officers of the Trust. The Funds, along with 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 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.
     Based on currently available information, GSAM and GSAMI believe that the likelihood that the pending purported class action and derivative action lawsuit will have a material adverse financial impact on the Funds is remote, and the pending action is not likely to materially affect its ability to provide investment management services to its clients, including the Goldman Sachs Funds.

New Accounting Pronouncement — On July 13, 2006, the Financial Accounting Standards Board (“FASB”) released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At this time, management is evaluating the implications of FIN 48 and its impact in the financial statements has not yet been determined.

 
58

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST 

Statement Regarding Basis for Approval of Management Agreement (Unaudited)

The Growth Opportunities, Equity Index, Government Income, Core Fixed Income and Money Market Funds are newly-organized investment portfolios of Goldman Sachs Variable Insurance Trust (the “Trust”) that commenced investment operations on January 9, 2006. The respective Funds are the accounting successors to investment portfolios of Allmerica Investment Trust, which were reorganized into the Funds.

In connection with the Funds’ organization, the Trust’s investment management agreements (the “Management Agreements”) with Goldman Sachs Asset Management, L.P. (the “Investment Adviser”) for the Funds, and the Sub-Advisory Agreement (the “Sub-Advisory Agreement”) between the Investment Adviser and SSgA Funds Management, Inc. (the “Sub-Adviser”) for the Equity Index Fund, were approved by the Trustees, including all of the Trustees who are not parties to the Management Agreements or the Sub-Advisory Agreement or “interested persons” (as defined in the Investment Company Act of 1940, as amended) of any party thereto (the “Independent Trustees”), at a meeting held on August 4, 2005 (the “2005 Meeting”), The Management Agreements and the Sub-Advisory Agreement were subsequently re-approved by the Trustees, including all of the Independent Trustees, at a meeting held on June 15, 2006 (the “Annual Contract Meeting”) for an annual period ending June 30, 2007. (The 2005 Meeting and the Annual Contract Meeting are sometimes referred to as the “Meetings.”)

At the 2005 Meeting, the Trustees reviewed the Management Agreements and the Sub-Advisory Agreement as they applied to the respective Funds, including information regarding the terms of the Management Agreements and the Sub-Advisory Agreement; the fees and expenses to be paid by the Funds; the spread between the Investment Adviser’s management fee for the Equity Index Fund and the Sub-Adviser’s sub-advisory fee for that Fund; the Investment Adviser’s proposal to reimburse certain expenses of the Funds that exceed a specified level; the Investment Adviser’s proposal to waive voluntarily a portion of its management fee with respect to the Equity Index Fund; other benefits to be derived by the Investment Adviser and its affiliates from their relationships with the Funds; and a comparison of the Funds’ fees and expenses with those paid by other similar mutual funds.

In connection with the Meetings, the Trustees received written materials and oral presentations provided by the Investment Adviser and Sub-Adviser, and were advised by their independent legal counsel regarding their responsibilities under applicable law. The Trustees also reviewed, with the advice of legal counsel, their responsibilities under applicable law and met in executive session without representatives of the Investment Adviser and Sub-Adviser present. In evaluating the Management Agreements at the Meetings, the Trustees relied upon their knowledge of the Investment Adviser resulting from their meetings and other interactions throughout the year.

In connection with their approval of the Management. Agreements and Sub-Advisory Agreement for the Funds at the Meetings, the Trustees gave weight to various factors, but did not identify any particular factor as controlling their decision. As part of their review, the Trustees considered the nature, extent and quality of the services provided by the Investment Adviser and Sub-Adviser. In this regard, the Trustees considered both the investment advisory services and the other non-advisory services provided by the Investment Adviser and its affiliates for the Funds. These services included services as the Funds’ transfer agent, securities lending agent and distributor. In addition, affiliates of the Investment Adviser would receive compensation in connection with the execution of the Funds’ portfolio securities transactions. The Trustees concluded that the Investment. Adviser was able to provide quality services to the Funds. In this regard, the Trustees noted that, although the Funds were new and had not been managed previously by the Investment Adviser, the Investment Adviser did have past experience in managing other similar investment portfolios. The Trustees believed that the investment returns of these other portfolios had been within a competitive range.

With regard to the Equity Index Fund, the Trustees also considered the benefits that affiliates of the Sub-Adviser would receive for providing other services to the Funds, including services as the custodian and accounting agent. In addition, the Trustees considered, among other things, the Sub-Adviser’s experience in index investing and its compliance policies and procedures and code of ethics. The Trustees also considered the investment performance of other similar clients managed by the Sub-Adviser. The Trustees believed that the Sub-Adviser had been able to track the investment returns of the S&P 500 Index for its other clients. The Trustees believed that the Sub-Adviser was able to provide quality services to the Equity Index Fund.

The Board of Trustees also considered the contractual fee rates payable by the Funds under the Management Agreements and the contractual fee rates payable by the Investment Adviser under the Sub-Advisory Agreement. In this regard, information on the fees paid by the Funds and the Funds’ projected total operating expense ratios were compared to similar information for mutual funds advised by other, unaffiliated investment management firms. The comparisons of the Funds’ fee rates and total operating expense ratios were compiled by a third-party provider of mutual fund data (the “Outside Data Provider”). More particularly, the analyses compared the Funds’ management fees and projected expenses to relevant peer groups and category medians. The Trustees believed that this information was useful in evaluating the reasonableness of the management fees payable by the Funds.

 
59

 

Statement Regarding Basis for Approval of Management Agreement (Unaudited) (continued)
 
 GOLDMAN SACHS VARIABLE INSURANCE TRUST

In addition, in connection with the approval of the Management Agreements at the 2005 Meeting, the Board approved the breakpoints in the contractual management fee rate at the following annual percentages of the average daily net assets of the Government Income Fund, Core Fixed Income Fund and Growth Opportunities Fund:

                 
Government Core Fixed
Income Fund Income Fund
Up to $1 billion
    0.54 %     0.40 %
Next $1 billion
    0.49       0.36  
Over $2 billion
    0.47       0.34  
         
Growth
Opportunities
Fund
First $2 billion
    1.00 %
Over $2 billion
    0.90  

The Trustees also considered and approved the following breakpoints in the contractual fee rate in the Sub-Advisory Agreement:

         
Equity Index Fund
(Sub-Advisory Fee)
First $50 million
    0.03%  
Next $200 million
    0.02  
Next $750 million
    0.01  
Over $1 billion
    0.008  

In approving these fee breakpoints, the Trustees considered information regarding potential economies of scale, and whether the Funds and their shareholders would participate in the benefits of these economies. In this regard, the Trustees considered the Funds’ projected assets, the Investment Adviser’s and Sub-Adviser’s anticipated expenses and the fee comparisons that had been provided. The Trustees noted again that the Funds were new and that the costs of the Investment Adviser and Sub-Adviser in providing its services, and the related profitability information, would be reviewed periodically by the Trustees. The Trustees agreed that the fee breakpoints were a way to ensure that benefits of scalability would be passed along to shareholders at the specified asset levels. The Trustees also noted the Investment Adviser’s voluntary undertaking to limit the Funds’ total expense ratios (excluding certain expenses) to specified levels. This voluntary undertaking was in addition to the Investment Adviser’s contractual agreement to reimburse the Funds as necessary to limit the total annual operating expenses of their Service Shares to a specified level until June 2007.

In addition, with respect to the Equity Index Fund, the Trustees noted that the management fee rates of the Investment Advisor did not have breakpoints. Regarding the Equity Index Fund, however, the Trustees considered both the Investment Adviser’s voluntary management fee waiver and that Fund’s future growth prospects. With respect to the Money Market Fund, the Trustees considered the Fund’s relatively lower asset level as compared to many other money market funds. Furthermore, with respect to all of the Funds, the Trustees considered information relating to the Investment Adviser’s past revenues and costs with respect to the Trust and its investment portfolios.

At the Meetings, the Trustees also considered the other benefits that would be derived by the Investment Adviser and its affiliates from the Funds as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services, and the brokerage and research services that may be received by the Investment Adviser in connection with the placement of brokerage transactions for the Funds. In addition, as noted the Trustees considered the benefits received by affiliates of the Sub-Adviser for providing other services to the Funds, including services as the custodian and accounting agent.

After deliberation and consideration of the information provided, including the factors described above, the Trustees concluded at the 2005 Meeting, and again at the Annual Contract Meeting, that the management fees payable by the Funds, and the fee payable to the Sub-Adviser by the Investment Adviser with respect to the Equity Index Fund, were reasonable in light of the services to be provided by the Investment Adviser and Sub-Adviser and the Funds’ reasonably foreseeable asset levels, and that the Management Agreements and the Sub-Advisory Agreement should be approved and continued.

 
60

 

GOLDMAN SACHS VARIABLE INSURANCE TRUST

Fund Expenses (Unaudited) — Six Month Period Ended June 30, 2006

          As a shareholder of Service Shares of the Funds you incur these types of costs: ongoing costs, including management fees; distribution and service (12b-1) fees (with respect to Service Shares); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in Service Shares of the Funds 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 January 1, 2006 through June 30, 2006.

          Actual Expenses — The first line of 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 of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. 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 Funds 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, as a shareholder of a Fund you do not incur any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. 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 whose shareholders may incur transaction costs.
                                                 
Growth Opportunities Fund Equity Index Fund
Expenses Paid Expenses Paid
Beginning Ending for the 6 Beginning Ending for the 6
Account Value Account Value months ended Account Value Account Value months ended
Share Class 1/1/06 6/30/06 6/30/06* 1/1/06 6/30/06 6/30/06*
Service
                                                
Actual
    1,000.00       985.00       5.71       1,000.00       1,024.80       2.11  
Hypothetical 5% return
    1,000.00       1,019.03 +     5.81       1,000.00       1,022.72 +     2.11  

[Additional columns below]

[Continued from above table, first column(s) repeated]
                                                                         
Core Fixed Income Fund Government Income Fund Money Market Fund
Expenses Paid Expenses Paid Expenses Paid
Beginning Ending for the 6 Beginning Ending for the 6 Beginning Ending for the 6
Account Value Account Value months ended Account Value Account Value months ended Account Value Account Value months ended
Share Class 1/1/06 6/3/06 6/30/06* 1/1/06 6/30/06 6/30/06* 1/1/06 6/30/06 6/30/06*
Service
                                                                        
Actual
    1,000.00       991.60       2.72       1,000.00       994.90       3.41       1,000.00       1,021.20       2.51  
Hypothetical 5% return
    1,000.00       1,022.04 +     2.76       1,000.00       1,021.75 +     3.46       1,000.00       1,022.31 +     2.51  
 

*   Expenses for each share class are calculated using the Funds’ annualized expense ratio for each class, which represents the ongoing expenses as a percentage of net assets for the six months ended 06/30/06. 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 fiscal year. The annualized expense ratios for the period were as follows:

         
Fund Service
Growth Opportunities
    1.16 %
Equity Index
    0.42  
Core Fixed Income
    0.55  
Government Income
    0.69  
Money Market
    0.50  

+  Hypothetical expenses are based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses.

 
61

 

     
TRUSTEES
  OFFICERS
Ashok N. Bakhru, Chairman
   Kaysie P. Uniacke, President
John P. Coblentz, Jr.
  James A. Fitzpatrick, Vice President
Patrick T. Harker
  James A. McNamara, Vice President
Mary Patterson McPherson
  John M. Perlowski, Treasurer
Alan A. Shuch
  Peter V. Bonanno, Secretary
Wilma J. Smelcer
   
Richard P. Strubel
   
Kaysie P. Uniacke
   
 
GOLDMAN, SACHS & CO.
Distributor and Transfer Agent 		   
 
GOLDMAN SACHS ASSET MANAGEMENT, L.P.
Investment Adviser
 
Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.
 
The reports concerning the Funds included in this shareholder report may contain certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, 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 Funds. 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 the 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 Funds file their 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. The Funds’ Form N-Q will become available on the SEC’s website at http://www.sec.gov within 60 days after the Funds’ first and third fiscal quarters. When available, the Funds’ 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 1-800-621-2550.
 
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.
 
Holdings and allocations shown may not be representative of current or future investments. Holdings and allocations may not include the Funds’ 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.
 
    Toll Free (in U.S.): 800-292-4726
 
This report is prepared for the general information of contract owners and is not an offer of shares of the Goldman Sachs Variable Insurance Trust Funds.
 
 
Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: August 29, 2006
 
VITSAR/06-1234/08-06    

 

     
ITEM 2.   CODE OF ETHICS. — Not applicable to the Semi-Annual Report for the period ended June 30, 2006.
     
ITEM 3.   AUDIT COMMITTEE FINANCIAL EXPERT. — Not applicable to the Semi-Annual Report for the period ended June 30, 2006.
     
ITEM 4.   PRINCIPAL ACCOUNTANT FEES AND SERVICES. — Not applicable to the Semi-Annual Report for the period ended June 30, 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 have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.
     

     
ITEM 12.   EXHIBITS.

  (a)(1)   Goldman Sachs Variable Insurance 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 (Accession Number 0000950123-04-0002976).
 
  (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 Variable Insurance Trust
   
 
    
 
    
/s/ Kaysie Uniacke
    
   
By: Kaysie Uniacke
    
Chief Executive Officer of
    
Goldman Sachs Variable Insurance Trust
    
 
    
Date: August 31, 2006
    
 
    
 
    
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
    
 
    
/s/ Kaysie Uniacke
   
By: Kaysie Uniacke
    
Chief Executive Officer of
    
Goldman Sachs Variable Insurance Trust
    
 
    
Date: August 31, 2006
    
 
    
 
    
/s/ John M. Perlowski
   
By: John M. Perlowski
    
Chief Financial Officer of
    
Goldman Sachs Variable Insurance Trust
    
 
    
Date: August 31, 2006