N-CSR 1 d758666dncsr.htm GOLDMAN SACHS TRUST Goldman Sachs Trust

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 811-05349

 

Goldman Sachs Trust

 

(Exact name of registrant as specified in charter)

71 South Wacker Drive, Chicago, Illinois 60606

 

(Address of principal executive offices) (Zip code)

 

Caroline Kraus, Esq.    Copies to:
Goldman Sachs & Co. LLC    Geoffrey R.T. Kenyon, Esq.
200 West Street    Dechert LLP
New York, New York 10282    100 Oliver Street
   40th Floor
   Boston, MA 02110-2605

 

(Name and address of agents for service)

 

Registrant’s telephone number, including area code: (312) 655-4400

 

Date of fiscal year end: October 31

 

Date of reporting period: October 31, 2019

 

 

ITEM 1.

REPORTS TO STOCKHOLDERS.

 

    

The Annual Report to Shareholders is filed herewith.


Goldman Sachs Funds

 

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Annual Report      

October 31, 2019

 
     

Dividend Focus Funds

     

Income Builder

     

Rising Dividend Growth

It is our intention that beginning on January 1, 2021, paper copies of the Funds’ annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from a Fund or from your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. At any time, you may elect to receive reports and certain communications from a Fund electronically by calling the applicable toll-free number below or by contacting your financial intermediary.

You may elect to receive all future shareholder reports in paper free of charge. If you hold shares of a Fund directly with the Fund’s transfer agent, you can inform the transfer agent that you wish to receive paper copies of reports by calling toll-free 800-621-2550 for Institutional, Class R6 and Class P shareholders or 800-526-7384 for all other shareholders. If you hold shares of a Fund through a financial intermediary, please contact your financial intermediary to make this election. Your election to receive reports in paper will apply to all Goldman Sachs Funds held in your account if you invest through your financial intermediary or all Goldman Sachs Funds held with the Funds’ transfer agent if you invest directly with the transfer agent.

 

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Goldman Sachs Dividend Focus Funds

 

 

INCOME BUILDER

 

 

RISING DIVIDEND GROWTH

 

TABLE OF CONTENTS

 

Investment Process — Income Builder

    1  

Portfolio Management Discussion and Performance Summary — Income Builder

    2  

Portfolio Management Discussion and Performance Summary — Rising Dividend Growth

    11  

Schedules of Investments

    20  

Financial Statements

    36  

Financial Highlights

    39  

Income Builder

    39  

Rising Dividend Growth

    45  

Notes to Financial Statements

    52  

Report of Independent Registered Public Accounting Firm

    72  

Other Information

    73  

 

     
NOT FDIC-INSURED   May Lose Value   No Bank Guarantee


GOLDMAN SACHS INCOME BUILDER FUND

 

What Differentiates Goldman Sachs’

Income Builder Fund Investment Process?

 

Income Builder Fund is a broadly diversified portfolio that seeks to provide income and capital appreciation.

 

LOGO

 

LOGO

The Goldman Sachs Income Builder Fund provides exposure to the wealth-building opportunities of stocks and the regular income potential of bonds. The Fund invests in both equity and fixed income securities with a focus on yield enhancing strategies to earn a monthly income stream. The Fund seeks to maintain broad exposure to equities with lower than general equity market volatility.

 

LOGO

We believe that similar themes can perform differently across asset classes. The Fund can potentially take advantage of these cross-asset class opportunities as it is a dynamic portfolio that allows the flexibility to allocate across equities and fixed income from a top-down perspective, given our views on macro opportunities and valuations.

 

LOGO

In our risk management process, we identify, monitor and measure a fund’s risk profile. We consider the risk relative to the benchmark and the Fund’s investment goal to seek income stability and capital growth.

 

LOGO

The Fund’s portfolio comprises the ideas of three experienced Goldman Sachs investment groups:

Global Fundamental Equity Group: A group of investment professionals averaging over 15 years of investment experience and with a strong commitment to fundamental research.

Global Fixed Income Group: Broad, deep capabilities across global fixed income markets, with a total return investment philosophy.

Global Portfolio Solutions Group: The team is comprised of over 135* professionals with significant academic and practitioner experience.

 

*   As of September 2019

 

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FUND RESULTS

 

Goldman Sachs Income Builder Fund

 

Investment Objective

The Fund seeks to provide income and capital appreciation.

Portfolio Management Discussion and Analysis

Below, the Goldman Sachs Fundamental Equity Team, the Goldman Sachs Fixed Income Investment Management Team, and the Goldman Sachs Global Portfolio Solutions Team, collectively the Goldman Sachs Income Builder Team (the “Income Builder Team”), discuss the Goldman Sachs Income Builder Fund’s (the “Fund”) performance and positioning for the 12-month period ended October 31, 2019 (the “Reporting Period”).

 

Q   How did the Fund perform during the Reporting Period?

 

A   During the Reporting Period, the Fund’s Class A, Class C, Institutional, Investor, Class P and Class R6 Shares generated average annual total returns, without sales charges, of 13.34%, 12.44%, 13.76%, 13.59%, 13.77% and 13.72%, respectively. These returns compare to the 11.21% and 9.84% average annual total returns of the Russell 1000® Value Index (with dividends reinvested) (the “Russell Index”) and the ICE BofAML BB to B U.S. High Yield Constrained Index (the “ICE BofAML Index”), respectively, during the same period.

 

Q   What economic and market factors most influenced the Fund during the Reporting Period?

 

A   During the Reporting Period, Federal Reserve (“Fed”) monetary policy, economic growth expectations and geopolitics most influenced the financial markets and the Fund.

 

     When the Reporting Period began in November 2018, U.S. stocks gained on dovish comments from Fed Chair Jerome Powell and seemingly encouraging progress in U.S.-China trade talks. (Dovish language tends to suggest lower interest rates; opposite of hawkish.) Within fixed income, U.S. Treasury yields fell, as investors grew fearful about the possible end of the global economic cycle and as their expectations for Fed rate hikes diminished. U.S. high yield corporate bonds experienced a modest loss amid pressure on corporate profit margins, company-specific events and lower crude oil prices. In December 2018, Fed policymakers raised short-term interest rates, much as the markets had expected, but lowered their projection for 2019 monetary policy tightening from three rate hikes to two. The 10-year U.S. Treasury yield fell on a combination of market-perceived safe-haven demand and lower crude oil prices. For similar reasons, U.S. high yield corporate credit posted its worst monthly total return since 2015. Meanwhile, U.S. equities plunged on renewed investor fears sparked by the partial U.S. federal government shutdown, the U.S. President’s criticism of Fed Chair Powell and reignited corporate earnings growth concerns.

 

  

During the first quarter of 2019, U.S. stocks posted double-digit gains. The Fed kept its monetary policy unchanged, with its dot plot projecting no interest rate hikes at all during 2019. (The “dot plot” shows interest rate projections of the members of the Federal Open Market Committee.) Largely as a result, U.S. Treasury yields fell. U.S. high yield corporate bonds logged their strongest start to a calendar year on record, due in part to better than market expected corporate earnings and improved investor risk sentiment.

 

  

U.S. stocks continued to rally in the second quarter of 2019. Trade tensions between the U.S. and China dominated headlines and broadly added noise to the equity markets. (Noise refers to market activity that can confuse or misrepresent genuine underlying trends.) In April 2019, investors grew optimistic about a possible U.S.-China trade deal, but this optimism faded in May when the U.S. President threatened to raise current tariffs and impose new duties on $300 billion of additional Chinese imports. Also in May 2019, investor speculation about possible 2019 Fed rate cuts increased due to an accumulation of factors, including soft inflation and weakness in U.S. economic data, continued U.S. growth headwinds from unresolved U.S.-China trade negotiations and subdued global economic activity, particularly in the manufacturing sector. At its June 2019 meeting, the Fed left interest rates unchanged, but eight of the 12 members of the Federal Open Market Committee projected rate cuts during the 2019 calendar year. In fixed income, U.S. Treasury yields fell during the second quarter of 2019. U.S.

 

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FUND RESULTS

 

 

  high yield corporate bonds delivered positive returns amid better than market expected corporate earnings, muted inflation pressures and supportive Fed monetary policy.

 

  

In the third quarter of 2019, U.S. stocks and U.S. high yield corporate bonds recorded slightly positive returns, as market volatility broadly challenged riskier asset classes. Global economic data weakened, and U.S. economic data was largely mixed, prompting the Fed to cut short-term interest rates in both July and September — its first interest rate cuts since 2008 — in an effort to prolong the U.S. economic expansion. Largely in response, U.S. Treasury yields declined.

 

  

During October 2019, U.S. stocks posted a modest gain, benefiting from signs the U.S. and China were moving closer to a partial trade agreement and the U.K. was edging away from a no-deal Brexit. (Brexit refers to the U.K.’s efforts to leave the European Union.) U.S. economic data continued to soften, with most of the weakness manifesting in the trade-sensitive manufacturing sector. The Fed delivered its third interest rate cut of 2019 and indicated its future monetary policy path would be dependent on the evolution of macro data and on trade developments. In fixed income, U.S. Treasury yields edged up. U.S. high yield corporate bonds eked out a gain in October 2019, as slowing corporate earnings, company-specific events and manufacturing weakness weighed on performance.

 

Q   What was the Fund’s asset allocation positioning during the Reporting Period?

 

A   As part of its principal investment strategies, the Fund has a baseline allocation of 60% to fixed income securities and 40% to equity securities, though in seeking to meet its investment objective, the Fund has the flexibility to opportunistically tilt the allocation to fixed income and equity securities up to 15% above or below that baseline allocation. The Fund seeks to provide a high and stable income stream plus capital appreciation, with lower volatility than the equity market. The percentage of the portfolio invested in equity and fixed income securities will vary from time to time as the Income Builder Team evaluates such securities’ relative attractiveness based on, among other factors, income opportunities, market valuations, economic growth and inflation prospects. Because of these stated goals of the Fund, the Income Builder Team believes the returns of the Russell Index and the ICE BofAML Index should be considered for reference only.

 

  

At the beginning of the Reporting Period, the Fund was invested 39.9% in equities and 55.7% in fixed income, with the balance of 4.4% in cash and cash equivalents. During the Reporting Period overall, we lengthened the Fund’s duration position using interest rate swaps, as we sought to mitigate potential risk within high yield corporate credit and equities. (Duration is a measure of the Fund’s sensitivity to changes in interest rates.) Within equities, we eliminated the Fund’s allocation to emerging markets stocks during January 2019 amidst lowered investor expectations for global economic growth and as U.S.-China trade negotiations dragged on. Over the course of the first quarter of 2019, as equities outperformed our expectations, we reduced the Fund’s exposure to stocks and sold equity call options to mitigate potential downside risk. Within fixed income, we removed the Fund’s allocation to local emerging markets debt in August 2019, as we saw near-term risks to the asset class, including the potential of further escalation in the U.S.-China trade conflict and the possibility U.S. bond yields would continue to rise. Within the Fund overall, during September 2019, we eliminated our volatility-selling strategy, increased the Fund’s allocation to fixed income and reduced investments in defensive-oriented value stocks in favor of increased exposure to equities broadly. (Volatility selling seeks to benefit from changes in the level of market implied volatility (i.e., expectations of future volatility) in equity markets.) We made these changes to put the Fund’s cash holdings to work and to position the Fund for a possible sustained recovery in the performance of cyclically-oriented sectors. At the end of the Reporting Period, the Fund was invested 37.5% in equities and 57% in fixed income, with the balance of 5.5% in cash and cash equivalents.

 

Q   What was the Fund’s 12-month distribution rate and what was its 30-day SEC yield during the Reporting Period?

 

A  

During the Reporting Period, the Fund’s Class A, Class C, Institutional, Investor, Class R6 and Class P Shares provided 12-month distribution rates of 3.54%, 2.88%, 3.82%, 3.71%, 3.84% and 3.83%, respectively. (The 12-month distribution rate is calculated by taking the sum of all cash distributions to shareholders over the past 12 months and dividing this sum by the Fund’s month-end NAV for the last month of the period. This rate includes capital gain/loss distributions, if any. This is not a SEC Yield.) On October 31, 2019, the Fund’s 30-Day Standardized Subsidized Yield for its Class A, Class C, Institutional, Investor, Class R6 and

 

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FUND RESULTS

 

 

  Class P Shares were 2.76%, 2.18%, 3.30%, 3.17%, 3.31% and 3.31%, respectively. (The 30-Day Standardized Subsidized Yield is calculated in accordance with SEC regulations and is determined by dividing the Fund’s net investment income per share earned over the 30-day period by the Fund’s maximum public offering price per share on the last day of such period, which figure is then annualized. The 30-Day Standardized Subsidized Yield may differ from the distribution rate because of the exclusion of distributed capital gains. The 30-Day Standardized Subsidized Yield reflects any fee waivers and/or expense reimbursements in effect during the period, without which the yield would be reduced.)

 

Q   What key factors had the greatest impact on the performance of the Fund’s equity allocation during the Reporting Period?

 

A   Relative to the Russell Index, stock selection had the greatest positive impact on the Fund’s equity allocation during the Reporting Period. The Fund’s call writing strategy, which seeks to generate additional cash flow and potentially reduce volatility by sales of call options on the S&P 500® Index or other regional stock market indices (or related ETFs), had a negative impact on its performance during the Reporting Period.

 

Q   Which equity market sectors most significantly affected Fund performance during the Reporting Period?

 

A   During the Reporting Period, the Fund’s overweight positions compared to the Russell Index in the information technology, utilities and industrials sectors added to its returns. Stock selection in all three of these sectors also contributed positively as did stock selection in energy. Conversely, the Fund was hindered by an underweight in the consumer staples sector and an overweight in the energy sector. Stock selection in consumer staples and health care also detracted from relative results.

 

Q   Which stocks contributed significantly to the Fund’s relative performance during the Reporting Period?

 

A   Compared to the Russell Index, the Fund’s positioning in Microsoft, Enel and Exxon Mobil bolstered returns during the Reporting Period.

 

  

An investment in Microsoft added most to relative returns. The developer and marketer of software and hardware services posted favorable earnings results in the first and second quarters of 2019, with outperformance across all of its business segments, including continued robust demand for its cloud computing service, Azure. Investor concerns around slowing hardware purchases, which caused Microsoft to underperform in early 2019, eased in the second half of the Reporting Period. When the Reporting Period concluded, we held a favorable view of the company’s ongoing progress in migrating enterprise customers to Azure, as Microsoft remains a major player in the public cloud market. We also continued to believe Microsoft was a well-diversified, high quality company led by an excellent management team.

 

  

Enel is a European utility company. Along with other utilities stocks, Enel benefited from the falling interest rate environment. At the end of the Reporting Period, we remained positive about the company, as we believed it had achieved increased efficiency and was boosting its profits.

 

  

Having an underweight in Exxon Mobil, which engages in the exploration, development and distribution of oil, gas and petroleum products, also contributed positively to the Fund’s performance during the Reporting Period. Shares of Exxon Mobil sold off, along with the energy sector overall, during December 2018 due to widespread market concerns about global supply and demand. In our view, these concerns were driven by increased U.S. and Saudi Arabian oil production, which led to higher inventory levels. Meanwhile, slowing global economic growth and the resulting lower demand for oil exerted downward pressure on crude oil prices. Also weighing on investor sentiment during the Reporting Period was Exxon Mobil’s announcement that one of its ships had experienced a confrontation with the Venezuelan navy during an exploratory mission off the coast of Guyana, causing it to abruptly halt operations. We sold the Fund’s position in the stock during the Reporting Period to invest in higher conviction ideas.

 

Q   Which stocks detracted significantly from the Fund’s relative performance during the Reporting Period?

 

A   During the Reporting Period, the largest detractors from the Fund’s performance relative to the Russell Index were Altria Group, Royal Dutch Shell and AT&T.

 

  

Altria Group, which produces and markets tobacco products, saw its share price negatively impacted by lower than market expected second quarter 2019 earnings and a proposed new regulation from the Food and Drug Administration (“FDA”) regarding health warnings on tobacco products. During August 2019, we sold the Fund’s position in Altria Group

 

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FUND RESULTS

 

 

 

  because of our increased concerns around FDA regulation of the company’s electronic cigarette subsidiary Juul Labs and because of declining cigarette volumes overall. We used the proceeds to establish a position in Philip Morris International, which we favored for its geographical diversity and for what we considered to be its attractive valuation relative to its peers.

 

  

Royal Dutch Shell is a multinational oil and gas company headquartered in the Netherlands and incorporated in the U.K. In addition to its core businesses of oil and gas production, refining and marketing, and petrochemicals manufacturing, Royal Dutch Shell has some exposure to alternative fuels and other renewable energies. The company’s shares declined on worse than market expected second quarter 2019 earnings, driven by a drop in crude oil prices. At the end of the Reporting Period, we remained positive on Royal Dutch Shell, as we believed the company continued to reprioritize its investments and reduce potential risks to its dividend. New projects were widely expected to deliver $5 billion in incremental cash on a net basis, and the company was focusing on small projects that we believe could add value. Royal Dutch Shell is also attractive, in our view, because of its continued share buybacks, attractive dividend yield and exposure to the liquefied natural gas market.

 

  

AT&T detracted because the Fund was underweight relative to the Russell Index and its stock performed well. The multinational telecommunications provider benefited from efforts to refocus on its core business, driven by pressure from activist investor Elliott Management. By the end of the Reporting Period, we had exited the Fund’s position in AT&T because we considered Verizon Communications more attractive due to its competitive pricing and fifth-generation, or 5G, network trials.

 

Q   Were any significant purchases or sales made within the equity allocation of the Fund during the Reporting Period?

 

A   During the Reporting Period, the Fund initiated a position in The Home Depot, a retailer of building materials and home improvement products. In our view, sales trends are likely to be positive, as the company has benefited from increasing activity in home remodeling. We considered the stock’s valuation attractive and believed an excellent management team was in place.

 

  

Another key purchase was Eli Lilly and Company, a leading pharmaceutical maker with a history of innovation and what we consider to be a strong drug pipeline. We are optimistic about the company, as we see accelerating top-line revenue growth due to drug launches, increased profit margin growth and earnings per share growth. In our opinion, Eli Lilly and Company is likely to outperform market expectations.

 

  

Among sales completed during the Reporting Period was the Fund’s position in SunTrust Banks. We considered SunTrust a high quality company with favorable growth prospects, but after it announced a merger with bank holding company BB&T, we decided to eliminate the position to pursue what we felt were more attractive ideas in the financials sector.

 

  

We exited the Fund’s investment in global biopharmaceutical company Pfizer. When the stock was purchased, we were positive about the company’s strong balance sheet and potential to grow by improving market share. However, the market reacted negatively to Pfizer’s second quarter 2019 earnings release, hurting its share price, and we decided to sell the Fund’s position in favor of other pharmaceutical stocks.

 

Q   What changes were made to the Fund’s equity market sector and industry weightings during the Reporting Period?

 

A   During the Reporting Period, we reduced the Fund’s exposures to the health care, energy and communication services sectors. We increased its exposures to the consumer discretionary, industrials and materials sectors. At the end of the Reporting Period, the Fund was overweight relative to the Russell Index in the information technology, industrials, energy, and materials sectors. The Fund was underweight compared to the Russell Index in the financials, communication services, and utilities sectors. Relative to the Russell Index, the Fund was rather neutrally weighted in the consumer discretionary, health care, consumer staples and real estate sectors at the end of the Reporting Period.

 

Q   Which fixed income market segments significantly affected the Fund’s performance during the Reporting Period?

 

A   Relative to the ICE BofAML Index, an overweight position in energy-related high yield corporate bonds boosted the Fund’s results. In addition, the Fund benefited from its exposure to BBB-rated investment grade credits. Conversely, selection of industrial-related high yield corporate bonds detracted from the Fund’s performance. An underweight in consumer cyclical high yield corporate bonds, as well as a slight overweight in emerging markets debt, further diminished the Fund’s relative results.

 

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FUND RESULTS

 

 

 

 

Q   How did the Fund’s tactical duration strategy and yield curve positioning affect performance during the Reporting Period?

 

A   During the Reporting Period, the Fund’s tactical duration strategy added to returns. Specifically, our decision to lengthen the Fund’s duration position through interest rate swaps contributed positively, as interest rates fell during the Reporting Period. We do not actively manage the Fund’s yield curve positioning as part of our investment process. (Yield curve is a spectrum of interest rates based on maturities of varying lengths.)

 

Q   What changes were made to the Fund’s fixed income weightings during the Reporting Period?

 

A   During the Reporting Period, we increased the Fund’s exposures to metals and mining and to packaging by decreasing its underweight positions versus the ICE BofAML Index in those two market segments. We increased the Fund’s overweight in the technology market segment, and we reduced the Fund’s overweight in cellular telecommunications. We shifted the Fund from an overweight in the health care market segment to a relatively neutral position and moved its overweight in the non-cable media market segment to an underweight position. At the end of the Reporting Period, the Fund’s largest overweights relative to the ICE BofAML Index were in the technology and banking market segments, while its largest underweight positions were in the gaming and lodging and the energy market segments.

 

Q   How did the Fund use derivatives and similar instruments during the Reporting Period?

 

A   As mentioned previously, the Income Builder Team wrote equity index options on a portion of the Fund’s equity allocation in an effort to generate additional cash flow and potentially reduce volatility (negative impact on performance). In addition, total return swaps were employed as part of the systematic strategy to buy and sell equity index options (negative impact). Within the Fund’s fixed income allocation, the Income Builder Team used interest rates swaps and U.S. Treasury futures as cost-efficient instruments to provide greater precision and versatility in the management of duration (both had a positive impact). To hedge against currency risk (that is, the risk that certain currencies might fluctuate in value), the Fund employed currency forwards to express our views on a given currency (neutral impact). Finally, equity futures were utilized within the Fund overall to help manage cash balances during the Reporting Period (positive impact).

 

Q   Were there any changes to the Fund’s portfolio management team during the Reporting Period?

 

A   Effective February 19, 2019, Raymond Chan no longer served as a portfolio manager of the Fund, and Christopher Lvoff became a portfolio manager of the Fund. As of March 1, 2019, David Beers no longer served as a portfolio manager of the Fund, and Ashish Shah became a portfolio manager of the Fund. Effective July 17, 2019, Daniel Lochner no longer served as a portfolio manager of the Fund. By design, all investment decisions for the Fund are performed within a co-lead or team structure, with multiple subject matter experts. This strategic decision making has been the cornerstone of our approach and ensures continuity in the Fund. At the end of the Reporting Period, the portfolio managers for the Fund were Ashish Shah, Ron Arons, Collin Bell, Charles “Brook” Dane and Christopher Lvoff.

 

Q   What is the Income Builder Team’s tactical view and strategy for the months ahead?

 

A  

The U.S. equity market experienced robust performance from January 2019 through the end of the Reporting Period, with falling interest rates and the dovish shift in Fed monetary policy helping to boost U.S. equity prices. That said, volatility increased during the third calendar quarter, stemming from ongoing geopolitical and trade tensions as well as from heightened investor fears of a potential U.S. recession. In addition, the Income Builder Team saw more signs the economic cycle was aging. Accordingly, at the end of the Reporting Period, we expected choppy equity market conditions in the near term, though without clearer indications of deteriorating fundamentals, we thought it was too early to position the Fund for a downturn in global economic growth or corporate earnings. We planned to maintain our focus on what we believe are high quality companies with strong market positions and experienced management teams. In our opinion, emphasizing these durable businesses can potentially set the stage for outperformance amidst heightened volatility. Fundamental, bottom-up stock selection will continue to drive our process, not headlines or investor sentiment, regardless of the market direction. We maintained high conviction in the companies owned by the equity portion of the Fund at the end of the Reporting Period, and we believed they have the potential to outperform relative to the broader market regardless of the growth environment. Overall, we expected to continue focusing on undervalued companies we believe are in control of their own future, such as innovators with differentiated products, companies with low-cost structures and firms that

 

6


FUND RESULTS

 

 

  have been investing in their own businesses and are poised to gain market share. We planned to maintain our discipline in identifying companies with what we consider to be strong or improving balance sheets, led by quality management teams and trading at discounted valuations, seeking to generate long-term outperformance.

 

  

Within the fixed income allocation, the Fund remained overweight U.S. high yield corporate bonds at the end of Reporting Period. Fundamentals had stopped improving, in our view, but corporate leverage had decreased and interest coverage ratios had improved even though top-line revenue gains had slowed. (Interest coverage ratios measure a company’s ability to fulfill its obligations to make interest payments on its outstanding debt.) We also saw indications of profit margin pressure. Nevertheless, we believed the macroeconomic environment remained healthy enough to support revenues, and we expected central bank stimulus to support continued access to the debt markets for better-quality high yield corporate bond issuers, as investor demand for higher-yielding assets persisted. With the Fed’s more dovish stance, we anticipated easier financial conditions and saw a lower near-term risk of recession and crude oil price shocks. However, there remained potential for ongoing interest rate volatility, including a more aggressive than market anticipated unwinding of Fed monetary policy or an inflation shock, higher risk premiums on the contagion from idiosyncratic risks or an escalation of geopolitical tensions. Market volatility in response to U.S.-China trade tensions may also continue in the face of prolonged uncertainty, in our opinion. Increased volatility in the equity market could also increase risk, as equity market volatility has historically been a headwind for high yield spreads (or yield differentials versus U.S. Treasuries). While not our base case, a further downshift in global economic growth poses another potential risk. In terms of its positioning at the end of the Reporting Period, the Fund was materially underweight energy-related high yield corporate bonds due to elevated levels of distress. Between January 2019 and the end of the Reporting Period, the energy market segment provided more than a third of the total number of defaults, as companies struggled to raise capital. Going forward, we planned to focus the Fund on U.S.-oriented market segments, including consumer non-cyclicals, cable and building materials. We expected to limit its exposure to autos and metals and mining, as these market segments tend to be more vulnerable to market volatility driven by trade tensions and slowing economic growth. From a ratings perspective, we favored B-rated high yield corporate bonds over BB-rated high yield corporate bonds, as BB-rated spreads had reached historically tight levels during the Reporting Period. In terms of maturities, we had a preference at the end of the Reporting Period for intermediate-term bonds, as we believed they offered the best carry and roll-down opportunities. (Carry involves borrowing at a low interest rate and investing in an asset that provides a higher rate of return. Roll-down opportunities arise when the value of a bond converges to par as maturity is approached.) In our view, the valuations of longer-maturity, higher quality bonds appeared extended at the end of the Reporting Period.

 

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FUND BASICS

 

Income Builder Fund

as of October 31, 2019

 

  TOP TEN EQUITY HOLDINGS AS OF 10/31/191
     Holding   % of Net Assets      Line of Business
 

Johnson & Johnson

    1.2   

Pharmaceuticals

 

Chevron Corp.

    1.1     

Oil, Gas & Consumable Fuels

 

Medtronic PLC

    1.0     

Health Care Equipment & Supplies

 

Royal Dutch Shell PLC ADR Class A

    1.0     

Oil, Gas & Consumable Fuels

 

Cisco Systems, Inc.

    0.9     

Communications Equipment

 

The Home Depot, Inc.

    0.9     

Specialty Retail

 

JPMorgan Chase & Co.

    0.8     

Banks

 

Verizon Communications, Inc.

    0.8     

Diversified Telecommunication Services

 

Comcast Corp. Class A

    0.8     

Media

   

Honeywell International, Inc.

    0.7     

Industrial Conglomerates

 

1    The top 10 holdings may not be representative of the Fund’s future investments.

 

FUND’S EQUITY SECTOR ALLOCATIONS VS. BENCHMARK2
As of October 31, 2019      

 

LOGO

 

 

2   The Fund is actively managed and, as such, its composition may differ over time. Consequently, the Fund’s overall sector allocations may differ from the percentages contained in the graph above. The graph categorizes investments using the Global Industry Classification Standard (“GICS”), however, the sector classifications used by the portfolio management team may differ from GICS. The percentage shown for each investment category reflects the value of investments in that category as a percentage of the total value of the Fund’s Equity investments market value (excluding investments in the securities lending reinvestment vehicle, if any). Investments in the securities lending reinvestment vehicle represented 0.0% of the Fund’s net assets as of October 31, 2019. The graph depicts the Fund’s investments but may not represent the Fund’s market exposure due to the exclusion of certain derivatives, if any, as listed in the Additional Investment Information section of the Schedule of Investments.

 

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FUND BASICS

 

 

 

FUND’S FIXED INCOME FUND COMPOSITION3

 

 

LOGO

 

 

3    The percentage shown for each investment category reflects the value of investments in that category as a percentage of the Fund’s Fixed Income investments. Short-term investments represent commercial papers. The graph depicts the Fund’s investments but may not represent the Fund’s market exposure due to the exclusion of certain derivatives, if any, as listed in the Additional Investment Information section of the Schedule of Investments.

 

For more information about your Fund, please refer to www.GSAMFUNDS.com. There, you can learn more about your Fund’s investment strategies, holdings, and performance.

 

9


GOLDMAN SACHS INCOME BUILDER FUND

 

Performance Summary

October 31, 2019

 

The following graph shows the value, as of October 31, 2019, of a $1,000,000 investment made on November 1, 2009 in Institutional Shares. For comparative purposes, the performance of the Fund’s current benchmarks, the Russell 1000® Value Index and the ICE BofAML BB to B U.S. High Yield Constrained Index, are shown. Performance reflects applicable fee waivers and/or expense limitations in effect during the periods shown and in their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns set forth below represent past performance. Past performance does not guarantee future results. The Fund’s investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted below. Please visit our web site at www.GSAMFUNDS.com to obtain the most recent month-end returns.

 

Income Builder Fund’s 10 Year Performance

Performance of a $1,000,000 Investment, with distributions reinvested, from November 1, 2009 through October 31, 2019.

 

LOGO

 

Average Annual Total Return through October 31, 2019*      One Year        Five Years        Ten Years      Since Inception

Class A

           

Excluding sales charges

     13.34%        4.62%        7.95%     

Including sales charges

     7.12%        3.44%        7.34%     

 

Class C

           

Excluding contingent deferred sales charges

     12.44%        3.83%        7.15%     

Including contingent deferred sales charges

     11.41%        3.83%        7.15%     

 

Institutional Class

     13.76%        5.04%        8.38%     

 

Investor (Commenced August 31, 2010)

     13.59%        4.88%        N/A      8.16%

 

Class P (Commenced April 16, 2018)

     13.77%        N/A        N/A      7.87%

 

Class R6 (Commenced July 31, 2015)

     13.72%        N/A        N/A      5.60%

 

 

*   These returns assume reinvestment of all distributions at NAV and reflect a maximum initial sales charge of 5.50% for Class A and the assumed contingent deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional, Investor, Class P and Class R6 Shares do not involve a sales charge, such a charge is not applied to their Average Annual Total Return.

 

10


FUND RESULTS

 

Goldman Sachs Rising Dividend Growth Fund

 

Investment Objective

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

Portfolio Management Discussion and Analysis

Below, the Quantitative Investment Strategies (“QIS”) portfolio management team, the Goldman Sachs Global Portfolio Solutions Group and the Dividend Assets Capital, LLC (“DAC”) portfolio management team, the Fund’s sub-adviser, discuss the Goldman Sachs Rising Dividend Growth Fund’s (the “Fund”) performance and positioning for the 12-month period ended October 31, 2019 (the “Reporting Period”).

 

Q   How did the Fund perform during the Reporting Period?

 

A   During the Reporting Period, the Fund’s Class A, Class C, Institutional, Investor, Class P, Class R and Class R6 Shares generated average annual total returns, without sales charges, of 10.41%, 9.55%, 10.85%, 10.73%, 10.86%, 10.08% and 10.78%, respectively. These returns compare to the 14.33% average annual total return of the Fund’s benchmark, the Standard & Poor’s® 500 Index (with dividends reinvested) (the “S&P 500 Index”), during the same time period.

 

Q   What economic and market factors most influenced the U.S. equity markets as a whole during the Reporting Period?

 

A   The S&P 500 Index gained 2.04% in November 2018 following a volatile prior month. Trade and political uncertainty persisted, but U.S. equities were buoyed by dovish comments from Federal Reserve (“Fed”) Chair Jerome Powell and by seemingly encouraging progress toward China-U.S. trade talks. (Dovish language tends to suggest lower interest rates; opposite of hawkish.) The U.S. midterm elections on November 6th resulted in a divided government, as had been widely anticipated, with the Democrats gaining control of the House of Representatives and the Republicans maintaining their majority in the Senate. U.S. economic data remained strong, with Gross Domestic Product (“GDP”) growing at an annualized pace of 3.5% in the third quarter of 2018, following a 4.2% annualized GDP growth rate in the second calendar quarter. However, the rally was short-lived, as U.S. equities plunged in December 2018 on renewed investor fears, sparked by the arrest of a Chinese technology executive, the partial federal government shutdown and the U.S. President’s criticism of Fed Chair Powell.

 

   

The S&P 500 Index rose 13.65% in the first quarter of 2019. After a volatile end to 2018, the rally to begin 2019 marked the best first quarter performance for the S&P 500 Index since 1998. Fed commentary provided a supportive background for U.S. equities, as Fed Chair Powell reiterated a “patient” approach to monetary policy that included a pause in interest rate hikes and a nearing end to the balance sheet runoff, or the shrinking of the Fed balance sheet as securities mature. The U.S. unemployment rate remained well below trend at 3.8% in February 2019, with a steady increase in wages of 3.4% year over year. Housing data continued to show strength in the first quarter, with new home sales reaching 667,000 in February, bringing the three-month average up to 630,000. Strength in housing data could be partially attributed to a steep decline in mortgage rates, resulting from a more cautious Fed. The University of Michigan Consumer Sentiment Index was a point of significant strength in the U.S. economy, climbing in each month of the first quarter of 2019 and eventually reaching 98.4 in March, its highest level in six months. Economic growth concerns, however, failed to completely abate, as fourth quarter 2018 GDP growth was revised down in March to 2.2%. While the revision was evidence of a slowing U.S. economy, the result was largely priced in by equity markets and thus had a limited effect on stock prices outside of the financials sector, which tends to be more interest rate-sensitive.

 

   

The S&P 500 Index gained 4.30% in the second quarter of 2019, which, when combined with the sharp rally of the prior quarter, brought the S&P 500 Index to close its best first half of a calendar year since 1997. Trade tensions between the U.S. and China dominated headlines and broadly added noise to the markets. (Noise refers to information or activity that confuses or misrepresents genuine underlying trends.) In

 

11


FUND RESULTS

 

 

April 2019, there was an optimistic outlook on a possible trade deal, but optimism then faded in May when the U.S. President threatened to raise then-current tariffs and impose new duties on $300 billion of additional Chinese imports. Sanctions were temporarily placed on a Chinese telecommunications giant, until they were lifted in June, when any additional tariffs or compromise were postponed. Also during the quarter, the market kept a close eye on the Fed. After steadily raising interest rates since 2015, the Fed alluded during the second quarter to a more accommodative approach. The market consensus had largely priced in at least one interest rate cut by the end of 2019, if not sooner. Economic indicators were mixed during the quarter, with consumer sentiment remaining elevated but nonfarm payrolls and manufacturing indices across the board falling short of market expectations.

 

   

The S&P 500 Index rose 1.70% in the third quarter of 2019. During the third quarter, global economic data continued to slow, prompting the Fed to adopt measures of monetary easing. The Fed cut interest rates in July and September — its first interest rate cuts since 2008 — in an effort to prolong the U.S. economic expansion. Economic data was largely mixed, with manufacturing data and consumer confidence showing signs of weakness, but domestic demand held steady in the context of a strong labor market.

 

   

The S&P 500 Index increased 2.17% in October 2019. U.S. equities welcomed signs of an easing in geopolitical tensions during the month, as U.S. and Chinese authorities appeared to move closer to a partial trade agreement, and the U.K. edged back from a no-deal Brexit. (Brexit is the term for the U.K.’s exit from, or path out of, the European Union.) U.S. economic data continued to soften, with the majority of weakness manifesting in the trade-sensitive manufacturing sector. Consumer confidence and the pace of job growth also fell moderately, and this overall picture of slowing economic momentum led the Fed to cut interest rates for the third time this calendar year.

 

   

For the Reporting Period overall, real estate, information technology and utilities were the best performing sectors in the S&P 500 Index. The weakest performing sector in the S&P 500 Index was energy, followed at some distance by health care and financials.

 

   

Within the U.S. equity market, all capitalization segments posted solid positive absolute returns, but on a relative basis, large-cap stocks, as measured by the Russell 1000® Index, performed best, followed closely by mid-cap stocks, as measured by the Russell Midcap® Index, and then, at some distance, by small-cap stocks, as measured by the Russell 2000® Index. From a style perspective, growth-oriented stocks significantly outpaced value-oriented stocks across the capitalization spectrum. (All as measured by the FTSE Russell indices.)

 

Q   What economic and market factors most influenced energy MLPs as a whole during the Reporting Period?

 

A   In the first months of the Reporting Period, fears about a U.S. economic slowdown, led by weakness abroad and trade tensions with China, triggered a global equity market sell-off, including energy Master Limited Partnerships (“MLPs”). Brent crude oil active contracts lost 26.8% between October 31, 2018 and December 31, 2018, while economically-sensitive indices like the Dow Jones Transportation Average declined approximately 10% and the S&P 500 Index shed approximately 7.6%. As a result, Fed policymakers paused their interest rate hiking cycle and signaled monetary policy would remain accommodative and “patient” with any future interest rate increases. Risky assets subsequently rebounded from their December 2018 lows in the new calendar year, including equity markets and commodity prices. In the meantime, U.S. economic data, such as Purchasing Managers Index (“PMI”), Consumer Sentiment Index and labor market data all came in above consensus expectations. China’s PMI also reverted from contraction to expansion, suggesting its government’s stimulus measures put in place in 2018 started to channel through different economic sectors. With the relief rally at the start of 2019, Brent crude oil active contracts jumped 31.6% between January 1, 2019 and April 30, 2019. For the same time period, the Dow Jones Transportation Average rebounded approximately 18.8% and the S&P 500 Index was up approximately 18.3%.

 

   

U.S. economic growth slowed somewhat during the third quarter of 2019 to less than 2% on a year over year basis. Industrial production growth was weak, partially offset by healthy consumer spending. The International Monetary Fund lowered its expectations for global economic growth as well, as U.S.-China trade tensions, Brexit and Middle East geopolitical risks created uncertainties, thus increasing the volatility of commodity prices, as concerns about an economic slowdown can lead to a reduction of energy demand. The Fed and other major central banks around the world enacted increasingly accommodative monetary policies in an effort to prevent an economic meltdown. On the positive side, the cost of capital remained relatively

 

12


FUND RESULTS

 

 

inexpensive, and the capital markets remained open to most of the midstream energy companies. (The midstream component of the energy industry is usually defined as those companies providing products or services that help link the supply side, i.e. energy producers, and the demand side, i.e. energy end-users, for any type of energy commodity. Such midstream businesses can include, but are not limited to, those that process, store, market and transport various energy commodities.)

 

   

In this persistently low commodity demand environment, many exploration and production companies were rationalizing their drilling capital expenditures, with many reducing the number of rigs operating. Even with fewer rigs, however, U.S. producers hit 12 million barrels per days early in 2019 and stayed above this level, with the exception of July 2019. As of the end of October 2019, the Energy Information Administration reported 12.6 million barrels per day of production and 696 oil rigs versus 11.5 million barrels per day with 874 rigs one year prior. Resilient production triggered oversupply fears from market participants.

 

   

Front-month West Texas Intermediate (“WTI”) crude contract prices spent much of the Reporting Period trading between $50 to $65 per barrel, with an average price of $57 per barrel. Even with the attack on Saudi Arabian oil sites temporarily disrupting crude oil supply, an increase in oil prices was not sustained, only an increase in oil price volatility. In this environment, midstream assets operators, as measured by the Alerian U.S. Midstream Energy Index (“AMNA”), which is a broad-based composite of North American energy infrastructure companies, delivered a total return of 6.42% for the Reporting Period. The energy MLP-based Alerian MLP Index (“AMZ”) posted a total return of -6.53%, and the S&P 500 Index energy sector generated a total return of -11.04% for the Reporting Period. To compare, natural gas contract prices and WTI crude oil contract prices returned -10.14% and -17.20%, respectively, during the Reporting Period.

 

   

AMNA’s outperformance of AMZ indicated, in our view, strength and investor acceptance for non-MLP structured midstream assets operators, especially for those Canadian companies operating in the space. AMNA’s and AMZ’s outperformance of pure energy companies indicated, in our opinion, that the attractive yield and improved business fundamentals for the midstream space were embraced by investors seeking income and energy commodity exposure.

 

   

Notably, during the Reporting Period, the topic of simplification — through a Limited Partnership roll up or an Incentive Distribution Rights (“IDRs”) buy in or a structural change from an MLP to a C-corp — to seek to attract a broad investor base was at the forefront of traditional MLP management decision making. (IDRs give a general partner an increasing share of a limited partnership’s incremental distributable cash flow. Used in MLPs, IDRs outline per-unit distribution increases to the limited partners. IDRs are used to align the interests of all parties in a partnership. A C-corp, or C-corporation, is a corporation in which the owners, or shareholders, are taxed separately from the entity.) As a result, there was increased merger activity between limited partners and general partners during the Reporting Period. Some of these corporate events caused heightened volatility. Some became a catalyst for superior performance, for as idiosyncratic risks increased, actively managed strategies outperformed passively managed strategies during the Reporting Period.

 

Q   What key factors were responsible for the Fund’s performance during the Reporting Period?

 

A   While the Fund posted solid absolute gains, it underperformed the S&P 500 Index on a relative basis for the Reporting Period.

 

   

During the Reporting Period, the Fund’s dividend-paying investments underperformed the S&P 500 ex-Energy Index, the benchmark used for the dividend-paying growers portion of the Fund. Stock selection detracted from relative results within this portion of the Fund. Sector allocation contributed positively, albeit modestly.

 

   

For the Reporting Period, the Fund’s MLP assets outperformed the Alerian MLP Index, the benchmark used for the MLP portion of the Fund. Such outperformance was driven by favorable stock selection and, to a lesser degree, by effective allocation positioning. In particular, DAC’s focus on high quality midstream assets operators and its ability to construct the MLP portion of the Fund in a way to reduce idiosyncratic risks was key to its relative performance during the Reporting Period, as the industry continued to face macro and fundamental challenges. On a factor level, the Fund’s MLPs had positive active exposure to larger market cap size, higher growth and timely trade activity and negative exposure to high yield, high leverage and deep value. These factors are consistent with DAC’s investment strategy of

 

13


FUND RESULTS

 

 

seeking to capture returns from high quality midstream operators. A position in cash within this portion of the Fund, albeit modest, detracted from relative results during the Reporting Period.

 

Q   Which equity market sectors most significantly affected Fund performance during the Reporting Period?

 

A   The dividend-paying growers portion of the Fund does not take explicit sector bets relative to the S&P 500 ex-Energy Index but rather allocations are the result of stock selection. That said, the sectors that detracted most on a relative basis to the S&P 500 ex-Energy Index during the Reporting Period were industrials, consumer discretionary and communication services. Partially offsetting these detractors were information technology, materials and utilities, which contributed positively to this portion of the Fund’s relative results.

 

Q   Which stocks detracted significantly from the Fund’s performance during the Reporting Period?

 

A   Detracting most from the Fund’s results relative to the S&P 500 ex-Energy Index during the Reporting Period were overweight positions in multimedia company CBS and package and freight delivery and logistics provider FedEx and an underweight position in software behemoth Microsoft. CBS and FedEx underperformed the S&P 500 ex-Energy Index and Microsoft outperformed the S&P 500 ex-Energy Index during the Reporting Period.

 

Q   What were some of the Fund’s best-performing individual stocks during the Reporting Period?

 

A   The top individual contributors to the Fund’s relative performance during the Reporting Period were overweight positions in semiconductor companies Xilinx, Applied Materials and KLA, each of which outperformed the S&P 500 ex-Energy Index during the Reporting Period.

 

Q   Which industries within the Alerian MLP Index most significantly affected Fund performance during the Reporting Period?

 

A   As measured by the Alerian MLP Index, the GICS sub-industries that contributed most positively on a relative basis during the Reporting Period were oil and gas storage and transportation; oil and gas equipment and services; and renewable electricity. Effective security selection helped most within oil and gas storage and transportation, while having an overweight to oil and gas transportation and services and exposure to renewable electricity, which each outperformed the Alerian MLP Index during the Reporting Period, boosted relative results most.

 

   

The sub-industries that detracted most from the MLP portion of the Fund during the Reporting Period were oil and gas refining and marketing; coal and consumable fuels; and oil and gas exploration and production. Both weak stock selection within and having an underweight to oil and gas refining and marketing hurt most. Having overweights to both coal and consumable fuels and oil and gas exploration and production detracted.

 

Q   What were some of the Fund’s best-performing MLPs during the Reporting Period?

 

A   Relative to the Alerian MLP Index, among those MLPs that contributed most to the Fund’s performance during the Reporting Period were USA Compression Partners LP, ONEOK Inc. and Cheniere Energy Partners LP. Each of these holdings delivered a double-digit positive absolute return during the Reporting Period, and the MLP portion of the Fund was overweight USA Compression Partners LP and Cheniere Energy Partners LP and had exposure to ONEOK Inc, which is not a component of the Alerian MLP Index but which significantly outperformed the Alerian MLP Index..

 

Q   Which MLPs detracted significantly from the Fund’s performance during the Reporting Period?

 

A   Among those MLPs detracting most from the Fund’s results relative to the Alerian MLP Index were overweight positions in Antero Midstream Corp. and Alliance Resources Partners LP and exposure to Targa Resources Corp., which is not a component of the Alerian MLP Index. Each posted a double-digit negative return within the MLP portion of the Fund during the Reporting Period.

 

Q   How did the Fund use derivatives during the Reporting Period?

 

A   The MLP portion of the Fund did not use derivatives during the Reporting Period. The dividend-paying equity investments portion of the Fund used equity index futures on an opportunistic basis during the Reporting Period to equitize its modest cash position. In other words, we put the Fund’s excess cash holdings to work by using them as collateral for the purchase of equity index futures. The use of these derivatives did not have a material impact on Fund results during the Reporting Period.

 

14


FUND RESULTS

 

 

Q   Did the Fund make any significant equity purchases or sales during the Reporting Period?

 

A   The dividend-paying growers portion of the Fund uses a systematic, rules-based approach and thus equity purchases and sales are based solely on that quantitative process.

 

Q   Did the Fund make any significant purchases or sales of MLPs during the Reporting Period?

 

A   Notably, the Alerian MLP Index eliminated Alliance Resource Partners LP and USA Compression Partners LP during the Reporting Period, as it continues to refine its inclusion methodology. Each was a holding of the MLP portion of the Fund during the Reporting Period. Also Antero Resources Corp. sold Antero Midstream Partners LP to Antero Midstream Corp., announced in early October 2018, with the transaction closing mid-March 2019. The MLP portion of the Fund owned Antero Midstream Corp. before the deal and since then has reduced the Fund’s position.

 

   

During the Reporting Period, the MLP portion of the Fund initiated a position in TC Energy (“TRP”) and DCP Midstream LP (“DCP”). We established a Fund position in TRP, as we view it as a compelling total return opportunity. TRP is among the largest North American natural gas pipeline operators and storage providers. TRP has been a consistent dividend payer since 2000 despite challenging energy prices. At the time of purchase, we expected TRP to accelerate its earnings before interest, taxes, depreciation and amortization growth going forward due to multiple project start-ups that could potentially support higher dividend growth and, as a result, a stronger valuation. We established a Fund position in DCP, as we believed its valuation compression was overdone, and incremental improvement should support a better valuation, resulting potentially in a robust total return opportunity. Growing earnings as volumes transported and processed on existing assets increase and new projects come into service, combined with what we view as its stable cash flow, meaningful scale and basin diversification, could be near to medium term catalysts, in our opinion.

 

   

Conversely, the MLP portion of the Fund eliminated its position in EnLink Midstream LLC (“ENLC”) and Summit Midstream Partners LP (“SMLP”). We exited the Fund’s position in ENLC, as we believe its frequent management changes and what we see as its poor strategy execution adds additional risks during a challenging energy environment. We sold the Fund’s position in SMLP after it announced a distribution cut in early 2019. Based on our investment criteria, the distribution cut triggered DAC’s sell discipline. The timing of our sale proved prudent, as SMLP’s share price declined significantly since its distribution cut announcement.

 

Q   Were there any notable changes in the Fund’s equity sector weightings during the Reporting Period?

 

A   As mentioned earlier, under the QIS team’s investment approach, the dividend-paying growers portion of the Fund does not take sector bets by design. Therefore, the dividend-paying investments portion of the Fund, using a quantitative process, strove to be similar to the S&P 500 ex-Energy Index in terms of sector allocation. We seek to provide exposure to high quality, dividend-paying growers within each sector.

 

Q   Were there any notable changes in the Fund’s MLP weightings during the Reporting Period?

 

A   During the Reporting Period, the Alerian MLP Index updated its methodology guidance and inclusion rules. As a result, the Alerian MLP Index no longer has exposure to gas utilities; oil and gas exploration and production; oil and gas equipment services; and coal and consumable fuels. The only GICS sub-industries the Alerian MLP Index has exposure to since November 30, 2018 are oil and gas storage and transportation and oil and gas refining and marketing. Given these changes, the MLP portion of the Fund had out-of-benchmark exposure to oil and gas equipment and services; oil and gas exploration and production; coal and consumable fuels; and renewable electricity at the end of the Reporting Period. Based on GICS sub-industries, the MLP portion of the Fund had an underweighted allocation relative to the Alerian MLP Index in oil and gas storage and transportation and had no exposure to oil and gas refining and marketing at the end of the Reporting Period.

 

   

At the end of the Reporting Period, the MLP portion of the Fund had its largest allocation in the oil and gas storage and transportation sub-industry, equivalent to approximately 91.3% of the Fund’s MLP assets, excluding cash.

 

Q   How was the dividend-paying investments portion of the Fund positioned relative to the S&P 500 ex-Energy Index at the end of the Reporting Period?

 

A  

As mentioned earlier, it is not part of the dividend-paying investments portion of the Fund’s approach to take sector bets. Thus, at the end of October 2019, the dividend-paying investments portion of the Fund had rather neutral positions

 

15


FUND RESULTS

 

 

in each sector of the S&P 500 ex-Energy Index, with the exception of information technology and communication services, wherein underweighted positions were held.

 

Q   Were there any changes to the Fund’s portfolio management team during the Reporting Period?

 

A   There were no changes in either portion of the Fund’s portfolio management team during the Reporting Period.

 

Q   What is the Fund’s tactical view and strategy for the months ahead?

 

A   The Fund seeks long-term growth of capital and current income. Within the dividend-paying growers sleeve, we maintained confidence at the end of the Reporting Period in high quality business models that have demonstrated commitment to grow their dividend in a rather stable manner.

 

   

As for MLPs, we believed at the end of the Reporting Period that uncertainty around U.S.-China trade tensions, a global economic slowdown and Middle East turmoil remained vital factors impacting market sentiment toward near-term crude oil prices. On the industry level, the rate of shale production growth, rig counts and inventory data, as well as regulatory changes, remained just as crucial, as the U.S. becomes a major swing producer. (A swing producer is a supplier or a close oligopolistic group of suppliers of any commodity, controlling its global deposits and possessing large spare production capacity. A swing producer is able to increase or decrease commodity supply at minimal additional internal cost, and thus able to influence prices and balance the markets, providing downside protection in the short to middle term.) With that said, we believed that with such uncertainty, many opportunities for investment may present upside potential in 2020. At the end of the Reporting Period, we were optimistic around incremental improvement of U.S.-China trade relations, a rebound of the global economy, and a crude oil supply/demand deficit supporting moderate oil price recovery in 2020.

 

   

On a micro level, we believed midstream companies and MLPs had started to provide improved total return opportunities, as their distributions stabilized in comparison to the decline trend of the past couple of years and their dividend yields were relatively higher. During the Reporting Period, we continued to see a valuation gap between publicly-traded midstream companies, including MLPs, and their private counterparts. Private equity and pension funds have been actively seeking deeply discounted assets either with high leverage or have challenging growth aspects otherwise not desirable from public investors.

 

   

Most of the midstream companies and MLPs were able to deliver improved growth, stronger balance sheets and less complicated organization structures during the Reporting Period. As investors become more selective in the industry, performance dispersion widened. Although the midstream space overall had yet to return to historical valuation levels, further valuation re-rating may be well underway, as midstream companies’ and MLP’s management teams work to restore investor confidence with more consistent messaging and improved credibility. (When the market changes its view of a company, industry or sector sufficiently to make calculation ratios, such as price/earnings ratios, substantially higher or lower, this is a re-rating.)

 

   

Additionally, we believed opportunities remained around exports. Crude oil exports from the U.S. are widely expected to reach 4 million barrels per day in 2020, having reached 3.5 million barrels per day in March 2019, an almost one million barrel per day increase from 2018. Natural gas exports during the first half of 2019 doubled year over year for the second consecutive year. As more liquid natural gas facilities have come online during the second half of 2019, expanding U.S. liquid natural gas export capacity is expected by many analysts to rise to 8.9 billion cubic feet per day by the end of 2020. Midstream operators play a vital role, as they transport and store the barrels from producing basins to exporting terminals. In our view, the MLP portion of the Fund was well positioned at the end of the Reporting Period to benefit from this secular trend. We feel the capital markets remained accommodative to high quality midstream companies, with project returns being well above the cost of capital, potentially creating long-term economic value for shareholders. The MLP portion of the Fund is, we believe, positioned with what we consider to be the strongest companies whose businesses touch several points of the supply chain, with limited commodity exposure through long-term contracts or value-added services. Over the long term, we believe the MLP portion of the Fund’s focus on high quality has produced superior relative returns compared to the Alerian MLP Index, despite near-term market volatility. As always, we continue to monitor domestic and global economies, geopolitical factors, interest rates and equity market fundamentals as we actively manage the Fund.

 

16


FUND RESULTS

 

Index Definitions

 

The Alerian MLP Index (AMZ) is a widely recognized, unmanaged index that includes a composite of the 50 most prominent energy MLPs. The Index returns do not reflect the deduction of expenses, which have been deducted from net returns. The Index return assumes reinvestment of all distributions and does not reflect the deduction of taxes and fees.

The Alerian U.S. Midstream Energy Index (AMNA) is a broad-based composite of U.S. energy infrastructure companies. The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMNA) and on a total return basis (AMNAX).

The Dow Jones Transportation Average is a price-weighted average of 20 transportation stocks traded in the U.S.

The S&P 500 Ex-Energy is designed to provide broad market exposure except for members of the energy sector.

S&P 500® Index is a U.S. stock market index based on the market capitalizations of 500 large companies having common stock listed on the New York Stock Exchange or NASDAQ. The S&P 500® Index components and their weightings are determined by S&P Dow Jones Indices.

It is not possible to invest directly in an unmanaged index.

The University of Michigan Consumer Sentiment Index is a monthly survey of U.S. consumer confidence levels conducted by the University of Michigan. It is based on telephone surveys that gather information on consumer expectations regarding the overall economy. The index is designed to capture the mood of American consumers with regard to their economic well-being and outlook. Because consumer spending accounts for roughly 70% of U.S. gross domestic product, the index is regarded as one of the many important economic indicators followed by businesses, policymakers and participants in the investment community.

The Purchasing Managers Index (“PMI”) is an index of the prevailing direction of economic trends in the manufacturing and service sectors.

The Consumer Sentiment Index measures consumers’ attitudes towards the economy.

 

17


FUND BASICS

 

Rising Dividend Growth Fund

as of October 31, 2019

 

  TOP TEN HOLDINGS AS OF 10/31/191
     Holding   % of Net Assets      Line of Business
  Comcast Corp. Class A     2.3    Media
  The Walt Disney Co.     2.3      Entertainment
  Enterprise Products Partners LP     2.0      Oil, Gas & Consumable Fuels
  Omnicom Group, Inc.     1.7      Media
  Magellan Midstream Partners LP     1.6      Oil, Gas & Consumable Fuels
  Energy Transfer LP     1.5      Oil, Gas & Consumable Fuels
  UnitedHealth Group, Inc.     1.5      Health Care Providers & Services
  CBS Corp. Class B     1.5      Media
  MPLX LP     1.4      Oil, Gas & Consumable Fuels
    CVS Health Corp.     1.3      Health Care Providers & Services

 

1    The top 10 holdings may not be representative of the Portfolio’s future investments. The top 10 holdings exclude investments in money market funds.

 

FUND VS. BENCHMARK SECTOR ALLOCATION2
As of October 31, 2019

 

 

LOGO

 

 

2    The Fund is actively managed and, as such, its composition may differ over time. Consequently, the Fund’s overall sector allocations may differ from the percentages contained in the graph above. The graph categorizes investments using the Global Industry Classification Standard (“GICS”), however, the sector classifications used by the portfolio management team may differ from GICS. Underlying sector allocations of Investment Companies held by the Fund are not reflected in the graph above. The percentage shown for each investment category reflects the value of investments in that category as a percentage of market value. The graph depicts the Fund’s investments but may not represent the Fund’s market exposure due to the exclusion of certain derivatives, if any, as listed in the Additional Investment Information section of the Schedule of Investments.

 

 

For more information about your Fund, please refer to www.GSAMFUNDS.com. There, you can learn more about your Fund’s investment strategies, holdings, and performance.

 

18


GOLDMAN SACHS RISING DIVIDEND GROWTH FUND

 

Performance Summary

October 31, 2019

 

The following graph shows the value, as of October 31, 2019, of a $1,000,000 investment made on November 1, 2009 in Institutional Shares. For comparative purposes, the performance of the Fund’s benchmark, the S&P 500 Index (with dividends reinvested), is shown. Performance reflects applicable fee waivers and/or expense limitations in effect during the periods shown and in their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. The returns set forth below represent past performance. Past performance does not guarantee future results. The Fund’s investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted below. Please visit our web site at www.GSAMFUNDS.com to obtain the most recent month-end returns.

 

Rising Dividend Growth Fund’s 10 Year Performance

Performance of a $1,000,000 Investment, with distributions reinvested, from November 1, 2009 through October 31, 2019.

 

LOGO

 

Average Annual Total Return through October 31, 2019*      One Year        Five Years        Ten Years      Since Inception

Class A

           

Excluding sales charges

     10.41%        5.65%        10.39%     

Including sales charges

     4.33%        4.46%        9.76%     

 

Class C

           

Excluding contingent deferred sales charges

     9.55%        4.86%        9.68%     

Including contingent deferred sales charges

     8.46%        4.86%        9.68%     

 

Institutional Class

     10.85%        6.08%        10.85%     

 

Investor (Commenced February 27, 2012)

     10.73%        5.92%        N/A      9.15%

 

Class P (Commenced April 23, 2018)

     10.86%        N/A        N/A      7.61%

 

Class R (Commenced February 27, 2012)

     10.08%        5.38%        N/A      8.60%

 

Class R6 (Commenced February 28, 2018)

     10.78%        N/A        N/A      7.29%

 

 

*   Effective February 27, 2012, the Rising Dividend Growth Fund, a series of Dividend Growth Trust (the “Predecessor Fund”), was reorganized into the Fund. As accounting successor to the Predecessor Fund, the Fund has assumed the Predecessor Fund’s historical performance. These returns assume reinvestment of all distributions at NAV and reflect a maximum initial sales charge of 5.50% for Class A and the assumed contingent deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional, Investor, Class P and Class R6 Shares do not involve a sales charge, such a charge is not applied to their Average Annual Total Return.

 

19


GOLDMAN SACHS INCOME BUILDER FUND

 

Schedule of Investments

October 31, 2019

 

Shares     Description  

Value

 
Common Stocks – 35.8%  
Aerospace & Defense – 0.6%  
  21,619     Northrop Grumman Corp.   $ 7,620,265  
  12,244     Raytheon Co.     2,598,299  
   

 

 

 
      10,218,564  

 

 

 
Banks – 2.5%  
  174,939     Bank of America Corp.     5,470,342  
  186,975     BB&T Corp.     9,919,024  
  27,548     Cullen/Frost Bankers, Inc.     2,481,524  
  110,175     JPMorgan Chase & Co.     13,763,061  
  35,560     M&T Bank Corp.     5,566,207  
  89,202     Wells Fargo & Co.     4,605,499  
   

 

 

 
      41,805,657  

 

 

 
Beverages – 0.5%  
  162,776     The Coca-Cola Co.     8,859,898  

 

 

 
Biotechnology – 0.2%  
  42,836     Gilead Sciences, Inc.     2,729,082  

 

 

 
Capital Markets – 1.2%  
  162,676     Morgan Stanley     7,491,230  
  85,944     Northern Trust Corp.     8,566,898  
  47,384     Singapore Exchange Ltd. ADR     4,683,909  
   

 

 

 
      20,742,037  

 

 

 
Chemicals – 1.2%  
  100,228     DuPont de Nemours, Inc.     6,606,027  
  19,275     Ecolab, Inc.     3,702,149  
  44,665     Linde PLC     8,859,303  
   

 

 

 
      19,167,479  

 

 

 
Commercial Services & Supplies – 0.4%  
  81,815     Republic Services, Inc.     7,159,631  

 

 

 
Communications Equipment – 1.1%  
  318,910     Cisco Systems, Inc.     15,151,414  
  124,470     Juniper Networks, Inc.     3,089,345  
   

 

 

 
      18,240,759  

 

 

 
Construction & Engineering – 0.6%  
  372,250     Vinci SA ADR     10,430,445  

 

 

 
Containers & Packaging – 0.6%  
  226,587     International Paper Co.     9,897,320  

 

 

 
Diversified Telecommunication Services – 0.8%  
  227,229     Verizon Communications, Inc.     13,740,538  

 

 

 
Electric Utilities – 0.6%  
  798,506     Enel SpA ADR(a)     6,172,451  
  59,206     Xcel Energy, Inc.     3,760,173  
   

 

 

 
      9,932,624  

 

 

 
Electrical Equipment – 0.6%  
  503,091     Schneider Electric SE ADR     9,322,276  

 

 

 
Electronic Equipment, Instruments & Components – 0.3%  
  51,590     TE Connectivity Ltd.     4,617,305  

 

 

 
Common Stocks – (continued)  
Energy Equipment & Services – 0.1%  
  107,194     Baker Hughes Co.   2,293,952  

 

 

 
Equity Real Estate Investment Trusts (REITs) – 2.2%  
  29,728     American Tower Corp.     6,483,082  
  27,589     AvalonBay Communities, Inc.     6,005,022  
  45,833     Camden Property Trust     5,241,920  
  144,530     Hudson Pacific Properties, Inc.     5,191,517  
  161,179     Klepierre SA     6,007,985  
  256,988     SITE Centers Corp.     3,991,024  
  45,639     Ventas, Inc.     2,971,099  
   

 

 

 
      35,891,649  

 

 

 
Food & Staples Retailing – 0.2%  
  116,903     The Kroger Co.     2,880,490  

 

 

 
Food Products – 0.6%  
  84,828     Nestle SA ADR     9,090,168  

 

 

 
Health Care Equipment & Supplies – 1.4%  
  152,737     Medtronic PLC     16,633,059  
  51,038     Zimmer Biomet Holdings, Inc.     7,054,983  
   

 

 

 
      23,688,042  

 

 

 
Health Care Providers & Services – 0.4%  
  109,260     CVS Health Corp.     7,253,771  

 

 

 
Hotels, Restaurants & Leisure – 0.8%  
  52,926     Las Vegas Sands Corp.     3,272,944  
  51,651     McDonald’s Corp.     10,159,752  
   

 

 

 
      13,432,696  

 

 

 
Household Durables – 0.3%  
  108,170     D.R. Horton, Inc.     5,664,863  

 

 

 
Household Products – 0.6%  
  85,538     The Procter & Gamble Co.     10,650,336  

 

 

 
Industrial Conglomerates – 0.7%  
  64,323     Honeywell International, Inc.     11,110,512  

 

 

 
Insurance – 1.7%  
  59,926     Chubb Ltd.     9,133,921  
  66,341     Principal Financial Group, Inc.     3,541,282  
  30,327     The Travelers Cos., Inc.     3,974,656  
  32,513     Willis Towers Watson PLC     6,076,680  
  153,184     Zurich Insurance Group AG ADR     6,006,345  
   

 

 

 
      28,732,884  

 

 

 
IT Services – 0.6%  
  28,503     Automatic Data Processing, Inc.     4,624,042  
  34,821     Fidelity National Information Services, Inc.     4,588,015  
   

 

 

 
      9,212,057  

 

 

 
Machinery – 0.8%  
  42,822     Deere & Co.     7,457,023  
  42,141     Stanley Black & Decker, Inc.     6,377,198  
   

 

 

 
      13,834,221  

 

 

 

 

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


GOLDMAN SACHS INCOME BUILDER FUND

 

 

 

Shares     Description  

Value

 
Common Stocks – (continued)  
Media – 0.8%  
  194,739     Bright Pattern Holding Co.   $ 253,160  
  299,823     Comcast Corp. Class A     13,438,067  
   

 

 

 
      13,691,227  

 

 

 
Metals & Mining – 0.5%  
  144,021     Rio Tinto PLC ADR     7,490,532  

 

 

 
Multi-Utilities – 0.8%  
  81,085     Ameren Corp.     6,300,305  
  58,668     Public Service Enterprise Group, Inc.     3,714,271  
  25,196     Sempra Energy     3,641,074  
   

 

 

 
      13,655,650  

 

 

 
Oil, Gas & Consumable Fuels – 3.8%  
  183,440     Antero Midstream Corp.     1,181,353  
  240,335     BP PLC ADR     9,111,100  
  157,019     Chevron Corp.     18,236,187  
  547,918     Energy Transfer LP     6,898,288  
  45,213     Marathon Petroleum Corp.     2,891,371  
  128,349     Plains All American Pipeline LP     2,326,967  
  277,277     Royal Dutch Shell PLC ADR Class A     16,073,748  
  315,649     The Williams Cos., Inc.     7,042,129  
   

 

 

 
      63,761,143  

 

 

 
Personal Products – 0.6%  
  174,232     Unilever NV     10,321,504  

 

 

 
Pharmaceuticals – 2.8%  
  142,581     AstraZeneca PLC ADR     6,990,746  
  96,846     Eli Lilly & Co.     11,035,602  
  149,090     Johnson & Johnson     19,685,844  
  103,870     Novartis AG ADR     9,082,393  
   

 

 

 
      46,794,585  

 

 

 
Road & Rail – 0.9%  
  30,370     Norfolk Southern Corp.     5,527,340  
  56,896     Union Pacific Corp.     9,414,012  
   

 

 

 
      14,941,352  

 

 

 
Semiconductors & Semiconductor Equipment – 0.9%  
  136,782     Intel Corp.     7,732,287  
  67,382     Texas Instruments, Inc.     7,950,402  
   

 

 

 
      15,682,689  

 

 

 
Software – 0.5%  
  62,290     Microsoft Corp.     8,930,517  

 

 

 
Specialty Retail – 1.2%  
  285,838     Industria de Diseno Textil SA ADR     4,467,648  
  64,261     The Home Depot, Inc.     15,074,345  
   

 

 

 
      19,541,993  

 

 

 
Technology Hardware, Storage & Peripherals – 0.5%  
  34,710     Apple, Inc.     8,634,460  

 

 

 
Common Stocks – (continued)  
Technology – Software/Services(b)(c) – 0.0%  
  194,739     Aspect Software, Inc. Class B   48,685  

 

 

 
Tobacco – 0.4%  
  82,671     Philip Morris International, Inc.     6,732,726  

 

 

 
Water Utilities – 0.5%  
  71,745     American Water Works Co., Inc.     8,844,005  

 

 

 
  TOTAL COMMON STOCKS  
  (Cost $506,776,409)   $ 599,670,324  

 

 

 

 

    
Shares
 

Dividend

Rate

    Value  
Preferred Stocks(d) – 0.6%  
Capital Markets(e) – 0.3%  

Morgan Stanley (3M USD LIBOR + 3.708%)

 

183,597     6.375   $ 5,168,256  

 

 
Diversified Telecommunication Services – 0.1%  

Qwest Corp.

 

43,276     6.500       1,103,105  

 

 
Insurance(e) – 0.2%  

Delphi Financial Group, Inc. (3M USD LIBOR + 3.190%)

 

143,849     5.348       3,344,489  

 

 
TOTAL PREFERRED STOCKS

 

(Cost $8,780,987)

 

  $ 9,615,850  

 

 

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – 46.8%  
Advertising(d)(f) – 0.0%  
 

Outfront Media Capital LLC/Outfront Media Capital Corp.

 
$ 360,000       5.000     08/15/27     $ 377,550  

 

 

 
Aerospace & Defense(d) – 0.7%  
 

Arconic, Inc.

 
  2,950,000       5.400       04/15/21       3,044,665  
 

Bombardier, Inc.(f)

 
  2,330,000       7.500       03/15/25       2,213,500  
 

TransDigm, Inc.

 
  2,750,000       6.000       07/15/22       2,797,025  
  365,000       6.500       05/15/25       379,144  
  3,300,000       5.500 (f)      11/15/27       3,287,625  
     

 

 

 
        11,721,959  

 

 

 
Agriculture – 0.6%  
 

BAT Capital Corp.(d)

 
  10,000,000       4.390       08/15/37       9,856,300  
 

MHP SE

 
  330,000       7.750       05/10/24       349,800  
     

 

 

 
        10,206,100  

 

 

 
Airlines(f) – 0.1%  
 

Air Canada Pass Through Trust Series 2013-1, Class B

 
  1,732,381       5.375       11/15/22       1,780,333  

 

 

 

 

The accompanying notes are an integral part of these financial statements.   21


GOLDMAN SACHS INCOME BUILDER FUND

 

Schedule of Investments (continued)

October 31, 2019

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – (continued)  
Automotive – 0.7%  
 

American Axle & Manufacturing, Inc.(d)

 
$ 1,950,000       6.250 %       04/01/25     $ 1,881,750  
 

Delphi Technologies PLC(f)

 
  4,100,000       5.000       10/01/25       3,556,750  
 

Ford Motor Credit Co. LLC

 
  2,500,000       5.875       08/02/21       2,621,250  
 

General Motors Co.(d)

 
  3,000,000       6.600       04/01/36       3,478,410  
     

 

 

 
        11,538,160  

 

 

 
Banks – 3.6%  
 

Akbank Turk A/S(d)(e) (5 year USD Swap + 5.026%)

 
  320,000       7.200       03/16/27       301,900  
 

Banco do Brasil SA(d)(e) (10 Year CMT + 4.398%)

 
  560,000       6.250       04/15/49       554,288  
 

Banco Mercantil del Norte SA(d)(e)(f) (5 Year CMT + 4.967%)

 
  680,000       6.750       09/27/49       690,200  
 

Bank of America Corp.(d)(e) (3M USD LIBOR + 3.898%)

 
  4,000,000       6.100       12/29/49       4,420,000  
 

BBVA Bancomer SA(d)(e) (5 Year CMT + 2.650%)

 
  530,000       5.125       01/18/33       514,391  
 

BNP Paribas SA(f)

 
  2,700,000       4.375       05/12/26       2,883,627  
 

CIT Group, Inc.(d)

 
  4,025,000       5.250       03/07/25       4,432,531  
 

Citigroup, Inc.(d)(e) (3M USD LIBOR + 4.517%)

 
  4,000,000       6.250       12/29/49       4,530,000  
 

Credit Suisse Group AG(d)(e)(f) (5 year USD Swap + 4.598%)

 
  4,025,000       7.500       12/29/49       4,397,312  
 

Deutsche Bank AG(d)(e) (5 year USD Swap + 2.248%)

 
  2,000,000       4.296       05/24/28       1,895,000  
 

FirstRand Bank Ltd.(d)(e) (5 year USD Swap + 3.561%)

 
  320,000       6.250       04/23/28       340,100  
 

ING Groep NV(d)(e)

 
 

(5 year USD Swap + 4.445%)

 
  4,275,000       6.000       12/29/49       4,301,719  
 

(5 year USD Swap + 4.446%)

 
  5,000,000       6.500       12/29/49       5,312,500  
 

Intesa Sanpaolo SpA(f)

 
  8,000,000       5.017       06/26/24       8,340,000  
 

Itau Unibanco Holding SA(d)(e) (5 Year CMT + 3.981%)

 
  500,000       6.125       12/12/49       514,141  
 

JPMorgan Chase & Co.(d)(e) (3M USD LIBOR + 3.330%)

 
  4,000,000       6.125       12/29/49       4,375,520  
 

Royal Bank of Scotland Group PLC

 
  2,675,000       3.875       09/12/23       2,793,208  
  2,975,000       6.000       12/19/23       3,298,079  
 

Turkiye Vakiflar Bankasi TAO

 
  200,000       6.000       11/01/22       193,000  
 

UBS Group Funding Switzerland AG(d)(e) (5 year USD Swap +
4.590%)

 
 
  6,000,000       6.875       12/29/49       6,553,620  
 

United Bank for Africa PLC

 
  470,000       7.750       06/08/22       497,613  
     

 

 

 
        61,138,749  

 

 

 
Corporate Obligations – (continued)  
Beverages – 0.8%  
 

Anadolu Efes Biracilik Ve Malt Sanayii A/S

 
350,000       3.375       11/01/22     346,390  
 

Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide,
Inc.(d)

 
 
  3,000,000       4.700       02/01/36       3,468,840  
 

Anheuser-Busch InBev Worldwide, Inc.(d)

 
  3,000,000       4.150       01/23/25       3,279,270  
 

Central American Bottling Corp.(d)

 
  480,000       5.750       01/31/27       504,900  
 

Constellation Brands, Inc.(d)

 
  2,700,000       3.700       12/06/26       2,890,604  
 

Keurig Dr Pepper, Inc.(d)

 
  2,000,000       4.057       05/25/23       2,121,120  
     

 

 

 
        12,611,124  

 

 

 
Building Materials(d) – 0.7%  
 

BMC East LLC(f)

 
  2,750,000       5.500       10/01/24       2,860,000  
 

Builders FirstSource, Inc.(f)

 
  3,482,000       5.625       09/01/24       3,625,632  
  1,675,000       6.750       06/01/27       1,809,000  
 

Cemex SAB de CV

 
  490,000       5.700       01/11/25       502,679  
  230,000       7.750       04/16/26       247,825  
 

Cornerstone Building Brands, Inc.(f)

 
  2,780,000       8.000       04/15/26       2,731,350  
     

 

 

 
        11,776,486  

 

 

 
Chemicals – 0.8%  
 

Ashland LLC(d)

 
  3,010,000       6.875       05/15/43       3,431,400  
 

Ingevity Corp.(d)(f)

 
  1,225,000       4.500       02/01/26       1,235,719  
 

OCI NV(d)(f)

 
  1,250,000       5.250       11/01/24       1,289,063  
 

PQ Corp.(d)(f)

 
  3,400,000       6.750       11/15/22       3,510,500  
 

Sasol Financing USA LLC(d)

 
  200,000       6.500       09/27/28       222,594  
 

Valvoline, Inc.(d)

 
  1,950,000       5.500       07/15/24       2,020,687  
 

WR Grace & Co-Conn(f)

 
  1,800,000       5.125       10/01/21       1,863,000  
     

 

 

 
        13,572,963  

 

 

 
Coal(d) – 0.0%  
 

Mongolian Mining Corp./Energy Resources LLC

 
  330,000       9.250       04/15/24       303,600  

 

 

 
Commercial Services – 1.7%  
 

Avis Budget Car Rental LLC/Avis Budget Finance, Inc.(d)(f)

 
  1,750,000       5.750       07/15/27       1,793,750  
 

GEMS MENASA Cayman Ltd./GEMS Education Delaware
LLC(d)(f)

 
 
  1,800,000       7.125       07/31/26       1,870,875  
 

Global Liman Isletmeleri(d)

 
  510,000       8.125       11/14/21       499,003  

 

 

 

 

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


GOLDMAN SACHS INCOME BUILDER FUND

 

 

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – (continued)  
Commercial Services – (continued)  
 

Herc Holdings, Inc.(d)(f)

 
$ 2,610,000       5.500 %       07/15/27     $ 2,720,925  
 

IHS Markit Ltd.(d)(f)

 
  5,675,000       4.750       02/15/25       6,242,727  
 

Nielsen Finance LLC/Nielsen Finance Co.(d)(f)

 
  5,450,000       5.000       04/15/22       5,470,437  
 

Prime Security Services Borrower LLC/Prime Finance, Inc.(f)

 
  3,550,000       5.250       04/15/24       3,616,563  
 

Refinitiv US Holdings, Inc.(d)(f)

 
  3,000,000       8.250       11/15/26       3,367,500  
 

The Hertz Corp.(d)(f)

 
  900,000       7.625       06/01/22       934,875  
 

United Rentals North America, Inc.(d)

 
  1,350,000       5.875       09/15/26       1,431,000  
     

 

 

 
        27,947,655  

 

 

 
Computers(d) – 0.9%  
 

Banff Merger Sub, Inc.(f)

 
  2,450,000       9.750       09/01/26       2,290,750  
 

Dell International LLC/EMC Corp.(f)

 
  5,000,000       8.100       07/15/36       6,427,900  
 

Hewlett Packard Enterprise Co.

 
  3,000,000       6.200       10/15/35       3,599,340  
 

Western Digital Corp.

 
  3,000,000       4.750       02/15/26       3,067,500  
     

 

 

 
        15,385,490  

 

 

 
Distribution & Wholesale(d)(f) – 0.3%  
 

Core & Main Holdings LP(g) (PIK 9.375%, Cash 8.625%)

 
  1,550,000       8.625       09/15/24       1,542,250  
 

IAA, Inc.

 
  750,000       5.500       06/15/27       802,500  
 

Performance Food Group, Inc.

 
  2,150,000       5.500       06/01/24       2,198,375  
  1,150,000       5.500       10/15/27       1,220,437  
     

 

 

 
        5,763,562  

 

 

 
Diversified Financial Services – 3.3%  
 

Air Lease Corp.(d)

 
  2,750,000       3.750       06/01/26       2,894,251  
 

Allied Universal Holdco LLC/Allied Universal Finance Corp.(d)(f)

 
  1,555,000       6.625       07/15/26       1,656,075  
  1,620,000       9.750       07/15/27       1,709,100  
 

Ally Financial, Inc.

 
  4,000,000       8.000       11/01/31       5,560,000  
 

Avolon Holdings Funding Ltd.(d)(f)

 
  3,450,000       5.250       05/15/24       3,756,360  
 

CoBank ACB(d)(e) (3M USD LIBOR + 4.660%)

 
  5,350,000       6.250       12/29/49       5,739,159  
 

Curo Group Holdings Corp.(d)(f)

 
  2,125,000       8.250       09/01/25       1,854,063  
 

Global Aircraft Leasing Co. Ltd.(d)(f)(g) (PIK 7.250%, Cash
6.500%)

 
 
  1,750,000       6.500       09/15/24       1,787,188  
 

Icahn Enterprises LP/Icahn Enterprises Finance Corp.(d)

 
  4,000,000       6.250       02/01/22       4,095,000  

 

 

 
Corporate Obligations – (continued)  
Diversified Financial Services – (continued)  
 

Nationstar Mortgage Holdings, Inc.(d)(f)

 
3,050,000       8.125       07/15/23     3,229,187  
 

Nationstar Mortgage LLC/Nationstar Capital Corp.(d)

 
  2,223,000       6.500       07/01/21       2,231,336  
 

Navient Corp.

 
  5,000,000       5.875       03/25/21       5,187,500  
  3,000,000       5.500       01/25/23       3,120,000  
 

Oilflow SPV 1 DAC

 
  630,000       12.000       01/13/22       652,995  
 

Park Aerospace Holdings Ltd.(d)(f)

 
  2,235,000       5.250       08/15/22       2,382,215  
 

Quicken Loans, Inc.(d)(f)

 
  2,000,000       5.750       05/01/25       2,060,720  
 

Springleaf Finance Corp.

 
  2,600,000       6.125       05/15/22       2,795,000  
  3,500,000       7.125       03/15/26       3,994,375  
  75,000       6.625 (d)      01/15/28       82,969  
 

Unifin Financiera SAB de CV(d)

 
  350,000       7.375       02/12/26       350,700  
     

 

 

 
        55,138,193  

 

 

 
Electrical – 0.8%  
 

Calpine Corp.(d)(f)

 
  2,000,000       6.000       01/15/22       2,000,000  
  3,000,000       5.875       01/15/24       3,056,250  
 

Electricite de France SA(d)(e)(f) (10 year USD Swap + 3.709%)

 
  2,500,000       5.250       01/29/49       2,565,625  
 

Eskom Holdings SOC Ltd.

 
  200,000       5.750       01/26/21       201,625  
  630,000       6.350 (h)      08/10/28       667,997  
 

Listrindo Capital B.V.(d)

 
  520,000       4.950       09/14/26       530,075  
 

LLPL Capital Pte Ltd.

 
  454,572       6.875       02/04/39       530,736  
 

Minejesa Capital B.V.

 
  260,000       4.625       08/10/30       267,475  
 

NRG Energy, Inc.(d)

 
  2,800,000       3.750 (f)      06/15/24       2,903,737  
  140,000       7.250       05/15/26       153,300  
     

 

 

 
        12,876,820  

 

 

 
Electronics – 0.1%  
 

The ADT Security Corp.

 
  1,850,000       4.125       06/15/23       1,884,688  

 

 

 
Energy-Alternate Sources(d) – 0.1%  
 

Greenko Dutch B.V.

 
  690,000       5.250       07/24/24       696,469  
 

Neerg Energy Ltd.

 
  340,000       6.000       02/13/22       336,175  
     

 

 

 
        1,032,644  

 

 

 
Engineering & Construction – 0.1%  
 

Aeropuertos Dominicanos Siglo XXI SA(d)

 
  630,000       6.750       03/30/29       670,950  
 

GMR Hyderabad International Airport Ltd.

 
  660,000       5.375       04/10/24       682,275  

 

 

 

 

The accompanying notes are an integral part of these financial statements.   23


GOLDMAN SACHS INCOME BUILDER FUND

 

Schedule of Investments (continued)

October 31, 2019

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – (continued)  
Engineering & Construction – (continued)  
 

IHS Netherlands Holdco B.V.(d)(f)

 
$ 200,000       7.125 %       03/18/25     $ 206,180  
     

 

 

 
        1,559,405  

 

 

 
Entertainment(d)(f) – 0.3%  
 

Motion Bondco DAC

 
  3,250,000       6.625       11/15/27       3,310,937  
 

Scientific Games International, Inc.

 
  1,000,000       5.000       10/15/25       1,027,500  
  1,350,000       8.250       03/15/26       1,427,625  
     

 

 

 
        5,766,062  

 

 

 
Environmental(d)(f) – 0.2%  
 

GFL Environmental, Inc.

 
  1,430,000       8.500       05/01/27       1,573,000  
 

Stericycle, Inc.

 
  1,950,000       5.375       07/15/24       2,031,725  
     

 

 

 
        3,604,725  

 

 

 
Exploration and Production(d) – 0.0%  
 

Compania General Combust

 
  590,000       9.500       11/07/21       454,300  

 

 

 
Food & Drug Retailing(d) – 0.8%  
 

Albertsons Cos., Inc./Safeway, Inc./New Albertsons
LP/Albertsons LLC(f)

 
 
  1,995,000       5.875       02/15/28       2,142,131  
 

Arcor SAIC

 
  110,000       6.000       07/06/23       98,416  
 

B&G Foods, Inc.

 
  4,020,000       5.250       04/01/25       4,105,425  
 

Post Holdings, Inc.(f)

 
  6,000,000       5.500       03/01/25       6,277,500  
     

 

 

 
        12,623,472  

 

 

 
Forest Products & Paper(d)(f) – 0.1%  
 

Mercer International, Inc.

 
  1,850,000       7.375       01/15/25       1,910,125  

 

 

 
Gas(d) – 0.3%  
 

AmeriGas Partners LP/AmeriGas Finance Corp.

 
  4,125,000       5.875       08/20/26       4,568,438  

 

 

 
Health Care Products(d) – 0.4%  
 

Becton Dickinson & Co.

 
  2,000,000       2.894       06/06/22       2,038,640  
  3,375,000       3.363       06/06/24       3,536,966  
 

Hill-Rom Holdings, Inc.(f)

 
  400,000       4.375       09/15/27       411,000  
     

 

 

 
        5,986,606  

 

 

 
Healthcare Providers & Services – 2.3%  
 

Acadia Healthcare Co., Inc.(d)

 
  2,100,000       6.500       03/01/24       2,178,750  
 

Charles River Laboratories International, Inc.(d)(f)

 
  650,000       4.250       05/01/28       660,563  
 

CHS/Community Health Systems, Inc.(d)

 
  3,000,000       6.250       03/31/23       2,925,000  

 

 

 
Corporate Obligations – (continued)  
Healthcare Providers & Services – (continued)  
 

Encompass Health Corp.(d)

 
1,200,000       4.500       02/01/28     1,224,000  
 

HCA, Inc.

 
  3,000,000       4.750       05/01/23       3,212,160  
  12,000,000       5.000       03/15/24       13,080,000  
  250,000       5.875 (d)      02/15/26       280,625  
 

MEDNAX, Inc.(d)(f)

 
  3,650,000       5.250       12/01/23       3,706,611  
 

Tenet Healthcare Corp.

 
  5,600,000       8.125       04/01/22       6,062,000  
  2,000,000       6.250 (d)(f)      02/01/27       2,115,000  
 

Universal Health Services, Inc.(d)(f)

 
  2,650,000       5.000       06/01/26       2,778,710  
     

 

 

 
        38,223,419  

 

 

 
Holding Companies-Diversified(d) – 0.0%  
 

KOC Holding A/S

 
  700,000       6.500       03/11/25       729,313  

 

 

 
Home Builders – 0.5%  
 

Installed Building Products, Inc.(d)(f)

 
  800,000       5.750       02/01/28       840,000  
 

Lennar Corp.(d)

 
  1,825,000       4.125       01/15/22       1,868,344  
 

PulteGroup, Inc.

 
  3,000,000       7.875       06/15/32       3,810,000  
 

Williams Scotsman International, Inc.(d)(f)

 
  1,350,000       6.875       08/15/23       1,417,500  
     

 

 

 
        7,935,844  

 

 

 
Household Products(d) – 0.0%  
 

Spectrum Brands, Inc.

 
  700,000       5.750       07/15/25       729,750  

 

 

 
Housewares(d) – 0.0%  
 

Turkiye Sise ve Cam Fabrikalari A/S

 
  530,000       6.950       03/14/26       550,869  

 

 

 
Insurance – 0.4%  
 

Fidelity & Guaranty Life Holdings, Inc.(d)(f)

 
  2,850,000       5.500       05/01/25       3,049,500  
 

Fortune Star BVI Ltd.(d)

 
  340,000       5.250       03/23/22       338,725  
 

HUB International Ltd.(d)(f)

 
  1,760,000       7.000       05/01/26       1,810,600  
 

Transatlantic Holdings, Inc.

 
  75,000       8.000       11/30/39       111,455  
 

USI, Inc.(d)(f)

 
  1,850,000       6.875       05/01/25       1,882,375  
     

 

 

 
        7,192,655  

 

 

 
Internet – 1.2%  
 

21Vianet Group, Inc.

 
  400,000       7.875       10/15/21       405,007  
 

Getty Images, Inc.(d)(f)

 
  250,000       9.750       03/01/27       250,625  
 

Go Daddy Operating Co. LLC/GD Finance Co., Inc.(d)(f)

 
  1,305,000       5.250       12/01/27       1,383,300  

 

 

 

 

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


GOLDMAN SACHS INCOME BUILDER FUND

 

 

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – (continued)  
Internet – (continued)  
 

GrubHub Holdings, Inc.(d)(f)

 
$ 1,650,000       5.500 %       07/01/27     $ 1,546,875  
 

Netflix, Inc.

 
  5,600,000       5.875       02/15/25       6,181,000  
 

Symantec Corp.(d)(f)

 
  4,000,000       5.000       04/15/25       4,100,000  
 

Uber Technologies, Inc.(d)(f)

 
  2,100,000       7.500       11/01/23       2,136,750  
 

VeriSign, Inc.(d)

 
  4,000,000       5.250       04/01/25       4,370,000  
     

 

 

 
        20,373,557  

 

 

 
Iron/Steel – 0.2%  
 

ABJA Investment Co. Pte Ltd.

 
  650,000       5.950       07/31/24       681,891  
 

Cleveland-Cliffs, Inc.(d)

 
  1,038,000       5.750       03/01/25       1,025,025  
  2,250,000       5.875 (f)      06/01/27       2,137,500  
 

Vale Overseas Ltd.

 
  300,000       6.250       08/10/26       349,740  
     

 

 

 
        4,194,156  

 

 

 
Lodging – 0.5%  
 

MGM Resorts International

 
  8,000,000       6.750       10/01/20       8,290,000  

 

 

 
Media – 5.2%  
 

Altice Financing SA(d)

 
  6,000,000       6.625 (f)      02/15/23       6,165,000  
  200,000       7.500       05/15/26       212,250  
 

Altice Finco SA(d)(f)

 
  2,000,000       8.125       01/15/24       2,062,500  
 

AMC Networks, Inc.(d)

 
  1,800,000       4.750       08/01/25       1,818,000  
 

CCO Holdings LLC/CCO Holdings Capital Corp.(d)(f)

 
  3,000,000       5.875       05/01/27       3,180,000  
 

Charter Communications Operating LLC/Charter
Communications Operating Capital(d)

 
 
  12,000,000       6.384       10/23/35       14,738,160  
 

Clear Channel Worldwide Holdings, Inc.(d)(f)

 
  383,000       9.250       02/15/24       421,300  
 

CSC Holdings LLC

 
  985,000       5.250       06/01/24       1,061,338  
  5,450,000       5.500 (d)(f)      05/15/26       5,749,750  
 

Cumulus Media New Holdings, Inc.(d)(f)

 
  2,680,000       6.750       07/01/26       2,840,800  
 

Diamond Sports Group LLC/Diamond Sports Finance Co.(d)(f)

 
  1,590,000       5.375       08/15/26       1,661,550  
  3,345,000       6.625       08/15/27       3,449,531  
 

DISH DBS Corp.

 
  6,300,000       5.875       07/15/22       6,583,500  
 

Entercom Media Corp.(d)(f)

 
  2,300,000       7.250       11/01/24       2,397,750  
  3,050,000       6.500       05/01/27       3,194,875  
 

Gray Television, Inc.(d)(f)

 
  2,125,000       7.000       05/15/27       2,324,219  

 

 

 
Corporate Obligations – (continued)  
Media – (continued)  
 

iHeartCommunications, Inc.(d)(f)

 
1,450,000       5.250       08/15/27     1,497,125  
 

Meredith Corp.(d)

 
  10,000       6.875       02/01/26       10,325  
 

Nexstar Broadcasting, Inc.(d)(f)

 
  1,500,000       5.625       07/15/27       1,578,750  
 

Scripps Escrow, Inc.(d)(f)

 
  1,050,000       5.875       07/15/27       1,076,250  
 

Sirius XM Radio, Inc.(d)(f)

 
  1,085,000       4.625       07/15/24       1,131,112  
 

The E.W. Scripps Co.(d)(f)

 
  1,875,000       5.125       05/15/25       1,903,125  
 

UPCB Finance IV Ltd.(d)(f)

 
  8,000,000       5.375       01/15/25       8,250,000  
 

Videotron Ltd.(d)(f)

 
  5,125,000       5.375       06/15/24       5,560,625  
 

Virgin Media Secured Finance PLC(d)

 
GBP  4,000,000       4.875       01/15/27       5,361,092  
 

Ziggo Bond Co. B.V.(d)(f)

 
$ 3,000,000       5.875       01/15/25       3,082,500  
     

 

 

 
        87,311,427  

 

 

 
Mining – 1.3%  
 

Constellium SE(d)(f)

 
  2,100,000       5.875       02/15/26       2,194,500  
 

First Quantum Minerals Ltd.(d)(f)

 
  4,000,000       7.250       04/01/23       4,021,360  
 

FMG Resources August 2006 Pty Ltd.(d)(f)

 
  4,675,000       4.750       05/15/22       4,821,094  
 

Freeport-McMoRan, Inc.(d)

 
  2,950,000       3.875       03/15/23       2,994,250  
  2,000,000       5.400       11/14/34       1,952,500  
 

Glencore Finance Canada Ltd.(f)

 
  3,000,000       5.550       10/25/42       3,240,570  
 

Novelis Corp.(d)(f)

 
  2,100,000       5.875       09/30/26       2,210,250  
 

Vedanta Resources Finance II PLC(d)(f)

 
  200,000       9.250       04/23/26       199,250  
     

 

 

 
        21,633,774  

 

 

 
Oil Field Services – 1.6%  
 

Antero Resources Corp.(d)

 
  6,500,000       5.125       12/01/22       4,875,000  
 

Chesapeake Energy Corp.

 
  525,000       8.000 (d)      01/15/25       346,500  
  2,000,000       5.500       09/15/26       1,120,318  
 

DNO ASA(d)(f)

 
  500,000       8.375       05/29/24       496,900  
 

Ensign Drilling, Inc.(d)(f)

 
  1,400,000       9.250       04/15/24       1,211,000  
 

Geopark Ltd.(d)

 
  330,000       6.500       09/21/24       340,003  
 

Gulfport Energy Corp.(d)

 
  3,200,000       6.375       01/15/26       1,920,000  
 

Kosmos Energy Ltd.(d)

 
  500,000       7.125       04/04/26       521,406  

 

 

 

 

The accompanying notes are an integral part of these financial statements.   25


GOLDMAN SACHS INCOME BUILDER FUND

 

Schedule of Investments (continued)

October 31, 2019

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – (continued)  
Oil Field Services – (continued)  
 

Laredo Petroleum, Inc.(d)

 
$ 2,300,000       5.625 %       01/15/22     $ 2,185,000  
 

Matador Resources Co.(d)

 
  3,000,000       5.875       09/15/26       2,880,000  
 

MEG Energy Corp.(d)(f)

 
  1,425,000       6.375       01/30/23       1,357,312  
 

Nexen, Inc.

 
  5,000       6.400       05/15/37       6,995  
  50,000       7.500       07/30/39       79,547  
 

Nine Energy Service, Inc.(d)(f)

 
  1,450,000       8.750       11/01/23       1,094,750  
 

Noble Holding International Ltd.(d)

 
  840,000       7.750       01/15/24       520,800  
  1,975,000       7.875 (f)      02/01/26       1,352,875  
 

Petrobras Global Finance B.V.(i)

 
  500,000       6.850       06/05/15       573,400  
 

Petroleos Mexicanos

 
EUR  220,000       2.500       08/21/21       251,500  
$ 80,000       6.490 (d)(f)      01/23/27       85,240  
 

Range Resources Corp.(d)

 
  2,250,000       5.875       07/01/22       2,137,500  
 

Sunoco LP/Sunoco Finance Corp.(d)

 
  545,000       5.500       02/15/26       565,438  
 

Tecpetrol SA(d)

 
  770,000       4.875       12/12/22       710,205  
 

Tullow Oil PLC(d)

 
  330,000       7.000       03/01/25       339,075  
 

USA Compression Partners LP/USA Compression Finance
Corp.(d)

 
 
  1,300,000       6.875       04/01/26       1,304,875  
 

Whiting Petroleum Corp.

 
  427,000       1.250       04/01/20       419,704  
     

 

 

 
        26,695,343  

 

 

 
Packaging(f) – 1.4%  
 

Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc.(d)

 
  6,000,000       6.000       02/15/25       6,292,500  
  650,000       5.250       08/15/27       663,000  
 

Berry Global, Inc.(d)

 
  2,200,000       4.500       02/15/26       2,211,000  
  2,000,000       5.625       07/15/27       2,120,000  
 

LABL Escrow Issuer LLC(d)

 
  1,750,000       6.750       07/15/26       1,815,625  
 

Mauser Packaging Solutions Holding Co.(d)

 
  2,150,000       5.500       04/15/24       2,211,812  
  965,000       7.250       04/15/25       920,369  
 

Owens-Brockway Glass Container, Inc.

 
  1,750,000       5.875       08/15/23       1,846,250  
 

Reynolds Group Issuer, Inc./Reynolds Group Issuer
LLC/Reynolds Group Issuer Lu(d)

 
 
  190,000       7.000       07/15/24       196,650  
 

Sealed Air Corp.(d)

 
  2,000,000       5.250       04/01/23       2,135,000  
 

Trivium Packaging Finance B.V.(d)

 
  1,075,000       5.500       08/15/26       1,124,719  
  1,300,000       8.500       08/15/27       1,382,875  
     

 

 

 
        22,919,800  

 

 

 
Corporate Obligations – (continued)  
Pharmaceuticals(d) – 0.9%  
 

Bausch Health Cos., Inc.(f)

 
453,000       5.875       05/15/23     459,229  
  4,000,000       9.000       12/15/25       4,500,000  
 

CVS Health Corp.

 
  2,775,000       3.700       03/09/23       2,890,631  
 

HLF Financing S.a.r.l. LLC/Herbalife International, Inc.(f)

 
  2,745,000       7.250       08/15/26       2,868,525  
 

Mylan NV

 
  3,000,000       3.950       06/15/26       3,114,990  
 

Vizient, Inc.(f)

 
  580,000       6.250       05/15/27       626,400  
     

 

 

 
        14,459,775  

 

 

 
Pipelines – 3.0%  
 

Buckeye Partners LP(d)

 
  1,025,000       4.350       10/15/24       1,027,634  
  2,331,000       3.950       12/01/26       2,157,364  
  929,000       4.125       12/01/27       856,566  
 

Cheniere Energy Partners LP(d)(f)

 
  1,800,000       4.500       10/01/29       1,836,000  
 

DCP Midstream Operating LP(f)

 
  4,000,000       6.750       09/15/37       4,140,000  
 

Energy Transfer Operating LP

 
  4,000,000       4.250 (d)      03/15/23       4,205,568  
  2,985,000       6.625       10/15/36       3,603,761  
 

Enterprise Products Operating LLC(d)(e) (3M USD LIBOR +
2.778%)

 
 
  1,000,000       4.909       06/01/67       923,730  
 

Genesis Energy LP/Genesis Energy Finance Corp.(d)

 
  3,500,000       6.000       05/15/23       3,403,750  
 

Kinder Morgan Energy Partners LP

 
  7,000,000       7.300       08/15/33       9,312,660  
 

NGPL PipeCo LLC(d)(f)

 
  1,315,000       4.375       08/15/22       1,361,025  
 

Plains All American Pipeline LP/PAA Finance Corp.(d)

 
  3,000,000       3.600       11/01/24       3,072,360  
 

Targa Resources Partners LP/Targa Resources Partners Finance
Corp.(d)

 
 
  5,000,000       5.125       02/01/25       5,125,000  
 

The Williams Cos., Inc.

 
  7,000,000       7.500       01/15/31       9,038,029  
     

 

 

 
        50,063,447  

 

 

 
Real Estate Investment Trust – 3.2%  
 

American Tower Corp.

 
  2,250,000       5.000       02/15/24       2,492,302  
 

Brookfield Property REIT, Inc./BPR Cumulus LLC/BPR Nimbus
LLC/GGSI Sellco LL(d)(f)

 
 
  600,000       5.750       05/15/26       624,265  
 

Country Garden Holdings Co. Ltd.(d)

 
  650,000       6.500       04/08/24       690,625  
 

Crown Castle International Corp.

 
  2,250,000       5.250       01/15/23       2,453,996  
 

Equinix, Inc.(d)

 
  3,000,000       5.375       04/01/23       3,063,750  
  8,000,000       5.750       01/01/25       8,270,000  

 

 

 

 

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


GOLDMAN SACHS INCOME BUILDER FUND

 

 

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – (continued)  
Real Estate Investment Trust – (continued)  
 

Growthpoint Properties International Pty Ltd.

 
$ 470,000       5.872 %       05/02/23     $ 503,135  
 

IRSA Propiedades Comerciales SA(d)

 
  540,000       8.750       03/23/23       434,025  
 

Kaisa Group Holdings Ltd.

 
  320,000       11.750       02/26/21       332,700  
 

Ladder Capital Finance Holdings LLLP/Ladder Capital Finance
Corp.(d)(f)

 
 
  2,500,000       5.875       08/01/21       2,534,375  
  4,000,000       5.250       03/15/22       4,140,000  
 

MPT Operating Partnership LP/MPT Finance Corp.(d)

 
  4,000,000       6.375       03/01/24       4,194,200  
  3,000,000       5.000       10/15/27       3,172,500  
 

NE Property B.V.(d)

 
EUR  470,000       1.750       11/23/24       529,816  
 

Realogy Group LLC/Realogy Co-Issuer Corp.(d)(f)

 
$ 350,000       4.875       06/01/23       340,375  
  1,950,000       9.375       04/01/27       1,915,875  
 

SBA Communications Corp.(d)

 
  15,016,000       4.875       07/15/22       15,203,700  
 

Scenery Journey Ltd.(d)

 
  310,000       13.000       11/06/22       311,712  
 

Starwood Property Trust, Inc.(d)

 
  2,700,000       4.750       03/15/25       2,797,875  
 

Theta Capital Pte Ltd.(d)

 
  340,000       7.000       04/11/22       340,850  
     

 

 

 
        54,346,076  

 

 

 
Retailing – 1.1%  
 

1011778 BC ULC/New Red Finance, Inc.(d)(f)

 
  3,000,000       5.000       10/15/25       3,097,500  
 

eG Global Finance PLC(d)(f)

 
  3,800,000       6.750       02/07/25       3,795,250  
 

Eurotorg LLC Via Bonitron DAC

 
  410,000       8.750       10/30/22       441,262  
 

IRB Holding Corp.(d)(f)

 
  2,710,000       6.750       02/15/26       2,757,425  
 

L Brands, Inc.

 
  3,000,000       6.875       11/01/35       2,535,000  
 

PetSmart, Inc.(d)(f)

 
  2,800,000       5.875       06/01/25       2,758,000  
 

Staples, Inc.(d)(f)

 
  2,150,000       7.500       04/15/26       2,241,375  
 

Suburban Propane Partners LP/Suburban Energy Finance Corp.(d)

 
  550,000       5.500       06/01/24       562,375  
     

 

 

 
        18,188,187  

 

 

 
Semiconductors – 0.7%  
 

Amkor Technology, Inc.(d)(f)

 
  850,000       6.625       09/15/27       930,750  
 

Broadcom Corp./Broadcom Cayman Finance Ltd.

 
  2,000,000       2.375       01/15/20       2,000,720  
 

Broadcom, Inc.(d)(f)

 
  4,000,000       3.625       10/15/24       4,108,880  
 

Microchip Technology, Inc.

 
  2,000,000       3.922       06/01/21       2,046,960  

 

 

 
Corporate Obligations – (continued)  
Semiconductors – (continued)  
 

NXP B.V./NXP Funding LLC(f)

 
3,000,000       4.125       06/01/21     3,084,030  
     

 

 

 
        12,171,340  

 

 

 
Software(d) – 0.6%  
 

Camelot Finance SA(f)

 
  2,250,000       4.500       11/01/26       2,272,500  
 

Fiserv, Inc.

 
  2,775,000       3.200       07/01/26       2,899,442  
 

Nuance Communications, Inc.

 
  3,000,000       5.625       12/15/26       3,187,500  
 

SS&C Technologies, Inc.(f)

 
  850,000       5.500       09/30/27       906,313  
     

 

 

 
        9,265,755  

 

 

 
Telecommunication Services – 5.1%  
 

Altice France SA(d)(f)

 
  5,000,000       7.375       05/01/26       5,356,250  
 

AT&T, Inc.(d)

 
  3,000,000       5.250       03/01/37       3,536,070  
 

CenturyLink, Inc.

 
  5,000,000       6.450       06/15/21       5,262,500  
 

CommScope, Inc.(d)(f)

 
  2,000,000       5.500       06/15/24       1,892,500  
  1,100,000       6.000       03/01/26       1,128,875  
  250,000       8.250       03/01/27       236,250  
 

Connect Finco S.A.R.L./Connect US Finco LLC(d)(f)

 
  3,500,000       6.750       10/01/26       3,661,875  
 

Digicel Group One Ltd.(d)(f)

 
  1,955,000       8.250       12/30/22       1,145,508  
 

Digicel Group Two Ltd.(d)(f)

 
  1,845,000       8.250       09/30/22       461,250  
 

Frontier Communications Corp.(d)

 
  6,000,000       11.000       09/15/25       2,820,000  
  1,250,000       8.500 (f)      04/01/26       1,250,000  
 

Intelsat Jackson Holdings SA(d)(f)

 
  4,800,000       8.000       02/15/24       4,944,000  
  3,000,000       8.500       10/15/24       3,026,250  
 

MTN Mauritius Investments Ltd.

 
  620,000       6.500       10/13/26       684,519  
 

Nokia of America Corp.

 
  3,000,000       6.450       03/15/29       3,105,000  
 

Qwest Corp.

 
  4,780,000       6.750       12/01/21       5,154,503  
 

SoftBank Group Corp.(d)

 
  3,550,000       4.750       09/19/24       3,598,812  
  1,575,000       6.125       04/20/25       1,675,391  
 

Sprint Corp.

 
  10,039,000       7.875       09/15/23       11,093,095  
 

T-Mobile USA, Inc.(d)

 
  3,000,000       4.000       04/15/22       3,078,750  
  6,000,000       6.500       01/15/26       6,442,500  
 

Telecom Argentina SA(d)

 
  340,000       6.500       06/15/21       320,875  
  310,000       8.000 (f)      07/18/26       277,353  
 

Telecom Italia Capital SA

 
  4,000,000       7.721       06/04/38       4,875,000  

 

 

 

 

The accompanying notes are an integral part of these financial statements.   27


GOLDMAN SACHS INCOME BUILDER FUND

 

Schedule of Investments (continued)

October 31, 2019

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Corporate Obligations – (continued)  
Telecommunication Services – (continued)  
 

Telecom Italia SpA(f)

 
$ 5,000,000       5.303 %       05/30/24     $ 5,386,575  
 

Telesat Canada/Telesat LLC(d)(f)

 
  575,000       6.500       10/15/27       598,967  
 

Verizon Communications, Inc.

 
  3,000,000       5.250       03/16/37       3,764,610  
     

 

 

 
        84,777,278  

 

 

 
Toys/Games/Hobbies(d) – 0.1%  
 

Mattel, Inc.

 
  2,475,000       3.150       03/15/23       2,360,531  

 

 

 
Transportation – 0.1%  
 

Mexico City Airport Trust(d)

 
  520,000       5.500       10/31/46       522,438  
 

MV24 Capital B.V.(f)

 
  340,000       6.748       06/01/34       355,300  
 

Rumo Luxembourg S.a.r.l.(d)

 
  240,000       5.875       01/18/25       254,850  
     

 

 

 
        1,132,588  

 

 

 
  TOTAL CORPORATE OBLIGATIONS  
  (Cost $761,026,792)     $ 785,074,093  

 

 

 
Mortgage-Backed Obligations(e) – 0.0%  
Collateralized Mortgage Obligations – 0.0%  
Sequential Floating Rate – 0.0%  
 

JPMorgan Alternative Loan Trust Series 2005-A2, Class 1A1
(1M LIBOR + 0.520%)

 
 
$ 49,889       2.343     01/25/36     $ 49,568  
 

Merrill Lynch Alternative Note Asset Trust Series 2007-OAR3,
Class A1 (1M LIBOR + 0.190%)

 
 
  239,323       2.208       07/25/47       224,568  

 

 

 
  TOTAL MORTGAGE-BACKED OBLIGATIONS  
  (Cost $128,471)     $ 274,136  

 

 

 
     
Foreign Debt Obligations – 0.3%  
Sovereign – 0.3%  
 

Ecuador Government International Bond

 
$ 290,000       10.750     03/28/22       308,578  
  330,000       7.950       06/20/24       319,172  
 

Republic of Angola

 
  300,000       9.500       11/12/25       337,875  
 

Republic of Egypt

 
EUR  590,000       4.750       04/11/25       680,235  
 

Republic of Ghana

 
$ 630,000       7.875       08/07/23       687,291  
 

Republic of Nigeria

 
  690,000       6.500       11/28/27       691,509  
 

Republic of Sri Lanka(f)

 
  630,000       6.350       06/28/24       637,875  
 

Republic of Turkey

 
  760,000       6.125       10/24/28       750,263  

 

 

 
Foreign Debt Obligations – (continued)  
Sovereign – (continued)  
 

Ukraine Government Bond

 
680,000       7.750       09/01/23     727,600  

 

 

 
  TOTAL FOREIGN DEBT OBLIGATIONS  
  (Cost $4,919,612)       $ 5,140,398  

 

 

 
     
Bank Loans(e)(j) – 7.1%  
Aerospace – 0.3%  
 

TransDigm, Inc. (1M LIBOR + 2.500%)

 
$ 4,283,062       4.286     06/09/23     $ 4,261,090  

 

 

 
Automotive – 0.3%  
 

Adient US LLC (3M LIBOR + 4.250%)

 
  4,365,138       6.889       05/06/24       4,251,906  

 

 

 
Chemicals – 0.3%  
 

Momentive Performance Materials, Inc. (1M LIBOR + 3.250%)

 
  2,144,625       5.040       05/15/24       2,103,083  
 

Starfruit Finco B.V. (1M LIBOR + 3.250%)

 
  2,908,963       5.190       10/01/25       2,833,243  
     

 

 

 
        4,936,326  

 

 

 
Entertainment – 0.2%  
 

AMC Entertainment Holdings, Inc. (6M LIBOR + 3.000%)

 
  2,835,750       5.230       04/22/26       2,832,999  

 

 

 
Environmental – 0.1%  
 

Advanced Disposal Services, Inc. (1 Week LIBOR + 2.250%)

 
  1,978,437       4.086       11/10/23       1,980,890  

 

 

 
Food & Drug Retailers – 0.0%  
 

B&G Foods, Inc. (3M LIBOR + 2.500%)

 
  750,000       4.475       10/10/26       752,347  

 

 

 
Health Care – Services – 0.4%  
 

MPH Acquisition Holdings LLC (3M LIBOR + 2.750%)

 
  1,928,826       4.854       06/07/23       1,804,551  
 

Sotera Health Holdings LLC (3M LIBOR + 3.000%)

 
  1,984,733       4.927       05/15/22       1,947,519  
 

U.S. Renal Care, Inc. (1M LIBOR + 5.000%)

 
  2,200,000       6.786       06/26/26       2,028,312  
 

Verscend Holding Corp. (1M LIBOR + 4.500%)

 
  1,386,000       6.286       08/27/25       1,386,000  
     

 

 

 
        7,166,382  

 

 

 
Home Construction – 0.1%  
 

Brookfield Residential Properties, Inc. (1M LIBOR + 2.250%)

 
  2,037,890       4.036       08/28/23       2,006,058  

 

 

 
Media – Broadcasting & Radio – 0.2%  
 

Cumulus Media New Holdings, Inc. (1M LIBOR + 3.750%)

 
  925,000       5.536       03/31/26       928,663  
 

Getty Images, Inc. (1M LIBOR + 4.500%)

 
  1,985,000       6.313       02/19/26       1,930,412  
     

 

 

 
        2,859,075  

 

 

 

 

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


GOLDMAN SACHS INCOME BUILDER FUND

 

 

 

Principal
Amount
    Interest
Rate
    Maturity
Date
    Value  
Bank Loans(e)(j) – (continued)  
Media – Cable – 0.3%  
 

CSC Holdings LLC

 
 

(1M LIBOR + 2.250%)

 
$ 1,711,582       4.171 %       07/17/25     $ 1,701,364  
 

(2M LIBOR + 2.500%)

 
  3,801,875       4.327       04/15/27       3,795,070  
     

 

 

 
        5,496,434  

 

 

 
Metals & Mining – 0.2%  
 

Aleris International, Inc. (1M LIBOR + 4.750%)

 
  3,950,000       6.536       02/27/23       3,947,551  

 

 

 
Packaging – 0.2%  
 

Reynolds Group Holdings, Inc. (1M LIBOR + 2.750%)

 
  2,969,465       4.536       02/05/23       2,967,832  

 

 

 
Pharmaceuticals – 0.7%  
 

Alphabet Holding Co., Inc. (1M LIBOR + 7.750%)

 
  5,000,000       9.536       09/26/25       4,256,250  
 

Valeant Pharmaceuticals International, Inc. (1M LIBOR +
3.000%)

 
 
  7,437,650       4.921       06/02/25       7,461,674  
     

 

 

 
        11,717,924  

 

 

 
Restaurants – 0.0%  
 

1011778 B.C. Unlimited Liability Co. (1M LIBOR + 2.250%)

 
  477,583       4.036       02/16/24       477,941  

 

 

 
Retailers – 0.2%  
 

OEConnection LLC (3M LIBOR + 4.250%)

 
  2,078,030       5.823       09/25/26       2,057,250  
 

Staples, Inc. (3M LIBOR + 5.000%)

 
  1,596,000       7.123       04/16/26       1,571,597  
     

 

 

 
        3,628,847  

 

 

 
Services Cyclical – Business Services – 0.3%  
 

EVO Payments International LLC (1M LIBOR + 3.250%)

 
  2,969,849       5.050       12/22/23       2,971,097  
 

Travelport Finance S.a.r.l. (3M LIBOR + 5.000%)

 
  3,100,000       7.104       05/29/26       2,883,000  
     

 

 

 
        5,854,097  

 

 

 
Services Cyclical – Consumer Services – 0.2%  
 

Asurion LLC (1M LIBOR + 3.000%)

 
  3,367,809       4.786       08/04/22       3,368,415  

 

 

 
Technology – Software/Services – 2.4%  
 

Ancestry.com Operations, Inc. (1M LIBOR + 3.750%)

 
  5,141,335       5.540       10/19/23       4,704,322  
 

BMC Software Finance, Inc. (1M LIBOR + 4.250%)

 
  4,974,216       6.036       10/02/25       4,595,827  
 

Cerence, Inc. (3M LIBOR + 3.750%)

 
  1,850,000       8.032       10/01/24       1,735,540  
 

Ceridian HCM Holding, Inc. (1M LIBOR + 3.000%)

 
  2,970,000       4.800       04/30/25       2,973,712  
 

DCert Buyer, Inc. (1M LIBOR + 4.000%)

 
  1,775,000       5.786       10/16/26       1,740,618  
 

Financial & Risk US Holdings, Inc. (1M LIBOR + 3.750%)

 
  4,118,875       5.536       10/01/25       4,138,440  

 

 

 
Bank Loans(e)(j) – (continued)  
Technology – Software/Services – (continued)  
 

Infor (US), Inc. (3M LIBOR + 2.750%)

 
4,121,882       4.854       02/01/22     4,121,882  
 

Ion Trading Technologies S.a.r.l. (3M LIBOR + 4.000%)

 
  1,998,950       6.064       11/21/24       1,869,638  
 

MA FinanceCo. LLC (1M LIBOR + 2.250%)

 
  3,602,166       4.050       11/19/21       3,570,648  
 

SS&C Technologies Holdings Europe S.a.r.l. (1M LIBOR +
2.250%)

 
 
  1,315,649       4.036       04/16/25       1,317,846  
 

SS&C Technologies, Inc. (1M LIBOR + 2.250%)

 
  2,015,461       4.036       04/16/25       2,018,827  
 

The Dun & Bradstreet Corp. (1M LIBOR + 5.000%)

 
  3,100,000       6.804       02/06/26       3,107,099  
 

The Ultimate Software Group, Inc. (1M LIBOR + 3.750%)

 
  1,650,000       5.536       05/04/26       1,652,525  
 

TIBCO Software, Inc. (1M LIBOR + 4.000%)

 
  1,989,795       6.000       06/30/26       1,977,359  
     

 

 

 
        39,524,283  

 

 

 
Telecommunication Services – 0.2%  
 

Level 3 Financing, Inc. (1M LIBOR + 2.250%)

 
  3,000,000       4.036       02/22/24       3,002,250  

 

 

 
Wireless Telecommunications – 0.2%  
 

Intelsat Jackson Holdings SA(6M LIBOR + 3.750%)

 
  3,000,000       5.682       11/27/23       2,994,390  

 

 

 
Wirelines Telecommunications – 0.3%  
 

Consolidated Communications, Inc. (1M LIBOR + 3.000%)

 
  4,887,408       4.790       10/04/23       4,525,447  

 

 

 
  TOTAL BANK LOANS  
  (Cost $120,193,397)     $ 118,552,484  

 

 

 

 

Shares   Description     Value  
U.S. Treasury Obligation(k) – 0.1%  

United States Treasury Note

 
1,730,000     1.875     12/15/20       1,735,203  
(Cost $1,727,831)  

 

 

 

Shares   Dividend
Rate
    Value  
Investment Companies(l) – 5.3%  

Goldman Sachs Emerging Markets Equity Fund – Class R6

 

2,489     0.694   $ 54,599  

Goldman Sachs Financial Square Government Fund – Class R6

 

47,167,247     1.701       47,167,247  

Goldman Sachs Financial Square Government Fund – Institutional Shares

 

42,020,144     1.701       42,020,144  

Goldman Sachs High Yield Fund – Class R6

 

8,336     5.630       53,353  

 

 
TOTAL INVESTMENT COMPANIES

 

(Cost $89,285,869)

 

  $ 89,295,343  

 

 

 

The accompanying notes are an integral part of these financial statements.   29


GOLDMAN SACHS INCOME BUILDER FUND

 

Schedule of Investments (continued)

October 31, 2019

 

 

Principal

Amount

    Interest
Rate
    Maturity
Date
    Value  
Short-term Investments(f)(m) – 1.0%  
Commercial Paper – 1.0%  
 

AT&T, Inc.

 
$ 7,950,000       0.000     12/10/19     $ 7,931,097  
 

VW Credit, Inc.

 
  1,750,000       0.000       12/06/19       1,746,447  
  5,000,000       0.000       02/03/20       4,972,028  
  1,750,000       0.000       03/30/20       1,734,431  

 

 

 
  TOTAL SHORT-TERM INVESTMENTS  
  (Cost $16,370,808)     $ 16,384,003  

 

 

 
 
TOTAL INVESTMENTS BEFORE SECURITIES LENDING
REINVESTMENT VEHICLE
 
 
  (Cost $1,509,210,176)     $ 1,625,741,834  

 

 

 

 

Shares   Dividend
Rate
  Value  
Securities Lending Reinvestment Vehicle(l) – 0.0%  

Goldman Sachs Financial Square Government Fund – Institutional Shares

 

92,000   1.701%   $ 92,000  
(Cost $92,000)  

 

 
TOTAL INVESTMENTS – 97.0%

 

(Cost $1,509,302,176)   $ 1,625,833,834  

 

 

OTHER ASSETS IN EXCESS OF

    LIABILITIES – 3.0%

    49,646,752  

 

 
NET ASSETS – 100.0%   $ 1,675,480,586  

 

 

 

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

(a)

  All or a portion of security is on loan.

(b)

  Security is currently in default and/or non-income producing.

(c)

  Significant unobservable inputs were used in the valuation of this portfolio security; i.e., Level 3.

(d)

  Security with “Call” features with resetting interest rates. Maturity dates disclosed are the final maturity dates.

(e)

  Variable rate security. Except for floating rate notes (for which final maturity is disclosed), maturity date disclosed is the next interest reset date. Interest rate disclosed is that which is in effect on October 31, 2019.

 

(f)

  Exempt from registration under Rule 144A of the Securities Act of 1933.

(g)

  Pay-in-kind securities.

(h)

  Guaranteed by a foreign government until maturity. Total market value of these securities amounts to $667,997, which represents approximately 0.0% of the Fund’s net assets as of October 31, 2019.

(i)

  Actual maturity date is June 5, 2115.

(j)

  Bank Loans often require prepayments from excess cash flows or permit the borrower to repay at its election. The degree to which borrowers repay, whether as a contractual requirement or at their election, cannot be predicted with accuracy. As a result, the actual remaining maturity may be substantially less than the stated maturities shown. As bank loan positions may involve multiple underlying tranches for which the aggregate position is presented, the stated interest rate represents the weighted average interest rate of all contracts on October 31, 2019. Bank Loans typically have rates of interest which are predetermined either daily, monthly, quarterly or semi-annually by reference to a base lending rate, plus a premium. These base lending rates are primarily the London-Interbank Offered Rate (“LIBOR”), and secondarily the prime rate offered by one or more major United States banks (the “Prime Rate”) and the certificate of deposit (“CD”) rate or other base lending rates used by commercial lenders.

(k)

  All or a portion of security is segregated as collateral for initial margin requirements on futures transactions.

(l)

  Represents an affiliated issuer/fund.

(m)

  Issued with a zero coupon. Income is recognized through the accretion of discount.

 

 

Currency Abbreviations:

EUR

 

—Euro

GBP

 

—British Pound

USD

 

—U.S. Dollar

 

Investment Abbreviations:

ADR

 

—American Depositary Receipt

CMT

 

—Constant Maturity Treasury Indexes

EURO

 

—Euro Offered Rate

LIBOR

 

—London Interbank Offered Rate

LLC

 

—Limited Liability Company

LP

 

—Limited Partnership

MTN

 

—Medium Term Note

PLC

 

—Public Limited Company

REIT

 

—Real Estate Investment Trust

 

 

ADDITIONAL INVESTMENT INFORMATION

UNFUNDED LOAN COMMITMENTS — At October 31, 2019, the Fund had unfunded loan commitments which could be extended at the option of the borrowers, pursuant to the following loan agreements:

 

Borrower      Principal
Amount
       Current
Value
       Unrealized
Gain (Loss)
 

OEConnection LLC, due 09/25/26

     $ 196,970        $ 195,000        $ (998

 

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


GOLDMAN SACHS INCOME BUILDER FUND

 

 

 

ADDITIONAL INVESTMENT INFORMATION (continued)

 

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS — At October 31, 2019, the Fund had the following forward foreign currency exchange contracts:

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS WITH UNREALIZED LOSS

 

Counterparty  

Currency

Purchased

    

Currency

Sold

     Settlement
Date
     Unrealized
Loss
 

MS & Co. Int. PLC

  USD     1,396,085      EUR     1,264,242        11/27/19      $ (16,394
    USD     4,426,717      GBP     3,577,443        12/04/19        (212,458
TOTAL                                      $ (228,852

FUTURES CONTRACTS — At October 31, 2019, the Fund had the following futures contracts:

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount
       Unrealized
Appreciation/
(Depreciation)
 

Long position contracts:

                 

S&P 500 E-Mini Index

     359          12/20/19        $ 54,492,610        $ 550,684  

Ultra Long U.S. Treasury Bonds

     550          12/19/19          104,362,500          (3,811,963

U.S. Long Bonds

     23          12/19/19          3,711,625          (89,282

2 Year U.S. Treasury Notes

     8          12/31/19          1,724,813          (2,639

10 Year U.S. Treasury Notes

     173          12/19/19          22,541,359          184,158  
Total                                     $ (3,169,042

Short position contracts:

                 

Ultra 10 Year U.S. Treasury Notes

     (126        12/19/19          (17,905,781        372,054  

U.S. Long Bonds

     (156        12/19/19          (25,174,500        470,359  

5 Year U.S. Treasury Notes

     (529        12/31/19          (63,058,453        61,059  
Total                                     $ 903,472  
TOTAL FUTURES CONTRACTS                                     $ (2,265,570

SWAP CONTRACTS — At October 31, 2019, the Fund had the following swap contracts:

CENTRALLY CLEARED INTEREST RATE SWAP CONTRACTS

 

Payments Made by the Fund      Payments
Received
by Fund
            Termination
Date
      

Notional
Amount

(000s)(c)

       Market
Value
     Upfront
Premium
(Received)
Paid
     Unrealized
Appreciation/
(Depreciation)
 

1.485%(a)

       3M LIBOR(b)            05/15/45        $ 32,310        $ 2,023,188      $ 2,617,137      $ (593,949

1.500(a)

       3M LIBOR(b)            12/18/21          2,360          940        (39,433      40,373  

1.500(a)

       3M LIBOR(b)            12/18/22          3,490          (1,966      (91,096      89,130  

1.750(a)

       3M LIBOR(b)            12/18/26            10,170          (161,233      (96,317      (64,916

0.250(d)

       6M EURO(a)            12/18/24        EUR 800          (23,041      (30,841      7,800  

0.500(d)

       6M EURO(a)            12/18/26          160          (8,271      (10,237      1,966  

3M LIBOR(b)

       1.295%(a)            05/15/29        $ 31,330          (772,416      (1,077,598      305,182  

3M LIBOR(b)

       1.500(a)            12/18/29          211,090          (1,958,873      (3,530,294      1,571,421  

3M LIBOR(b)

       1.750(a)            12/18/39          1,870          (4,150      (21,486      17,336  

3M LIBOR(b)

       1.500(a)              12/18/24            165,590          224,457        (791,951      1,016,408  
TOTAL                                           $ (681,365    $ (3,072,116    $ 2,390,751  

 

  (a)   Payments made semi-annually.

 

The accompanying notes are an integral part of these financial statements.   31


GOLDMAN SACHS INCOME BUILDER FUND

 

Schedule of Investments (continued)

October 31, 2019

 

ADDITIONAL INVESTMENT INFORMATION (continued)

 

  (b)   Payments made quarterly.
  (c)   Represents forward starting interest rate swaps whose effective dates of commencement of accruals and cash flows occur subsequent to October 31, 2019.
  (d)   Payments made annually.

WRITTEN OPTION CONTRACTS — At October 31, 2019, the Fund had the following written options:

OVER-THE-COUNTER OPTIONS ON EQUITIES

 

Description    Counterparty    Exercise
Price
     Expiration
Date
     Number of
Contracts
    Notional
Amount
    Market
Value
    Premiums Paid
(Received) by
Portfolio
    Unrealized
Appreciation/
(Depreciation)
 

Written option contracts

                

Calls

                

SPX Index

   MS & Co. Int. PLC      3,010.070        11/15/2019        (21,989   $ (21,989   $ (922,238   $ (640,520   $ (281,718

STOX Indices

   UBS AG (London)      3,640.260        11/15/2019        (8,248     (8,248     (128,039     (207,607     79,568  
Total Over-the-Counter Options on Equities

 

              (30,237   $ (30,237   $ (1,050,277   $ (848,127   $ (202,150

 

 

Abbreviations:

MS & Co. Int. PLC

 

—Morgan Stanley & Co. International PLC

 

 

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


GOLDMAN SACHS RISING DIVIDEND GROWTH FUND

 

Schedule of Investments

October 31, 2019

 

Shares

    Description   Value  
Common Stocks – 97.2%  
Air Freight & Logistics – 1.0%  
  48,180     FedEx Corp.   $ 7,355,159  

 

 

 
Banks – 0.4%  
  99,750     Bank OZK     2,798,985  

 

 

 
Building Products – 1.2%  
  82,620     A.O. Smith Corp.     4,104,562  
  18,750     Lennox International, Inc.     4,638,000  
   

 

 

 
      8,742,562  

 

 

 
Capital Markets – 5.5%  
  41,460     Ameriprise Financial, Inc.     6,255,899  
  18,345     BlackRock, Inc.     8,469,886  
  32,462     Evercore, Inc. Class A     2,390,502  
  18,745     FactSet Research Systems, Inc.     4,752,232  
  32,685     Moody’s Corp.     7,213,253  
  74,105     SEI Investments Co.     4,440,372  
  57,494     T. Rowe Price Group, Inc.     6,657,805  
   

 

 

 
      40,179,949  

 

 

 
Chemicals – 1.9%  
  28,930     Ecolab, Inc.     5,556,585  
  5,245     NewMarket Corp.     2,546,395  
  9,877     The Sherwin-Williams Co.     5,652,805  
   

 

 

 
      13,755,785  

 

 

 
Commercial Services & Supplies – 0.7%  
  134,340     Rollins, Inc.     5,119,697  

 

 

 
Consumer Finance – 0.9%  
  78,974     Discover Financial Services     6,338,453  

 

 

 
Electric Utilities – 1.2%  
  37,700     NextEra Energy, Inc.     8,985,418  

 

 

 
Electrical Equipment – 0.9%  
  35,890     Rockwell Automation, Inc.     6,172,721  

 

 

 
Electronic Equipment, Instruments & Components – 3.6%  
  70,095     Amphenol Corp. Class A     7,032,631  
  34,755     Badger Meter, Inc.     2,008,839  
  227,175     Corning, Inc.     6,731,195  
  85,032     National Instruments Corp.     3,519,475  
  74,988     TE Connectivity Ltd.     6,711,426  
   

 

 

 
      26,003,566  

 

 

 
Energy Equipment & Services – 0.5%  
  217,400     USA Compression Partners LP     3,841,458  

 

 

 
Entertainment – 2.3%  
  128,900     The Walt Disney Co.     16,746,688  

 

 

 
Equity Real Estate Investment Trusts (REITs) – 2.6%  
  40,800     Digital Realty Trust, Inc.     5,183,232  
  60,735     Equity LifeStyle Properties, Inc.     4,247,806  
  38,890     Extra Space Storage, Inc.     4,366,180  
  23,600     Public Storage     5,259,496  
   

 

 

 
      19,056,714  

 

 

 
Common Stocks – (continued)  
Food & Staples Retailing – 3.5%  
  21,360     Casey’s General Stores, Inc.   3,648,502  
  27,610     Costco Wholesale Corp.     8,203,207  
  238,235     The Kroger Co.     5,870,110  
  141,755     Walgreens Boots Alliance, Inc.     7,765,339  
   

 

 

 
      25,487,158  

 

 

 
Food Products – 1.6%  
  140,260     Hormel Foods Corp.     5,735,231  
  43,625     Ingredion, Inc.     3,446,375  
  13,780     J&J Snack Foods Corp.     2,628,673  
   

 

 

 
      11,810,279  

 

 

 
Health Care Equipment & Supplies – 4.1%  
  2,670     Atrion Corp.     2,251,958  
  65,825     Danaher Corp.     9,072,002  
  87,110     Medtronic PLC     9,486,279  
  41,605     Stryker Corp.     8,997,913  
   

 

 

 
      29,808,152  

 

 

 
Health Care Providers & Services – 7.3%  
  79,250     AmerisourceBergen Corp.     6,766,365  
  127,165     Cardinal Health, Inc.     6,288,309  
  10,250     Chemed Corp.     4,037,578  
  144,671     CVS Health Corp.     9,604,708  
  53,495     McKesson Corp.     7,114,835  
  57,465     Quest Diagnostics, Inc.     5,818,331  
  60,131     The Ensign Group, Inc.     2,540,535  
  42,255     UnitedHealth Group, Inc.     10,677,838  
   

 

 

 
      52,848,499  

 

 

 
Hotels, Restaurants & Leisure – 1.5%  
  46,570     Brinker International, Inc.     2,070,037  
  17,645     Cracker Barrel Old Country Store, Inc.     2,743,797  
  59,885     Yum! Brands, Inc.     6,090,903  
   

 

 

 
      10,904,737  

 

 

 
Independent Power and Renewable Electricity Producers – 0.4%  
  49,200     NextEra Energy Partners LP     2,592,840  

 

 

 
Industrial Conglomerates – 1.2%  
  51,540     3M Co.     8,503,585  

 

 

 
Insurance – 4.5%  
  44,329     American Financial Group, Inc.     4,611,989  
  37,625     Aon PLC     7,267,645  
  102,670     Principal Financial Group, Inc.     5,480,525  
  79,200     Prudential Financial, Inc.     7,218,288  
  29,465     Reinsurance Group of America, Inc.     4,787,179  
  24,775     The Hanover Insurance Group, Inc.     3,263,115  
   

 

 

 
      32,628,741  

 

 

 
IT Services – 7.9%  
  45,532     Accenture PLC Class A     8,442,543  
  49,890     Automatic Data Processing, Inc.     8,093,655  
  44,732     Broadridge Financial Solutions, Inc.     5,601,341  

 

 

 

 

The accompanying notes are an integral part of these financial statements.   33


GOLDMAN SACHS RISING DIVIDEND GROWTH FUND

 

Schedule of Investments (continued)

October 31, 2019

 

Shares

    Description   Value  
Common Stocks – (continued)  
IT Services – (continued)  
  60,535     International Business Machines Corp.   $ 8,095,346  
  35,405     Jack Henry & Associates, Inc.     5,011,932  
  32,290     Mastercard, Inc. Class A     8,938,195  
  195,190     The Western Union Co.     4,891,461  
  47,770     Visa, Inc. Class A     8,544,142  
   

 

 

 
      57,618,615  

 

 

 
Leisure Products – 1.1%  
  45,105     Hasbro, Inc.     4,389,167  
  39,509     Polaris, Inc.     3,897,563  
   

 

 

 
      8,286,730  

 

 

 
Machinery – 0.5%  
  68,915     Donaldson Co., Inc.     3,634,577  

 

 

 
Media – 5.5%  
  293,504     CBS Corp. Class B     10,577,884  
  377,320     Comcast Corp. Class A     16,911,515  
  155,765     Omnicom Group, Inc.     12,023,500  
   

 

 

 
      39,512,899  

 

 

 
Metals & Mining – 0.5%  
  27,878     Reliance Steel & Aluminum Co.     3,234,963  

 

 

 
Multi-Utilities – 1.9%  
  97,536     CMS Energy Corp.     6,234,501  
  75,755     WEC Energy Group, Inc.     7,151,272  
   

 

 

 
      13,385,773  

 

 

 
Oil, Gas & Consumable Fuels – 14.5%  
  121,000     Alliance Resource Partners LP     1,379,400  
  159,811     Antero Midstream Corp.     1,029,183  
  81,000     BP Midstream Partners LP     1,194,750  
  117,000     Cheniere Energy Partners LP     5,256,810  
  149,500     DCP Midstream LP     3,422,055  
  234,000     Enable Midstream Partners LP     2,361,060  
  886,800     Energy Transfer LP     11,164,812  
  545,900     Enterprise Products Partners LP     14,209,777  
  248,377     Hess Midstream Partners LP     5,292,914  
  97,861     Holly Energy Partners LP     2,236,124  
  188,000     Magellan Midstream Partners LP     11,716,160  
  394,100     MPLX LP     10,392,417  
  30,068     Noble Midstream Partners LP     725,240  
  99,000     ONEOK, Inc.     6,913,170  
  90,500     Pembina Pipeline Corp.     3,181,980  
  123,500     Phillips 66 Partners LP     6,902,415  
  10,000     Tallgrass Energy LP Class A     186,600  
  108,076     Targa Resources Corp.     4,201,995  
  42,000     TC Energy Corp.     2,113,860  
  290,000     The Williams Cos., Inc.     6,469,900  
  66,530     Viper Energy Partners LP     1,601,377  
  155,707     Western Midstream Partners LP     3,310,331  
   

 

 

 
      105,262,330  

 

 

 
Common Stocks – (continued)  
Personal Products – 1.4%  
  52,236     Nu Skin Enterprises, Inc. Class A   2,328,681  
  40,090     The Estee Lauder Cos., Inc. Class A     7,467,564  
   

 

 

 
      9,796,245  

 

 

 
Pharmaceuticals – 0.6%  
  86,635     Perrigo Co. PLC     4,593,388  

 

 

 
Professional Services – 0.4%  
  28,395     Insperity, Inc.     2,999,364  

 

 

 
Semiconductors & Semiconductor Equipment – 5.6%  
  66,665     Analog Devices, Inc.     7,108,489  
  142,645     Applied Materials, Inc.     7,739,918  
  40,590     KLA Corp.     6,861,334  
  24,621     Power Integrations, Inc.     2,243,219  
  110,435     QUALCOMM, Inc.     8,883,391  
  63,650     Texas Instruments, Inc.     7,510,063  
   

 

 

 
      40,346,414  

 

 

 
Software – 1.2%  
  62,260     Microsoft Corp.     8,926,216  

 

 

 
Specialty Retail – 2.6%  
  47,739     Aaron’s, Inc.     3,577,083  
  90,645     Best Buy Co., Inc.     6,511,031  
  38,135     The Home Depot, Inc.     8,945,708  
   

 

 

 
      19,033,822  

 

 

 
Technology Hardware, Storage & Peripherals – 0.9%  
  392,805     HP, Inc.     6,823,023  

 

 

 
Textiles, Apparel & Luxury Goods – 3.3%  
  36,955     Columbia Sportswear Co.     3,342,618  
  92,390     NIKE, Inc. Class B     8,273,524  
  26,315     Oxford Industries, Inc.     1,812,051  
  44,345     Ralph Lauren Corp.     4,259,781  
  79,398     VF Corp.     6,533,661  
   

 

 

 
      24,221,635  

 

 

 
Trading Companies & Distributors – 2.5%  
  182,020     Fastenal Co.     6,541,799  
  31,188     MSC Industrial Direct Co., Inc. Class A     2,283,273  
  18,744     W.W. Grainger, Inc.     5,788,897  
  20,729     Watsco, Inc.     3,654,523  
   

 

 

 
      18,268,492  

 

 

 
  TOTAL COMMON STOCKS  
  (Cost $594,585,239)   $ 705,625,632  

 

 

 

 

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


GOLDMAN SACHS RISING DIVIDEND GROWTH FUND

 

 

 

Shares    

Dividend

Rate

  Value  
Investment Companies(a) – 2.3%  
 

Goldman Sachs Financial Square Government Fund – Class R6

 
  16,595,220     1.701%   $ 16,595,220  
 

Goldman Sachs Financial Square Government Fund –
Institutional Shares

 
 
   117,787     1.701     117,787  

 

 

 
  TOTAL INVESTMENT COMPANIES  
  (Cost $16,713,007)   $ 16,713,007  

 

 

 
  TOTAL INVESTMENTS – 99.5%  
  (Cost $611,298,246)   $ 722,338,639  

 

 

 
 
OTHER ASSETS IN EXCESS OF
    LIABILITIES – 0.5%
    3,371,272  

 

 

 
  NET ASSETS – 100.0%   $ 725,709,911  

 

 

 

 

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

(a)

  Represents an affiliated issuer.

 

 

Investment Abbreviations:

LP

 

—Limited Partnership

PLC

 

—Public Limited Company

 

 

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At October 31, 2019, the Fund had the following futures contracts:

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount
       Unrealized
Appreciation/
(Depreciation)
 

S&P 500 E-Mini Index

     143          12/20/19        $ 21,705,970        $ 234,933  

 

The accompanying notes are an integral part of these financial statements.   35


GOLDMAN SACHS DIVIDEND FOCUS FUNDS

 

Statements of Assets and Liabilities

October 31, 2019

 

        Income Builder
Fund
     Rising Dividend
Growth Fund
 
  Assets:

 

 

Investments, at value (cost $1,419,924,307 and $594,585,239, respectively)(a)

  $ 1,536,446,491      $ 705,625,632  
 

Investments of affiliated issuers, at value (cost $89,285,869 and $16,713,007, respectively)

    89,295,343        16,713,007  
 

Investments in securities lending reinvestment vehicle — affiliated issuer, at value (Cost $92,000 and $0, respectively)

    92,000         
 

Foreign currencies, at value (cost $999,730 and $0, respectively)

    1,011,490         
 

Cash

    26,453,144        2,483,966  
 

Variation margin on swaps contracts

    2,662,776         
 

Variation margin on futures contracts

    1,342,041        669  
 

Receivables:

    
 

Collateral on certain derivative contracts(b)

    19,139,368        990,989  
 

Dividends and interest

    11,904,232        1,381,334  
 

Fund shares sold

    2,985,600        136,293  
 

Investments sold

    2,401,531        252,032  
 

Reimbursement from investment adviser

    80,092