Goldman Sachs Funds S P E C I A L T Y F U N D S Annual Report December 31, 2005 Long-term growth of capital from portfolios that invest in a variety of equity securities.

Goldman Sachs Specialty Funds GOLDMAN SACHS TOLLKEEPER FUND^SM GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND GOLDMAN SACHS REAL ESTATE SECURITIES FUND The Tollkeeper Fund^SM invests in equity securities of high quality technology, media or service companies that adopt or use technology to improve their cost structure, revenue opportunities or competitive advantage. The Tollkeeper Fund^SM is subject to greater risk of loss as a result of adverse economic, business or other developments than if its investments were diversified across different industry sectors. Securities of issuers held by the Fund may lack sufficient market liquidity to enable the Fund to sell the securities at an advantageous time or without a substantial drop in price. Because the Fund invest in “Tollkeeper” companies, its net asset value may fluctuate substantially over time and its performance may be substantially different from the returns of the broader stock market. The Structured Tax-Managed Equity Fund invests in a broadly diversified portfolio of U.S. equity investments and is subject to market risk so that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular industry sectors and/or general economic conditions. The Fund may invest in securities of any capitalization, including mid-cap and small-cap companies, which involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements. The Fund uses both a variety of quantitative techniques and fundamental research when selecting investments which have the potential to maximize the Fund’s after-tax return, and minimize capital gains and income distribution. Of course, no assurance can be offered that the Structured Tax-Managed Equity Fund’s tax-managed strategies will reduce the amount of taxable income and capital gains distributed by the Fund to shareholders. The Fund is not suitable for IRAs or other tax-exempt or tax-deferred accounts. IRS Circular 230 Disclosure: Goldman Sachs does not provide legal, tax or accounting advice. Any statement contained in this communication (including any attachments) concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients of Goldman Sachs should obtain their own independent tax advice based on their particular circumstances. The Real Estate Securities Fund invests primarily in a diversified portfolio of equity investments in issuers related to the real estate industry, including Real Estate Investment Trusts (“REITs”). The value of a REIT is affected by changes in the value of the properties owned by the REIT or securing mortgage loans held by the REIT. REITs and real estate companies are also subject to risks generally associated with investments in real estate including possible declines in the value of real estate, general and local economic conditions, environmental problems and changes in interest rates. The Fund is subject to greater risk of loss as a result of adverse economic, business or other developments than if its investments were diversified across different industry sectors. Securities of issuers held by the Fund may lack sufficient market liquidity to enable the Fund to sell the securities at an advantageous time or without a substantial drop in price. Because the Fund invests in issuers related to the real estate industry, its net asset value may fluctuate substantially over time and its performance may be substantially different from the returns of the broader stock market. Effective January 6, 2006, the CORE^SM Tax-Managed Equity Fund was renamed the Structured Tax-Managed Equity Fund. NOT FDIC-INSURED May Lose Value No Bank Guarantee

G O L D M A N S A C H S T O L L K E E P E R F U N D ^{S M} What Differentiates the Goldman Sachs Tollkeeper Investment Process? The Goldman Sachs Tollkeeper Fund seeks to provide investors with a unique solution to investing in companies that are well positioned to benefit from the proliferation of technology. The Fund invests in a portfolio of high quality technology, media and service companies that adopt or use technology to improve their cost structure, revenue opportunities or competitive advantage. Goldman Sachs’ Growth Equity Investment Process 1 S T O C K S E L E C T I O N Buy the business: Invest as though we are actually buying the company, rather than trading its stock Buy high quality growth businesses: Strong brand name Free cash flow generation Dominant market share Long product life cycles Recurring revenue stream Strong company management Buy at a discount to the business’ true value 2 P O R T F O L I O C O N S T R U C T I O N Team Based: Portfolio decisions are made by the entire team Continuous Scrutiny: Daily review of market, industry and company developments Fundamental Analysis: Portfolio holdings are determined by the risk/reward characteristics and the team’s conviction in the overall business 3 R E S U LT Growth stock portfolio that: is strategically positioned for long-term growth potential has low turnover — a result of bottom-up stock selection with a focus on long-term investing is a high quality portfolio that is well positioned for long-term growth potential 1

P O R T F O L I O R E S U L T S Tollkeeper Fund Dear Shareholder: This report provides an overview on the performance of the Goldman Sachs Tollkeeper Fund during the one-year reporting period ended December 31, 2005. Performance Review During the one-year period that ended December 31, 2005, the Fund’s Class A, B, C, Institutional and Service Shares generated cumulative total returns, without sales charges, of 1.91%, 1.19%, 1.19%, 2.36% and 1.78%, respectively. These returns compare to the 1.37% cumulative total return of the Fund’s benchmark, the NASDAQ Composite Index, over the same time period. As these returns indicate, the Fund performed largely in line with its benchmark during the reporting period. Market Review In 2005, the U.S. equity markets generated single-digit returns, but there was disparity of performance between different industries. Energy and Utility companies continued to be favored by investors, producing significant returns. Conversely, areas such as the Auto industry and the Consumer Discretionary sector suffered from weak sales growth throughout the year. The housing market in some regions began to cool by mid-year on the backdrop of steady and consistent tightening of monetary policy by the Federal Reserve Board (the “Fed”). The Fed’s actions were anticipated by the market, as the U.S. economy was robust and many corporations revealed large cash balances. Towards the middle of the year, growth style investing began to outperform value for the first extended period in over five years. Portfolio Positioning Iron Mountain, Inc. was a strong performer during the year. Shares of Iron Mountain, one of the market leaders in records and information management, were up on the heels of a strong earnings release, which exceeded expectations as profits nearly doubled. Strength was driven by better margins, pricing gains, and growth in free cash flow. Toward the end of the year, Iron Mountain also raised its full-year guidance for 2005, citing continued improvement in the company’s fundamentals and sustained growth in its newer digital archive business segment. In the Media sector, Cablevision Systems Corp.’s stock rose sharply after the Dolan family announced that it intended to take the business private for approximately $8 billion. Under the terms of the deal, investors would have received $21 for each share of Cablevision owned plus shares in Rainbow Media, which consists of properties such as Madison Square Garden, the New York Knicks and Rangers, as well as cable networks American Movie Classics (AMC), Women’s Entertainment (WE), and Independent Film Channel (IFC). Upon the market’s positive reaction to the news, we exited our position and were not negatively affected by the Dolan family’s decision to rescind the offer. 2

P O R T F O L I O R E S U L T S On the positive side, within the Technology sector, Google, Inc. and Salesforce.com, Inc. significantly contributed to returns. Salesforce.com, a leading provider of on-demand customer relationship-management services and software, continued to execute strongly, adding 43,000 net subscribers during the year. Google’s stock climbed higher during the period as the company released its third-quarter earnings that revealed a seven-fold increase from last year. New products such as instant messaging and improvements to Google Maps were credited for attracting higher volumes of traffic to the company’s website. In addition, we believe Google increased its advertising clout and strengthened its bond with Time Warner’s America Online unit by buying a 5% stake in the company. Google continues to be the dominant market share leader with a commanding 45% share of all U.S. Internet searches. Maintaining our favorable opinion of Google’s prospects, but minding our valuation discipline, we trimmed the position towards the end of the year. Detractors from returns included weak performance by Dolby Laboratories, Inc. and Dell, Inc. Investors reacted negatively to Dolby’s lowered guidance based on weaker royalty reports. The company said that the slowdown in traditional DVD players, the slower-than-expected switch to next-generation players, and the lack of a High-Definition (HD) standard had a negative impact on short-term performance. We believe the company’s long-term fundamentals remain intact. At the beginning of November 2005, Dell lowered its earnings guidance for its recently completed fiscal third quarter, driving its stock down. The reduced expectations for growth were attributed to restructuring and faulty computer component charges. Although Dell is in the midst of a turnaround, refocusing on profitability versus volume, we do not believe that its business model is broken. As Dell works through some of its near-term issues, we believe the market will realize that some of the problems facing Dell are transitional, and are not all secular in nature. Portfolio Highlights American Tower Corp.—American Tower contributed to performance and delivered strong results in 2005. The company’s core tower division grew revenue nearly 10% and its recently acquired SpectraSite division grew revenues slightly higher than the American Tower’s overall revenues. The company also announced a $750 million buyback program that will retire 6% of shares outstanding. This represents the first time American Tower will return capital to stock shareholders. Marvell Technology Group Ltd.—Marvell Technology Group continued to execute well in terms of gaining share in the hard-drive semiconductor market. Their small form factor hard drives are used in products such as iPods and digital video recorders such as TiVos. In addition, Marvell’s wireless LAN for consumer markets has seen solid early results, including being used in Sony’s new Play Station Portable product. 3

P O R T F O L I O R E S U L T S Univision Communications Inc.— Toward the end of 2005, the company reported an increase in earnings, citing higher ratings versus English-language networks and strong advertising sales. The Univision network ranked second in prime time viewership during the quarter, behind Fox and ahead of CBS, NBC, and ABC. The company sees growth accelerating in the fourth quarter and into 2006 as a result of strong upfront ad sales, capitalizing on record ratings, and increased efficiencies. The company also announced an initiative to focus more resources on sales and marketing while also cutting costs. In addition, we believe investors reacted positively to the company’s announcement that it acquired Spanish-language U.S. broadcast rights to the 2010 and 2014 World Cups and other soccer tournaments. We sold the stock during the reporting period to capture profits. We thank you for your investment and look forward to your continued confidence. Goldman Sachs Growth Equity Management Team January 18, 2006 4

F U N D B A S I C S Tollkeeper Fund as of December 31, 2005 Assets Under Management P E R F O R M A N C E R E V I E W January 1, 2005— Fund Total Return NASDAQ $315.7 Million December 31, 2005 (based on NAV)¹ Composite Index² Class A 1.91% 1.37% Class B 1.19 1.37 Number of Holdings Class C 1.19 1.37 Institutional 2.36 1.37 34 Service 1.78 1.37 ¹The net asset value (NAV) represents the net assets of the class of the Fund (ex-dividend) divided by the total number of shares of the class outstanding. The Fund’s performance reflects the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges. N A S D A Q S Y M B O L S ²The NASDAQ Composite Index is a broad-based capitalization-weighted index of all NASDAQ National Market and Small-Cap stocks. The Index figures do not reflect any deduction for fees, Class A Shares expenses or taxes. It is not possible to invest directly in an unmanaged index. GITAX S T A N D A R D I Z E D T O T A L R E T U R N S ³ For the period ending December 31, 2005 One Year Five Years Since Inception³ (10/1/99) Class A -3.72% -8.62% -4.10% Class B Shares Class B -3.81 -8.65 -3.96 Class C 0.19 -8.29 -3.98 GITBX Institutional 2.36 -7.21 -2.83 Service 1.78 -7.62 -3.29 ³The Standardized Total Returns are average annual total returns as of the most recent calendar Class C Shares quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 5.5% for Class A Shares and the assumed deferred sales charge for Class B Shares (5% maximum declining to 0% after six years) and the assumed deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because GITCX Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns. Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The investment return and principal value of an investment will fluctuate Institutional Shares and, therefore, 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 total return figures in the above charts. Please visit www.gs.com/funds to obtain the most recent month-end returns. Performance reflects GITIX expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. T O P 1 0 H O L D I N G S A S O F 1 2 / 3 1 / 0 5 ⁴ Service Shares Holding % of Net Assets Line of Business GITSX Microsoft Corp. 5.9% Computer Software Cisco Systems, Inc. 4.7 Networking/Telecommunications Equipment Tessera Technologies, Inc. 4.6 Semi Capital American Tower Corp. 4.5 Telecommunications Dell, Inc. 4.5 Computer Hardware Linear Technology Corp. 4.5 Semiconductors Iron Mountain, Inc. 4.3 Commercial Services First Data Corp. 4.1 Computer Services Avocent Corp. 4.0 Computer Hardware QUALCOMM, Inc. 4.0 Semiconductors ⁴The top 10 holdings may not be representative of the Fund’s future investments. 5

F U N D B A S I C S S E C T O R A L L O C AT I O N A S O F 1 2 / 3 1 / 0 5 ⁵ Percentage of Portfolio 59.8% 60% 50% 40% 30% 17.7% 20% 12.6% 10% 5.9% 2.0% 2.0% 0% Internet and Online Media Other Short-term Investments Technology Telecommunications ⁵The percentage shown for each investment category reflects the value of investments in that category as a percentage of market value. Short-term investments include repurchase agreements and securities lending collateral. 6

G O L D M A N S A C H S S T R U C T U R E D T A X — M A N A G E D E Q U I T Y F U N D What Differentiates the Goldman Sachs Structured Tax-Management Process? In managing money for many of the world’s wealthiest taxable investors, Goldman Sachs often constructs a diversified investment portfolio around a tax-managed core. With the Goldman Sachs Structured Tax-Managed Equity Fund, investors can access Goldman Sachs’ tax-smart investment expertise while capitalizing on this same strategic approach to portfolio construction. Goldman Sachs’ Structured Tax-Management Investment Process Goldman Sachs’ CORE^SM (“Computer-Optimized, Research-Enhanced”) investment process is a disciplined quantitative approach that has been consistently applied since 1989. With this Fund, the CORE process is enhanced with an additional layer that seeks to maximize after-tax returns. 1 S T O C K S E L E C T I O N Comprehensive Extensive Rigorous Fundamental Objective Insightful Advantage: Daily analysis of approximately 3,000 U.S. equity securities using a proprietary model 2 P O R T F O L I O C O N S T R U C T I O N Benchmark driven Sector and size neutral Tax optimized Tax optimization is an additional layer that is built into the existing CORE investment process —a distinct advantage. While other managers may simply seek to minimize taxable distributions through a low turnover strategy, this extension of CORE seeks to maximize after-tax returns —the true objective of every taxable investor. Advantage: Value added through stock selection — not market timing, industry rotation or style bias 3 R E S U LT A fully invested, style—consistent portfolio Broad access to the total U.S. equity market A consistent goal of maximizing after-tax risk-adjusted returns 7

P O R T F O L I O R E S U L T S Structured Tax-Managed Equity Fund Dear Shareholder: This report provides an overview on the performance of the Goldman Sachs Structured Tax-Managed Equity Fund during the one-year reporting period ended December 31, 2005. Performance Review For the one-year period that ended December 31, 2005, the Fund’s Class A, B, C, Institutional, and Service Shares generated cumulative total returns, without sales charges, of 8.77%, 7.96%, 7.97%, 9.25% and 8.70%, respectively. These returns compare to the 6.12% cumulative total return of the Fund’s benchmark, the Russell 3000 Index (with dividends reinvested), over the same time period. The Fund outperformed its benchmark over the reporting period, due to solid returns from the CORE themes, a disciplined approach to security analysis and rigorous risk management. Returns from the CORE themes were positive for the one-year period. Momentum was the most significant contributor to relative returns, as companies with strong momentum characteristics outperformed their industry counterparts. Valuation, Earnings Quality, Profitability, Management Impact and Analyst Sentiment also added value, albeit to a lesser extent. Stock selection was successful overall during the reporting period. The Fund’s positions in the Information Technology and Energy sectors outpaced their peers in the benchmark the most. On the downside, stock selection in the Consumer Discretionary and Healthcare sectors hurt returns the most for the period, but did little to offset the gains experienced elsewhere. Market Review The U.S. equity markets finished 2005 with solid gains, resulting in a third calendar year of positive returns. After a lackluster first half, the markets strengthened in the third and fourth quarters of the year and the S&P 500 Index returned 4.91% during the one-year period ended December 31, 2005. The broad market, as measured by the Russell 3000 Index, returned 6.12% over the same period. Value stocks outperformed their growth counterparts for the sixth consecutive year, with the Russell 3000 Value Index returning 6.85% versus the Russell 3000 Growth Index return of 5.17%. From a market cap perspective, mid-caps outperformed large- and small-cap stocks, with the Russell MidCap, Russell 1000 and Russell 2000 Indexes returning 12.65%, 6.27% and 4.55%, respectively. Portfolio Positioning The Structured Tax-Managed Equity Fund seeks to provide investors with a tax-efficient means for maintaining broadly diversified exposure to the entire U.S. equity market. The benchmark is the Russell 3000 Index, which covers a range of issuers from large- to small-cap stocks. In managing the structured products, we do not take size or sector bets. Rather, we seek to add value versus the Fund’s benchmark by individual stock selection. Our quantitative process seeks out stocks with good momentum that also appear to be good values (relative to other stocks in the same industry). We prefer stocks favored by fundamental research analysts 8

P O R T F O L I O R E S U L T S and less volatile stocks with lower-than-average probability of reporting disappointing earnings. Our portfolio construction process integrates tax considerations into investment decisions with the goal of maximizing after-tax return. In terms of individual stocks, overweights in Sunoco, Inc., Tesoro Petroleum Corp., and Valero Energy Corp. were among the most successful holdings in the portfolio during the reporting period. On the downside, overweight positions in Biogen IDEC Inc., Pfizer, Inc., and Harman International Industries Inc. were among the biggest detractors from excess returns for the one-year period. Biogen IDEC and Harman International Industries Inc. were eliminated from the portfolio during the period. We thank you for your investment and look forward to your continued confidence. Goldman Sachs Quantitative Equity Investment Team New York, January 18, 2006 9

F U N D B A S I C S Structured Tax-Managed Equity Fund as of December 31, 2005 Assets Under Management P E R F O R M A N C E R E V I E W January 1, 2005— Fund Total Return $142.4 Million December 31, 2005 (based on NAV)¹ Russell 3000 Index² Class A 8.77% 6.12% Number of Holdings Class B 7.96 6.12 Class C 7.97 6.12 Institutional 9.25 6.12 169 Service 8.70 6.12 ¹The net asset value (NAV) represents the net assets of the class of the Fund (ex-dividend) divided by the total number of shares of the class outstanding. The Fund’s performance assumes the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges. N A S D A Q S Y M B O L S ²The Russell 3000 Index is an unmanaged index that measures the performance of the 3,000 largest U.S. companies based on total market capitalization which represents approximately 98% of the Class A Shares investable U.S. equity market. Index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an unmanaged index. GCTAX S T A N D A R D I Z E D T O T A L R E T U R N S ³ For the period ending December 31, 2005 One Year Five Years Since Inception (4/3/00) Class B Shares Class A 2.75% 2.08% -0.17% Class B 2.96 2.10 -0.10 GCTBX Class C 6.97 2.46 0.05 Institutional 9.25 3.67 1.23 Service 8.70 3.15 0.74 Class C Shares ³The Standardized Total Returns are average annual total returns as of the most recent calendar quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 5.5% for Class A Shares, the assumed deferred sales charge for Class B Shares (5% maximum declining to 0% after six years) and the assumed deferred sales GCTCX charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns. Total return figures in the above charts represent past performance and do not indicate future Institutional Shares results, which will vary. The investment return and principal value of an investment will fluctuate and, therefore, 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 total return figures in the above charts. GCTIX Please visit www.gs.com/funds to obtain the most recent month-end returns. Performance reflects expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Service Shares T O P 1 0 H O L D I N G S A S O F 1 2 / 3 1 / 0 5 ⁴ Holding % of Net Assets Line of Business GCTSX General Electric Co. 2.8% Industrial Conglomerates Procter & Gamble Co. 2.6 Household Products Bank of America Corp. 2.5 Banks Johnson & Johnson 2.2 Pharmaceuticals Hewelett-Packard Co. 1.8 Computers & Peripherals Verizon Communications, Inc. 1.8 Diversified Teleommunication Services The Coca-Cola Co. 1.8 Beverages UnitedHealth Group, Inc. 1.8 Healthcare Providers & Services Time Warner, Inc. 1.8 Media Google, Inc. 1.7 Internet Software & Services 10 ⁴The top 10 holdings may not be representative of the Fund’s future investments.

F U N D B A S I C S STANDARDIZED AFTER-TAX PERFORMANCE AS OF 12/31/05 Since Inception Class A Shares One Year Five Years (4/3/00) Returns before taxes* 2.75% 2.08% -0.17% Returns after taxes on distributions** 2.74 2.04 -0.21 Returns after taxes on distributions*** 1.80 1.76 -0.16 and sale of Fund shares The after-tax returns are calculated using the historically highest individual federal marginal income tax rates at the time of distributions and do not reflect state and local taxes. In addition, the after-tax returns shown are not relevant to investors who hold Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. Under certain circumstances, the addition of the tax benefits from capital losses resulting from redemptions may cause the Returns After Taxes on Distributions and Sale of Fund Shares to be greater than the Returns After Taxes on Distributions or even Returns Before Taxes. The after-tax returns for Institutional and Service Classes and Class B and Class C Shares will vary. Standardized after-tax returns assume reinvestment of all distributions at NAV and reflect a maximum initial sales charge of 5.5% for Class A Shares. * Returns Before Taxes do not reflect taxes on distributions on a Fund’s Class A Shares nor do they show how performance can be impacted by taxes when shares are redeemed. ** Returns After Taxes on Distributions assume that taxes are paid on distributions on a Fund’s Class A Shares (i.e., dividends and capital gains) but do not reflect taxes that may be incurred upon redemption of the Class A Shares at the end of the performance period. *** Returns After Taxes on Distributions and Sale of Fund Shares reflect taxes paid on distributions on a Fund’s Class A Shares and taxes applicable when the shares are redeemed. 11

F U N D B A S I C S S E C T O R A L L O C AT I O N A S O F 1 2 / 3 1 / 0 5 ⁵ Percentage of Portfolio 25% 21.6% 20% 16.2% 14.5% 15% 11.7% 11.8% 10% 8.2% 7.6% 5% 3.6% 1.9% 2.5% 0.4% 0% Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Short-term Investments Telecommunication Services Utilities ⁵The percentage shown for each investment category reflects the value of investments in that category as a percentage of market value. Short-term investments include repurchase agreements and securities lending collateral. 12

G O L D M A N S A C H S R E A L E S T A T E S E C U R I T I E S F U N D What Differentiates the Goldman Sachs Real Estate Investment Process? The Goldman Sachs Real Estate Securities Strategy seeks to generate long-term growth of capital and dividend income by investing primarily in real estate investment trusts (REITs). REITs offer daily liquidity, strong historic returns, low volatility and low correlation to traditional asset classes. Goldman Sachs’ Real Estate Investment Process 1 S T O C K S E L E C T I O N Buy high quality companies. We seek to purchase those companies that combine the best market exposures, capital structures, growth prospects and management teams. Buy at a reasonable price. We seek to consistently select securities at a discount to the intrinsic value of the business. Diversification reduces risk. We seek to diversify the portfolio holdings based on property type and geographic markets to manage risk without compromising returns. 2 P O R T F O L I O C O N S T R U C T I O N Team Based: Portfolio decisions are made by the entire team Continuous Scrutiny: Daily review of market, industry and company developments Fundamental Analysis: Portfolio holdings are determined by the risk reward characteristics and the team’s conviction in the overall business 3 R E S U LT Real estate securities portfolio that: is strategically positioned for long-term growth potential has low turnover — a result of bottom-up stock selection with a focus on long-term investing is a high quality portfolio that is well positioned for long-term growth potential 13

P O R T F O L I O R E S U L T S Real Estate Securities Fund Dear Shareholder, This report provides an overview on the performance of the Goldman Sachs Real Estate Securities Fund during the one-year reporting period that ended December 31, 2005. Performance Review Over the one-year period that ended December 31, 2005, the Fund’s Class A, B, C, Institutional, and Service Shares generated cumulative total returns of 12.83%, 12.03%, 12.03%, 13.30% and 12.76%, respectively. These returns compare to the 14.04% cumulative total return of the Fund’s benchmark, the Wilshire Real Estate Securities Index (with dividends reinvested), over the same time period. During the reporting period, the Fund underperformed its benchmark as its overweight position in the Hotel sector and stock selection in the Multi-family sector detracted from performance. In contrast, stock selection was positive in the Retail and Industrial sectors, as was an overweight in the Office sector. Market Review The real estate securities market, as measured by the Wilshire Real Estate Securities Index, returned 14.04% in 2005. While returns were volatile for the year, the REIT market outperformed the S&P 500 Index for the sixth year in a row. The REIT market was supported by the continued recovery in real estate. In addition, investors sought to diversify their portfolios with yield-oriented assets. Although the U.S. economy was faced with numerous challenges in 2005, including rising short-term interest rates, higher energy prices, and a slowing housing market, gross domestic product (“GDP”) increased at an annual rate of 3.6% and the economy added over two million jobs. The unemployment rate averaged 5.1%, an improvement from the 5.5% average in 2004. In the case of commercial real estate, continued job growth, combined with moderate new supply levels, fueled improving fundamentals, both in terms of occupancy and rental levels. Consequently, real estate securities earnings accelerated in 2005. Portfolio Positioning The Self-Storage sector had an exceptionally good year, posting the highest return of any sector. Although the Fund’s underweight position detracted from performance, we maintained this posture due to valuation concerns. We believe aggressive earnings expectations and merger-and- acquisition activity, specifically Public Storage, Inc.’s ongoing take-over attempt of Shurgard Storage Centers Inc., has now made Self Storage one of the most richly valued sectors. Although the Fund’s modest underweight in the strong-performing Retail sector over the period detracted from performance, positive stock selection more than compensated for this positioning. In particular, the Fund’s overweight in General Growth Properties, Inc. and Kimco Realty Corp. enhanced results. After underperforming in the first half of the year, the Residential sector ended the fiscal year slightly ahead of the broad REIT market. Relatively low interest rates and relatively easy mortgage terms had lured many apartment dwellers into 14

P O R T F O L I O R E S U L T S homeownership and occupancy levels consequently dropped. However, we believe that higher home prices and moderately rising interest rates are now making ownership for many would-be first-time buyers more difficult. Additionally, we believe there are positive employment and demographic trends favoring the Residential sector. As a result, apartment landlords are seeing vacancies fall and concessions drop in many markets across the country. Although this is positive, we believe much of this fundamental improvement is already reflected in valuations. With merger-and-acquisition euphoria and buy-out speculation further propelling valuations, the Fund remains underweight in the Residential sector. Within the sector, we continue to focus on those companies that have strong balance sheets and the ability to raise dividends. One such Fund holding that met those criteria over the reporting period was AvalonBay Communities, Inc. After several years of negative fundamentals, the Office sector improved in 2005, with the national vacancy rate at approximately 14.7% versus 16.3% in the fourth quarter of 2004. The last three months of 2005 marked the seventh straight quarter of vacancy declines, with rental rates showing their strongest annual growth in five years. Very modest levels of new supply in the higher-barrier markets have been a critical component of the ongoing Office recovery. However, the overall numbers mask some disparities. Certain markets have demonstrated strong gains, particularly New York, Washington DC, and Southern California. Though generally improving, other markets, such as Chicago, have relatively high vacancy rates and tenants still have strong negotiating power. We remain focused on those companies that have strong management teams, high quality assets, strong capital structures and favorable geographic exposures. The Industrial sector continued to improve at a slightly more accelerated pace versus the Office sector. We remain focused on companies such as ProLogis and AMB Property Corp., which are headquartered in the U.S. but have a global platform. Both companies focus on developing and managing a global distribution network for the world’s largest users of warehouse space. Due to positive economic trends and the unique, value-enhancing business strategies of these two companies, the Fund was overweight the Industrial sector. Hotel stocks were affected by the broader market weakness during the year, partially stemming from concern over higher fuel costs. In 2005, hotel stocks returned roughly 8%, outperforming the broad equity market but underperforming real estate securities. We believe the concern was exaggerated, as hotel fundamentals are exceptionally strong. New construction, particularly in the case of the high-end luxury segment, has been muted and condominium conversions have helped further constrict new supply in major markets. Leisure travel continues to remain strong, corporate travel is approaching a pre-9/11 pace, and the relatively weak dollar continues to entice foreign travel. According to Smith Travel Research, U.S. room occupancy rose 7% in 2005 and revenue per room climbed 15%. In addition, average daily room rates moved from $76.50 to $81.93, a 7.1% increase over the last 12 months. Given that the Hotel 15

P O R T F O L I O R E S U L T S sector was the best REIT performer in the fourth quarter of 2005, it seems the market is now regaining confidence in the sector. We remain focused on the luxury segment where margins are most attractive and demand the strongest. In this area, the Fund holds companies such as Starwood Hotels & Resorts Worldwide, Inc., Host Marriott Corp. and Hilton Hotels Corp. Portfolio Highlights General Growth Properties, Inc. — General Growth Properties is the second largest mall owner in the U.S. Its strategy is to develop, acquire and renovate regional malls to create a geographically diverse and productive national mall portfolio. Starwood Hotels & Resorts Worldwide, Inc. — Starwood’s focus on the luxury segment within urban markets, its excellent balance sheet and successful repositioning of the Sheraton brand have contributed to its recent performance. New supply in the upscale segment, in which most of Starwood’s properties reside, continues to drop. Starwood generates almost 20% of its North American revenue from New York City, arguably the strongest hotel market in the country. SL Green Realty Corp. — SL Green Realty Corp. owns and operates a portfolio of 28 commercial office buildings with over 17 million square feet focused in midtown Manhattan. The Company has a strong balance sheet, a strong and experienced management team and a track record of producing long-term value for its shareholders. With its geographic focus on midtown Manhattan, where occupancies are much higher than the national average and rents are increasing rapidly, SL Green continued to outperform its peers. We remain confident and focused on our fundamental premise that good companies with superior management and strategies will outperform over time. As such, we are comfortable with the current positioning of the Fund. We thank you for your investment and look forward to your continued confidence. Goldman Sachs Real Estate Securities Investment Team January 18, 2006 16

F U N D B A S I C S Real Estate Securities Fund as of December 31, 2005 Assets Under Management T P E R F O R M A N C E R E V I E W January 1, 2005— Fund Total Return Wilshire Real Estate $697.6 Million December 31, 2005 (based on NAV)¹ Securities Index² Class A 12.83% 14.04% Class B 12.03 14.04 Number of Holdings Class C 12.03 14.04 Institutional 13.30 14.04 46 Service 12.76 14.04 ¹ The net asset value (NAV) represents the net assets of the class of the Fund (ex-dividend) divided by the total number of shares of the class outstanding. The Fund’s performance reflects the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges. N A S D A Q S Y M B O L S ² The Wilshire Real Estate Securities Index is a market capitalization-weighted index comprised of publicly traded real estate investment trusts (REIT) and real estate operating companies. The Index is Class A Shares unmanaged and does not reflect any fees or expenses. It is not possible to invest directly in an unmanaged index. GREAX S T A N D A R D I Z E D T O T A L R E T U R N S ³ For the period ending December 31, 2005 One Year Five Years Since Inception (7/27/98) Class A 6.61% 16.97% 14.13% Class B Shares Class B 6.66 17.14 14.16 Class C 10.96 17.46 14.19 GREBX Institutional 13.30 18.77 15.46 Service 12.76 18.25 14.96 ³ The Standardized Total Returns are average annual total returns as of the most recent calendar Class C Shares quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 5.5% for Class A Shares and the assumed contingent deferred sales charge for Class B Shares (5% maximum declining to 0% after six years) and the assumed GRECX contingent deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns. Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The investment return and principal value of an investment will fluctuate Institutional Shares and, therefore, 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 total return figures in the above charts. Please visit www.gs.com/funds to obtain the most recent month-end returns. Performance reflects GREIX expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. T O P 1 0 H O L D I N G S A S O F 1 2 / 3 1 / 0 5 ⁴ Service Shares Holding % of Net Assets Line of Business GRESX Simon Property Group, Inc. 6.9% Regional Malls Starwood Hotels & Resorts Worldwide, Inc. 6.5 Hotels ProLogis 5.8 Industrial Vornado Realty Trust 5.2 Diversified General Growth Properties, Inc. 4.8 Regional Malls Kimco Realty Corp. 4.0 Shopping Centers Host Marriott Corp. 4.0 Hotels Boston Properties, Inc. 4.0 Office Equity Residential Properties Trust 3.6 Residential AMB Property Corp. 3.3 Industrial ⁴ The top 10 holdings may not be representative of the Fund’s future investments. 17

F U N D B A S I C S S E C T O R A L L O C AT I O N A S O F 1 2 / 3 1 / 0 5 ⁵ Percentage of Portfolio 25% 20.1% 20% 15% 13.3% 13.0% 12.9% 11.7% 10.8% 10% 8.6% 5.5% 5% 2.3% 1.3% 0.5% 0% Diversified Health Care Hotels Industrial Office Other REIT Regional Malls Residential Self Storage Shopping Centers Short-term Investments ⁵The percentage shown for each investment category reflects the value of investments in that category as a percentage of market value. Short-term investments include repurchase agreements and securities lending collateral. 18

GOLDMAN SACHS TOLLKEEPER FUND^SM

Performance Summary

December 31, 2005

The following graph shows the value as of December 31, 2005, of a $10,000 investment made on October 1, 1999 (commencement of operations) in Class B Shares (with the maximum contingent deferred sales charge of 5.0%). For comparative purposes, the performance of the Fund’s benchmark (the NASDAQ Composite Index) is shown. This performance data represents past performance and should not be considered indicative of future performance, which will fluctuate with changes in market conditions. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. Performance reflects expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance of Class A, Class C, Institutional and Service Shares will vary from Class B Shares due to differences in fees and sales loads. In addition to the investment adviser’s decision regarding issuer/industry investment selection and allocation, other factors may affect portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Tollkeeper Fund’s Lifetime Performance

Performance of a $10,000 Investment, with dividends reinvested, from October 1, 1999 to December 31, 2005.

Average Annual Total Return through December 31, 2005	Since Inception		Five Years		One Year
Class A (Commenced October 1, 1999)
Excluding sales charges		-3.23%		-7.58%		1.91%
Including sales charges		-4.10%		-8.62%		-3.72%
Class B (Commenced October 1, 1999)
Excluding contingent deferred sales charges		-3.96%		-8.28%		1.19%
Including contingent deferred sales charges		-3.96%		-8.65%		-3.81%
Class C (Commenced October 1, 1999)
Excluding contingent deferred sales charges		-3.98%		-8.29%		1.19%
Including contingent deferred sales charges		-3.98%		-8.29%		0.19%
Institutional Class (Commenced October 1, 1999)		-2.83%		-7.21%		2.36%
Service Class (Commenced October 1, 1999)		-3.29%		-7.62%		1.78%

19

GOLDMAN SACHS TOLLKEEPER FUND^SM

Statement of Investments

December 31, 2005

Shares		Description	Value
Common Stocks – 99.9%
Audio Technology – 2.6%
	478,110	Dolby Laboratories, Inc.*	$	8,151,775
Commercial Services – 6.9%
	324,010	Iron Mountain, Inc.*		13,679,702
	158,280	The McGraw-Hill Cos., Inc.		8,171,997
				21,851,699
Computer Hardware – 11.5%
	467,710	Avocent Corp.*		12,717,035
	473,290	Dell, Inc.*		14,193,967
	696,130	EMC Corp.*		9,481,291
				36,392,293
Computer Services – 4.1%
	301,770	First Data Corp.		12,979,128
Computer Software – 19.8%
	725,410	Activision, Inc.*		9,967,133
	176,880	Cognos, Inc.*		6,139,505
	210,953	Electronic Arts, Inc.*		11,034,951
	717,860	Microsoft Corp.		18,772,039
	187,650	NAVTEQ*		8,232,206
	261,601	Salesforce.com, Inc.*		8,384,312
				62,530,146
Internet & Online – 3.5%
	26,600	Google, Inc.*		11,035,276
Movies & Entertainment – 4.5%
	448,300	Time Warner, Inc.		7,818,352
	195,941	Viacom, Inc. Class B*		6,387,677
				14,206,029
Networking/ Telecommunications Equipment – 7.5%
	870,720	Cisco Systems, Inc.*		14,906,727
	226,140	FLIR Systems, Inc.*		5,049,706
	170,020	Juniper Networks, Inc.*		3,791,446
				23,747,879
Other Technology – 1.3%
	180,405	Cogent, Inc.*		4,091,585
Publishing – 3.0%
	203,880	Lamar Advertising Co.*		9,407,023
Semi-Capital – 9.7%
	372,550	FormFactor, Inc.*		9,101,397
	139,310	KLA-Tencor Corp.		6,872,162
	562,470	Tessera Technologies, Inc.*		14,539,849
				30,513,408
Semiconductors – 12.7%
	390,280	Linear Technology Corp.		14,077,400
	141,010	Marvell Technology Group Ltd.*		7,909,251
	295,010	QUALCOMM, Inc.		12,709,031
	14,560	Suntech Power Holdings Co., Ltd. ADR*		396,760
	191,430	Xilinx, Inc.(a)		4,825,950
				39,918,392
Telecommunications – 12.8%
	526,600	American Tower Corp.*		14,270,860
	200,951	Crown Castle International Corp.*		5,407,591
	350,200	NeuStar, Inc.*		10,677,598
	154,000	Research In Motion Ltd.*		10,165,540
				40,521,589
TOTAL COMMON STOCKS
(Cost $300,766,671)			$	315,346,222

Principal		Interest			Maturity
Amount		Rate			Date		Value
Repurchase Agreement(b) – 0.6%
Joint Repurchase Agreement Account II
$	1,900,000		4.29	%		01/03/2006	$	1,900,000
Maturity Value: $1,900,905
(Cost $1,900,000)
TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
(Cost $302,666,671)							$	317,246,222

Shares		Description	Value
Securities Lending Collateral – 1.5%
	4,660,750	Boston Global Investment Trust – Enhanced Portfolio	$	4,660,750
(Cost $4,660,750)
TOTAL INVESTMENTS – 102.0%
(Cost $307,327,421)			$	321,906,972

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

*	Non-income producing security.
(a)	All or a portion of security is on loan.
(b)	Joint repurchase agreement was entered into on December 30, 2005. Additional information appears on page 29.

Investment Abbreviation:
ADR	—	American Depository Receipt

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

20

GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND

Performance Summary

December 31, 2005

The following graph shows the value as of December 31, 2005, of a $10,000 investment made on April 3, 2000 (commencement of operations) in Class A Shares (with the maximum sales charge of 5.5%). For comparative purposes, the performance of the Fund’s benchmark (the Russell 3000 Index with dividends reinvested) is shown. This performance data represents past performance and should not be considered indicative of future performance, which will fluctuate with changes in market conditions. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. Performance reflects expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance of Class B, Class C, Institutional and Service Shares will vary from Class A Shares due to differences in fees and sales loads. In addition to the investment adviser’s decision regarding issuer/ industry investment selection and allocation, other factors may affect portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Structured Tax-Managed Equity Fund’s Lifetime Performance*

Performance of a $10,000 Investment, with dividends reinvested, from April 3, 2000 to December 31, 2005.

Average Annual Total Return through December 31, 2005	Since Inception		Five Years		One Year
Class A (Commenced April 3, 2000)
Excluding sales charges		0.81%		3.24%		8.77%
Including sales charges		-0.17%		2.08%		2.75%
Class B (Commenced April 3, 2000)
Excluding contingent deferred sales charges		0.08%		2.47%		7.96%
Including contingent deferred sales charges		-0.10%		2.10%		2.96%
Class C (Commenced April 3, 2000)
Excluding contingent deferred sales charges		0.05%		2.46%		7.97%
Including contingent deferred sales charges		0.05%		2.46%		6.97%
Institutional Class (Commenced April 3, 2000)		1.23%		3.67%		9.25%
Service Class (Commenced April 3, 2000)		0.74%		3.15%		8.70%

* Effective January 6, 2006, the CORE^SM Tax-Managed Equity Fund was renamed the Structured Tax-Managed Equity Fund.

21

GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND

Statement of Investments

December 31, 2005

Shares		Description	Value
Common Stocks – 99.3%
Aerospace & Defense – 3.5%
	29,500	Northrop Grumman Corp.	$	1,773,245
	30,200	Raytheon Co.		1,212,530
	29,400	The Boeing Co.		2,065,056
				5,050,831
Air Freight & Couriers – 0.2%
	3,600	United Parcel Service, Inc. Class B		270,540
Airlines – 0.1%
	7,000	SkyWest, Inc.		188,020
Banks – 4.9%
	77,542	Bank of America Corp.		3,578,563
	2,500	Corus Bankshares, Inc.		140,675
	11,300	Downey Financial Corp.		772,807
	5,000	Marshall & Ilsley Corp.		215,200
	3,900	U.S. Bancorp		116,571
	10,300	UnionBanCal Corp.		707,816
	26,300	Wachovia Corp.		1,390,218
				6,921,850
Beverages – 1.9%
	9,400	PepsiAmericas, Inc.		218,644
	63,100	The Coca-Cola Co.		2,543,561
				2,762,205
Biotechnology – 3.8%
	19,600	Alkermes, Inc.*		374,752
	25,740	Amgen, Inc.*		2,029,856
	16,700	Genentech, Inc.*		1,544,750
	12,500	Genzyme Corp.*		884,750
	10,300	Kos Pharmaceuticals, Inc.*		532,819
				5,366,927
Building Products – 0.3%
	3,300	USG Corp.*		214,500
	3,100	Watsco, Inc.		185,411
				399,911
Chemicals – 1.3%
	22,676	Monsanto Co.		1,758,070
	3,300	The Lubrizol Corp.		143,319
				1,901,389
Commercial Services & Supplies – 2.8%
	17,500	Administaff, Inc.		735,875
	10,300	Apollo Group, Inc.*		622,738
	19,800	Arbitron, Inc.		752,004
	5,700	CSG Systems International, Inc.*		127,224
	8,100	First Data Corp.		348,381
	12,600	FTI*		345,744
	16,800	Global Payments, Inc.		783,048
	1,885	PHH Corp.*		52,818
	28,400	Spherion Corp.*		284,284
				4,052,116
Communications Equipment – 3.2%
	100,400	Corning, Inc.*		1,973,864
	29,300	Emulex Corp.*		579,847
	22,900	Motorola, Inc.(a)		517,311
	22,550	QUALCOMM, Inc.		971,454
	50,900	Tellabs, Inc.*		554,810
				4,597,286
Computers & Peripherals – 4.0%
	89,158	Hewlett-Packard Co.		2,552,594
	23,200	Intergraph Corp.*		1,155,592
	14,900	Komag, Inc.*		516,434
	79,100	Western Digital Corp.*		1,472,051
				5,696,671
Construction & Engineering – 0.3%
	6,900	EMCOR Group, Inc.*		465,957
Construction Materials – 0.1%
	2,800	Florida Rock Industries, Inc.		137,368
Containers & Packaging – 0.1%
	2,100	Greif, Inc.		139,188
Diversified Financials – 9.4%
	3,700	Advanta Corp. Class B		120,028
	49,800	AmeriCredit Corp.*		1,276,374
	24,100	Ameritrade Holding Corp.*		578,400
	1,300	BlackRock, Inc.		141,024
	26,000	CIT Group, Inc.		1,346,280
	21,100	Citigroup, Inc.		1,023,983
	17,000	CompuCredit Corp.*		654,160
	30,200	Investment Technology Group, Inc.*		1,070,288
	56,800	J.P. Morgan Chase & Co.		2,254,392
	13,900	Merrill Lynch & Co., Inc.		941,447
	27,200	Moody’s Corp.		1,670,624
	5,400	Nasdaq Stock Market, Inc.*		189,972
	8,800	Principal Financial, Inc.		417,384
	30,200	SLM Corp.		1,663,718
				13,348,074
Diversified Telecommunication Services – 3.4%
	3,400	ALLTEL Corp.		214,540
	15,700	AT&T, Inc.		384,493
	18,700	CenturyTel, Inc.		620,092
	17,200	Liberty Global, Inc.*		387,000
	29,000	Sprint Nextel Corp.		677,440
	84,600	Verizon Communications, Inc.		2,548,152
				4,831,717
Electric Utilities – 2.5%
	4,300	Constellation Energy Group, Inc.		247,680
	31,900	Edison International		1,391,159
	16,000	Entergy Corp.		1,098,400
	21,700	PG&E Corp.		805,504
				3,542,743
Electrical Equipment – 0.1%
	1,300	Woodward Governor Co.		111,813

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

22

GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND

Shares		Description	Value
Common Stocks – (continued)
Electronic Equipment & Instruments – 0.4%
	8,800	Itron, Inc.*	$	352,352
	5,500	Teledyne Technologies, Inc.*		160,050
				512,402
Energy Equipment & Services – 1.0%
	20,300	Transocean, Inc.*		1,414,707
Food & Drug Retailing – 0.8%
	29,600	Longs Drug Stores Corp.		1,077,144
	9,500	Spartan Stores, Inc.*		98,990
				1,176,134
Food Products – 1.3%
	16,900	Archer-Daniels-Midland Co.		416,754
	6,900	Chiquita Brands International, Inc.		138,069
	15,400	Dean Foods Co.*		579,964
	10,900	Pilgrim’s Pride Corp.		361,444
	23,900	Tyson Foods, Inc.		408,690
				1,904,921
Healthcare Equipment & Supplies – 1.2%
	19,200	Applera Corp. – Applied Biosystems Group		509,952
	10,600	Becton, Dickinson and Co.		636,848
	3,100	Guidant Corp.		200,725
	15,500	Thoratec Corp.*		320,695
				1,668,220
Healthcare Providers & Services – 4.4%
	44,200	AmerisourceBergen Corp.		1,829,880
	21,300	Express Scripts, Inc.*		1,784,940
	2,800	McKesson Corp.		144,452
	40,830	UnitedHealth Group, Inc.		2,537,176
				6,296,448
Hotels, Restaurants & Leisure – 2.5%
	13,900	Choice Hotels International, Inc.		580,464
	28,800	Darden Restaurants, Inc.		1,119,744
	12,000	Domino’s Pizza, Inc.		290,400
	5,300	Papa John’s International, Inc.*		314,343
	22,200	Starbucks Corp.*		666,222
	11,000	Yum! Brands, Inc.		515,680
				3,486,853
Household Durables – 0.1%
	9,000	American Greetings Corp.		197,730
Household Products – 3.5%
	24,300	Colgate-Palmolive Co.		1,332,855
	63,720	Procter & Gamble Co.		3,688,114
				5,020,969
Industrial Conglomerates – 3.4%
	115,700	General Electric Co.		4,055,285
	8,600	Reynolds American, Inc.		819,838
				4,875,123
Insurance – 6.5%
	867	Alleghany Corp.*		246,228
	1,800	American National Insurance Co.		210,582
	19,400	Loews Corp.		1,840,090
	29,400	MBIA, Inc.		1,768,704
	37,000	MetLife, Inc.		1,813,000
	6,100	Nationwide Financial Services, Inc.		268,400
	22,200	Prudential Financial, Inc.		1,624,818
	2,300	Stewart Information Services Corp.		111,941
	14,000	The Chubb Corp.		1,367,100
				9,250,863
Internet & Catalog Retail – 0.3%
	14,700	Coldwater Creek, Inc.*		448,791
Internet Software & Services – 1.8%
	5,700	Google, Inc.*		2,364,702
	8,800	United Online, Inc.		125,136
				2,489,838
IT Consulting & Services – 0.3%
	8,400	Computer Sciences Corp.*		425,376
Machinery – 0.4%
	3,300	Applied Industrial Technologies, Inc.		111,177
	5,175	Graco, Inc.		188,784
	3,800	Reliance Steel & Aluminum Co.		232,256
				532,217
Marine – 0.3%
	7,800	Overseas Shipholding Group, Inc.		393,042
Media – 4.7%
	4,400	Hearst-Argyle Television, Inc.		104,940
	20,800	Liberty Global, Inc. Series C*		440,960
	144,700	Time Warner, Inc.		2,523,568
	49,700	Univision Communications, Inc.*		1,460,683
	66,500	Viacom, Inc. Class B		2,167,900
				6,698,051
Metals & Mining – 0.3%
	7,100	Southern Copper Corp.		475,558
Multiline Retail – 0.4%
	5,600	Dillard’s, Inc.		138,992
	7,400	J. C. Penney Co., Inc.		411,440
				550,432
Oil & Gas – 7.2%
	2,100	Anadarko Petroleum Corp.		198,975
	16,560	ConocoPhillips		963,461
	6,300	Devon Energy Corp.		394,002
	13,400	Equitable Resources, Inc.		491,646
	34,300	Exxon Mobil Corp.		1,926,631
	1,225	Kerr-McGee Corp.		111,303
	17,600	Occidental Petroleum Corp.		1,405,888
	23,600	Sunoco, Inc.		1,849,768
	5,200	Swift Energy Co.*		234,364

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

23

GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND

Statement of Investments (continued)

December 31, 2005

Shares		Description	Value
Common Stocks – (continued)
Oil & Gas – (continued)
	22,300	Tesoro Petroleum Corp.	$	1,372,565
	25,600	Valero Energy Corp.		1,320,960
				10,269,563
Pharmaceuticals – 5.1%
	13,300	Allergan, Inc.		1,435,868
	7,200	Endo Pharmaceuticals Holdings, Inc.*		217,872
	53,300	Johnson & Johnson		3,203,330
	72,200	Merck & Co., Inc.		2,296,682
	6,000	Pfizer, Inc.		139,920
				7,293,672
Real Estate – 0.8%
	2,371	Brookfield Homes Corp.		117,910
	7,500	New Century Financial Corp. (REIT)		270,525
	3,900	Plum Creek Timber Co., Inc. (REIT)		140,595
	13,100	ProLogis (REIT)		612,032
				1,141,062
Road & Rail – 0.3%
	3,800	Dollar Thrifty Automotive Group, Inc.*		137,066
	6,600	GATX Corp.		238,128
				375,194
Semiconductor Equipment & Products – 3.7%
	24,400	Advanced Micro Devices, Inc.*		746,640
	51,800	Freescale Semiconductor, Inc.*		1,304,842
	9,081	Freescale Semiconductor, Inc. Class B*		228,569
	24,400	Intel Corp.		609,024
	10,400	MPS Group, Inc.*		142,168
	69,200	Texas Instruments, Inc.		2,219,244
				5,250,487
Software – 2.8%
	32,800	Autodesk, Inc.		1,408,760
	25,300	Cadence Design Systems, Inc.*		428,076
	20,100	Computer Associates International, Inc.		566,619
	30,100	Microsoft Corp.		787,115
	13,000	Symantec Corp.*		227,500
	28,900	Synopsys, Inc.*		579,734
				3,997,804
Specialty Retail – 3.4%
	32,200	AutoNation, Inc.*		699,706
	69,642	Circuit City Stores, Inc.		1,573,213
	15,800	Office Depot, Inc.*		496,120
	17,100	Payless ShoeSource, Inc.*		429,210
	32,700	Sonic Automotive, Inc.		728,556
	37,100	United Rentals, Inc.*		867,769
				4,794,574
Textiles & Apparel – 0.3%
	4,400	Carter’s, Inc.*		258,940
	4,400	Guess?, Inc.*		156,640
				415,580
Wireless Telecommunication Services – 0.2%
	1,900	Telephone & Data Systems, Inc. Special Shares		65,759
	3,300	United States Cellular Corp.*		163,020
				228,779
TOTAL COMMON STOCKS
(Cost $110,062,057)			$	141,368,996

Principal		Interest			Maturity
Amount		Rate			Date		Value
Repurchase Agreement(b) — 0.2%
Joint Repurchase Agreement Account II
$	300,000		4.29	%		01/03/2006	$	300,000
Maturity Value: $300,143
(Cost $300,000)
TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
(Cost $110,362,057)							$	141,668,996

Shares		Description	Value
Securities Lending Collateral – 0.2%
	317,250	Boston Global Investment Trust – Enhanced Portfolio	$	317,250
(Cost $317,250)
TOTAL INVESTMENTS – 99.7%
(Cost $110,679,307)			$	141,986,246

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

*	Non-income producing security.
(a)	All or a portion of security is on loan.
(b)	Joint repurchase agreement was entered into on December 30, 2005. Additional information appears on page 29.

Investment Abbreviation:
REIT	—	Real Estate Investment Trust

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

24

GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At December 31, 2005, the following futures contracts were open as follows:

	Number of		Settlement	Market		Unrealized
Type	Contracts Long		Month	Value		Loss
S&P 500 Index		14	March 2006	$	878,360	$	(12,793	)

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

25

GOLDMAN SACHS REAL ESTATE SECURITIES FUND

Performance Summary

December 31, 2005

The following graph shows the value as of December 31, 2005, of a $10,000 investment made on July 27, 1998 (commencement of operations) in Class A shares (with the maximum sales charge of 5.5%). For comparative purposes, the performance of the Fund’s benchmark (the Wilshire Real Estate Securities Index with dividends reinvested) is shown. This performance data represents past performance and should not be considered indicative of future performance, which will fluctuate with changes in market conditions. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. Performance reflects expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Performance of Class B, Class C, Institutional and Service Shares will vary from Class A Shares due to differences in fees and sales loads. In addition to the investment adviser’s decision regarding issuer/industry investment selection and allocation, other factors may affect portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Real Estate Securities Fund’s Lifetime Performance

Performance of a $10,000 Investment, with dividends reinvested, from July 27, 1998 to December 31, 2005.

Average Annual Total Return through December 31, 2005	Since Inception		Five Years		One Year
Class A (Commenced July 27, 1998)
Excluding sales charges		15.00%		18.30%		12.83%
Including sales charges		14.13%		16.97%		6.61%
Class B (Commenced July 27, 1998)
Excluding contingent deferred sales charges		14.16%		17.43%		12.03%
Including contingent deferred sales charges		14.16%		17.14%		6.66%
Class C (Commenced July 27, 1998)
Excluding contingent deferred sales charges		14.19%		17.46%		12.03%
Including contingent deferred sales charges		14.19%		17.46%		10.96%
Institutional Class (Commenced July 27, 1998)		15.46%		18.77%		13.30%
Service Class (Commenced July 27, 1998)		14.96%		18.25%		12.76%

26

GOLDMAN SACHS REAL ESTATE SECURITIES FUND

Statement of Investments

December 31, 2005

Shares		Description	Value
Common Stocks – 97.3%
Diversified – 8.9%
	257,572	Duke Realty Corp. (REIT)	$	8,602,905
	396,411	Liberty Property Trust (REIT)(a)		16,986,211
	435,357	Vornado Realty Trust (REIT)		36,339,249
				61,928,365
Health Care – 0.5%
	222,313	Cogdell Spencer, Inc.		3,754,866
Hotels – 13.4%
	312,323	Hilton Hotels Corp.		7,530,107
	1,476,003	Host Marriott Corp. (REIT)(a)		27,970,257
	224,144	Innkeepers USA Trust (REIT)		3,586,304
	382,381	Interstate Hotels & Resorts, Inc. (REIT)*		1,671,005
	205,755	LaSalle Hotel Properties (REIT)		7,555,324
	710,574	Starwood Hotels & Resorts Worldwide, Inc.		45,377,256
				93,690,253
Industrial – 11.1%
	462,107	AMB Property Corp. (REIT)		22,721,801
	147,157	CenterPoint Properties Trust (REIT)		7,281,328
	860,535	ProLogis (REIT)		40,204,195
	143,264	PS Business Parks, Inc. (REIT)		7,048,589
				77,255,913
Office – 20.7%
	134,259	Alexandria Real Estate Equities, Inc. (REIT)		10,807,849
	376,281	Boston Properties, Inc. (REIT)		27,893,711
	566,685	Brandywine Realty Trust (REIT)		15,816,178
	709,473	Brookfield Properties Corp.		20,872,696
	514,241	Equity Office Properties Trust (REIT)		15,596,930
	162,076	Maguire Properties, Inc. (REIT)		5,008,148
	159,112	Parkway Properties, Inc. (REIT)		6,386,756
	172,790	Prentiss Properties Trust (REIT)		7,029,097
	206,879	SL Green Realty Corp. (REIT)		15,803,487
	853,838	Trizec Properties, Inc. (REIT)		19,569,967
				144,784,819
Other REITs – 2.3%
	216,885	Gramercy Capital Corp. (REIT)		4,940,640
	187,443	iStar Financial, Inc. (REIT)		6,682,343
	419,320	Spirit Finance Corp. (REIT)		4,759,282
				16,382,265
Regional Malls – 13.3%
	183,784	CBL & Associates Properties, Inc. (REIT)		7,261,306
	706,466	General Growth Properties, Inc. (REIT)		33,196,838
	624,729	Simon Property Group, Inc. (REIT)		47,872,983
	102,361	The Mills Corp. (REIT)		4,293,020
				92,624,147
Residential – 13.7%
	315,759	Archstone-Smith Trust (REIT)		13,227,145
	230,481	AvalonBay Communities, Inc. (REIT)		20,570,429
	119,280	BRE Properties, Inc. (REIT)		5,424,854
	179,007	Camden Property Trust (REIT)		10,368,085
	649,278	Equity Residential Properties Trust (REIT)		25,399,755
	72,908	Essex Property Trust, Inc. (REIT)		6,722,118
	590,027	United Dominion Realty Trust, Inc. (REIT)		13,830,233
				95,542,619
Self Storage – 1.4%
	40,219	Public Storage, Inc. (REIT)		2,723,631
	319,899	U-Store-It Trust (REIT)		6,733,874
				9,457,505
Shopping Centers – 12.0%
	338,091	Developers Diversified Realty Corp. (REIT)		15,897,039
	874,994	Kimco Realty Corp. (REIT)		28,069,808
	436,921	Kite Realty Group Trust (REIT)		6,759,168
	51,148	Pan Pacific Retail Properties, Inc. (REIT)		3,421,290
	268,530	Regency Centers Corp. (REIT)		15,829,843
	365,899	Weingarten Realty Investors (REIT)		13,834,641
				83,811,789
TOTAL COMMON STOCKS
(Cost $469,377,221)			$	679,232,541

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

27

GOLDMAN SACHS REAL ESTATE SECURITIES FUND

Statement of Investments (continued)

December 31, 2005

Principal		Interest			Maturity
Amount		Rate			Date		Value
Repurchase Agreement(b) – 2.3%
Joint Repurchase Agreement Account II
$	15,800,000		4.29	%		01/03/2006	$	15,800,000
Maturity Value: $15,807,526
(Cost $15,800,000)
TOTAL INVESTMENTS BEFORE SECURITIES LENDING COLLATERAL
(Cost $485,177,221)							$	695,032,541

Shares		Description	Value
Securities Lending Collateral – 3.4%
	23,592,000	Boston Global Investment Trust – Enhanced Portfolio	$	23,592,000
(Cost $23,592,000)
TOTAL INVESTMENTS – 103.0%
(Cost $508,769,221)			$	718,624,541

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

*	Non-income producing security.
(a)	All or a portion of security is on loan.
(b)	Joint repurchase agreement was entered into on December 30, 2005. Additional information appears on page 29.

Investment Abbreviation:
REIT	—	Real Estate Investment Trust

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

28

GOLDMAN SACHS SPECIALTY FUNDS

ADDITIONAL INVESTMENT INFORMATION

JOINT REPURCHASE AGREEMENT ACCOUNT II — At December 31, 2005, the Funds had undivided interests in the Joint Repurchase Agreement Account II, as follows:

Fund	Principal Amount
Tollkeeper	$	1,900,000
Structured Tax-Managed Equity		300,000
Real Estate Securities		15,800,000

	Principal		Interest			Maturity	Maturity
Repurchase Agreements	Amount		Rate			Date	Value
Banc of America Securities LLC	$	3,020,000,000		4.30	%	01/03/2006	$	3,021,442,889
Barclays Capital PLC		2,260,000,000		4.30		01/03/2006		2,261,079,778
Greenwich Capital Markets		300,000,000		4.33		01/03/2006		300,144,333
J.P. Morgan Securities, Inc.		400,000,000		4.30		01/03/2006		400,191,111
Morgan Stanley & Co.		3,140,000,000		4.27		01/03/2006		3,141,489,756
UBS Securities LLC		600,000,000		4.18		01/03/2006		600,278,667
UBS Securities LLC		2,565,000,000		4.30		01/03/2006		2,566,225,500
TOTAL	$	12,285,000,000					$	12,290,852,034

At December 31, 2005, the Joint Repurchase Agreement Account II was fully collateralized by the following securities: Federal Home Loan Bank, 3.50% to 4.40%, due 02/24/2006 to 01/18/2007; Federal Home Loan Mortgage Association, 0.00% to 13.00%, due 01/01/2006 to 01/01/2036; Federal National Mortgage Association, 0.00% to 15.50%, due 02/01/2006 to 01/01/2036; Government National Mortgage Association, 4.50% to 6.50%, due 11/15/2013 to 12/15/2035 and Tennessee Valley Authority, 4.75% to 7.14%, due 11/13/2008 to 08/01/2013. The aggregate market value of the collateral, including accrued interest, was $12,560,093,631.

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

29

GOLDMAN SACHS SPECIALTY FUNDS

Statements of Assets and Liabilities

December 31, 2005

					Structured
		Tollkeeper			Tax-Managed			Real Estate
		Fund			Equity Fund			Securities Fund
Assets:
Investment in securities, at value (identified cost $302,666,671, $110,362,057 and $485,177,221, respectively)— including $4,563,010, $304,965 and $23,040,700 of securities on loan, respectively		$	317,246,222		$	141,668,996		$	695,032,541
Securities lending collateral, at value (cost $4,660,750, $317,250 and $23,592,000)			4,660,750			317,250			23,592,000
Cash(a)			36,534			647,693			152,815
Receivables:
	Fund shares sold		330,086			402,099			4,215,125
	Dividends and interest		66,312			195,854			3,563,579
	Investment securities sold, at value		3,258,456			—			—
	Reimbursement from adviser		—			66,010			124,641
	Securities lending income		1,761			521			12,309
Total assets			325,600,121			143,298,423			726,693,010
Liabilities:
Payables:
	Payable upon return of securities loaned		4,660,750			317,250			23,592,000
	Investment securities purchased, at value		2,448,038			—			2,571,951
	Fund shares repurchased		2,091,202			258,407			1,999,933
	Amounts owed to affiliates		584,033			161,481			750,801
	Variation margin		—			3,710			—
Accrued expenses			125,681			131,022			150,844
Total liabilities			9,909,704			871,870			29,065,529
Net Assets:
Paid-in capital			1,699,594,134			153,624,781			485,827,207
Accumulated undistributed net investment income			25,763			21,088			832,157
Accumulated net realized gain (loss) on investment and futures transactions			(1,398,509,031	)		(42,513,462	)		1,112,797
Net unrealized gain on investments and futures			14,579,551			31,294,146			209,855,320
NET ASSETS		$	315,690,417		$	142,426,553		$	697,627,481
Net Assets:
	Class A	$	125,717,568		$	76,267,355		$	301,360,277
	Class B		120,414,706			25,218,195			21,597,261
	Class C		60,638,550			22,686,579			20,019,955
	Institutional		8,819,239			17,843,296			348,871,924
	Service		100,354			411,128			5,778,064
Shares Outstanding:
	Class A		15,681,382			7,337,905			16,702,097
	Class B		15,746,075			2,510,587			1,192,892
	Class C		7,935,661			2,264,031			1,114,918
	Institutional		1,072,036			1,690,219			19,274,216
	Service		12,563			39,664			318,738
Total shares of beneficial interest outstanding, $0.001 par value (unlimited shares authorized)			40,447,717			13,842,406			38,602,861
Net asset value, offering and redemption price per share:(b)
	Class A		$8.02			$10.39			$18.04
	Class B		7.65			10.04			18.10
	Class C		7.64			10.02			17.96
	Institutional		8.23			10.56			18.10
	Service		7.99			10.37			18.13

(a)

Includes restricted cash of $572,000 for the Structured Tax-Managed Equity Fund relating to initial margin requirements on futures transactions.

(b)

Maximum public offering price per share (NAV per share multiplied by 1.0582) for Class A Shares of the Tollkeeper, Structured Tax-Managed Equity and Real Estate Securities Funds is $8.49, $10.99 and $19.09, respectively. At redemption, Class B and Class C Shares may be subject to a contingent deferred sales charge, assessed on the amount equal to the lesser of the current net asset value or the original purchase price of the shares.

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

30

GOLDMAN SACHS SPECIALTY FUNDS

Statements of Operations

For the Year Ended December 31, 2005

					Structured
		Tollkeeper			Tax-Managed			Real Estate
		Fund			Equity Fund			Securities Fund
Investment income:
Dividends(a)		$	1,187,824		$	1,632,793		$	17,185,540
Interest (including securities lending income of $31,559, $15,748 and $52,103, respectively)			203,328			83,336			586,311
Total income			1,391,152			1,716,129			17,771,851
Expenses:
Management fees			3,477,008			749,816			6,143,623
Distribution and Service fees(b)			2,379,302			596,084			1,112,984
Transfer agent fees(b)			645,815			187,997			727,010
Custody and accounting fees			112,457			115,267			145,839
Registration fees			73,115			87,094			170,736
Printing fees			90,549			91,813			120,799
Professional fees			48,265			46,917			51,436
Trustee fees			16,492			16,492			16,492
Service share fees			575			2,536			21,259
Other			90,901			52,990			70,591
Total expenses			6,934,479			1,947,006			8,580,769
Less — expense reductions			(211,656	)		(369,759	)		(553,501	)
Net expenses			6,722,823			1,577,247			8,027,268
NET INVESTMENT INCOME (LOSS)			(5,331,671	)		138,882			9,744,583
Realized and unrealized gain (loss) on investment and futures transactions:
Net realized gain from:
	Investment transactions (including commissions recaptured of $80,036, $0 and $0,   respectively)		34,310,169			2,496,031			32,087,872
	Futures transactions		—			148,095			—
Payments by affiliates to reimburse certain security claims			—			5,987			—
Net change in unrealized gain (loss) on:
	Investments		(27,520,784	)		6,290,949			37,370,852
	Futures		—			(13,915	)		—
Net realized and unrealized gain on investment and futures transactions			6,789,385			8,927,147			69,458,724
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		$	1,457,714		$	9,066,029		$	79,203,307

(a)	For the Real Estate Securities Fund, foreign taxes withheld on dividends were $66,178.
(b)	Class specific Distribution and Service and Transfer agent fees were as follows:

	Distribution and Service Fees						Transfer agent Fees
	Class A		Class B		Class C		Class A		Class B		Class C		Institutional		Service
Fund
Tollkeeper	$	332,975	$	1,374,818	$	671,509	$	253,061	$	261,216	$	127,587	$	3,905	$	46
Structured Tax-Managed Equity		125,740		252,993		217,351		95,562		48,069		41,297		2,866		203
Real Estate Securities		698,483		226,953		187,548		530,847		43,121		35,634		115,707		1,701

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

31

GOLDMAN SACHS SPECIALTY FUNDS

Statements of Changes in Net Assets

		Tollkeeper Fund
		For the			For the
		Year Ended			Year Ended
		December 31, 2005			December 31, 2004
From operations:
Net investment income (loss)		$	(5,331,671	)	$	(4,216,311	)
Net realized gain on investment and futures transactions			34,310,169			5,304,459
Payments by affiliates to reimburse certain security claims			—			—
Net change in unrealized gain (loss) on investments and futures			(27,520,784	)		44,273,362
Net increase in net assets resulting from operations			1,457,714			45,361,510
Distributions to shareholders:
From net investment income
	Class A Shares		—			—
	Class B Shares		—			—
	Class C Shares		—			—
	Institutional Shares		—			—
	Service Shares		—			—
From net realized gains:
	Class A Shares		—			—
	Class B Shares		—			—
	Class C Shares		—			—
	Institutional Shares		—			—
	Service Shares		—			—
Total distributions to shareholders			—			—
From share transactions:
Proceeds from sales of shares			29,251,261			33,998,390
Reinvestment of dividends and distributions			—			—
Cost of shares repurchased			(127,253,551	)		(157,851,288	)
Net increase (decrease) in net assets resulting from share transactions			(98,002,290	)		(123,852,898	)
NET INCREASE (DECREASE)			(96,544,576	)		(78,491,388	)
Net assets:
Beginning of year			412,234,993			490,726,381
End of year		$	315,690,417		$	412,234,993
Accumulated undistributed net investment income		$	25,763		$	91,188

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

32

GOLDMAN SACHS SPECIALTY FUNDS

Structured Tax-Managed Equity Fund						Real Estate Securities Fund
For the			For the			For the			For the
Year Ended			Year Ended			Year Ended			Year Ended
December 31, 2005			December 31, 2004			December 31, 2005			December 31, 2004
$	138,882		$	204,580		$	9,744,583		$	8,645,265
	2,644,126			11,806,215			32,087,872			43,323,320
	5,987			—			—			—
	6,277,034			2,939,877			37,370,852			82,499,160
	9,066,029			14,950,672			79,203,307			134,467,745
	(58,662	)		(169,561	)		(5,422,554	)		(4,852,231	)
	—			—			(268,940	)		(338,690	)
	—			—			(228,774	)		(250,233	)
	(59,132	)		(33,549	)		(6,829,368	)		(4,545,880	)
	—			(830	)		(80,949	)		(23,086	)
	—			—			(17,327,418	)		(15,772,480	)
	—			—			(1,269,974	)		(1,382,252	)
	—			—			(1,156,212	)		(1,047,981	)
	—			—			(19,326,686	)		(13,057,228	)
	—			—			(325,342	)		(134,542	)
	(117,794	)		(203,940	)		(52,236,217	)		(41,404,603	)
	57,795,919			11,521,289			272,656,738			226,262,842
	77,567			165,474			46,281,094			35,553,925
	(19,086,548	)		(20,597,534	)		(204,033,747	)		(147,265,494	)
	38,786,938			(8,910,771	)		114,904,085			114,551,273
	47,735,173			5,835,961			141,871,175			207,614,415
	94,691,380			88,855,419			555,756,306			348,141,891
$	142,426,553		$	94,691,380		$	697,627,481		$	555,756,306
$	21,088		$	—		$	832,157		$	548,335

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

33

GOLDMAN SACHS SPECIALTY FUNDS

Notes to Financial Statements

December 31, 2005

1. ORGANIZATION

Goldman Sachs Trust (the “Trust”) is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended, (the “Act”) as an open-end management investment company. The Trust includes the Goldman Sachs Tollkeeper Fund (“Tollkeeper”), Goldman Sachs Structured Tax-Managed Equity Fund (“Structured Tax-Managed Equity”) (formerly Goldman Sachs CORE^SM Tax-Managed Equity Fund) and Goldman Sachs Real Estate Securities Fund (“Real Estate Securities”) collectively, the “Funds” or individually a “Fund”. Each Fund is a diversified portfolio offering five classes of shares — Class A, Class B, Class C, Institutional and Service. Class A shares of the Funds are sold with front-end sales charge of up to 5.50%. Class B shares of the Funds are sold with a contingent deferred sales charge that declines from 5.00% to zero, depending upon the period of time the shares are held. Class C shares of the Funds are sold with a contingent deferred sales charge of 1% during the first 12 months. Institutional and Service Class shares of the Funds are not subject to a sales charge. Such sales loads are paid directly to Goldman Sachs & Co. (“Goldman Sachs”) as distributor of the Funds.

     The Real Estate Securities Fund invests primarily in securities of issuers that are engaged in or related to the real estate industry and has a policy of concentrating its investments in the real estate industry. Therefore, an investment in the Fund is subject to certain risks associated with the direct ownership of real estate and with the real estate industry in general. Such risks include, but are not limited to, declines in property values; increase in property taxes, operating expenses, interest rates or competition; zoning changes; and losses from casualty and condemnation.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of the significant accounting policies consistently followed by the Funds. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that may affect the reported amounts. Actual results could differ from those estimates.

A. Investment Valuation — Investments in equity securities and investment companies traded on a U.S. securities exchange or the NASDAQ system are valued daily at their last sale price or official closing price on the principal exchange or system on which they are traded. If no sale occurs, such securities are valued at the last bid price. Debt securities are valued at prices supplied by independent pricing services, broker/dealer-supplied valuations or matrix pricing systems. Unlisted equity securities for which market quotations are available are valued at the last sale price on valuation date, or if no sale occurs, at the last bid price. Investments in investment companies (other than those that are exchange traded) are valued at the net asset value per share on the valuation date. Short-term debt obligations maturing in sixty days or less are valued at amortized cost, which approximates market value. Securities for which quotations are not readily available or are deemed not to reflect market value by the investment adviser are valued at fair value using methods approved by the Trust’s Board of Trustees.

B. Security Transactions and Investment Income — Security transactions are reflected as of the trade date. Realized gains and losses on sales of portfolio securities are calculated using the identified cost basis. Dividend income is recorded on the ex-dividend date, net of foreign withholding taxes, if any, which are reduced by any amounts reclaimable by the Funds, where applicable. Interest income is recorded on the basis of interest accrued, premium amortized and discount accreted.

     Net investment income (other than class specific expenses) and unrealized and realized gains or losses are allocated daily to each class of shares of the respective Fund based upon the relative proportion of net assets of each class.

C. Expenses — Expenses incurred by the Trust that do not specifically relate to an individual Fund of the Trust are allocated to the Funds on a straight-line or pro-rata basis depending upon the nature of the expense.

     Class A, Class B and Class C shareholders of the Funds bear all expenses and fees relating to their respective Distribution and Service Plans. Service Shares bear all expenses and fees relating to their Service and Shareholder Administration Plans. Each class of shares of the Funds separately bears its respective class-specific Transfer Agency fees.

D. Federal Taxes — It is each Fund’s policy to comply with the requirements of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute each year substantially all of its investment company taxable

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2. SIGNIFICANT ACCOUNTING POLICIES (continued)

income and capital gains to its shareholders. Accordingly, no federal tax provisions are required. Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions, if any, are declared and paid annually for the Tollkeeper and Structured Tax-Managed Equity Funds and quarterly for the Real Estate Securities Fund. Capital gains distributions, if any, are declared and paid annually for all Funds.

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

     In addition, distributions paid by the Structured Tax-Managed Equity and the Real Estate Securities Funds’ investments in real estate investment trusts (“REITs”) often include a “return of capital” which is recorded by the Funds as a reduction of the cost basis of the securities held. The Code requires a REIT to distribute at least 95% of its taxable income to investors. In many cases, however, because of “non-cash” expenses such as property depreciation, a REIT’s cash flow will exceed its taxable income. The REIT may distribute this excess cash to offer a more competitive yield. This portion of the Funds’ distributions are deemed a return of capital and is generally not taxable to shareholders.

E. Repurchase Agreements — Repurchase agreements involve the purchase of securities subject to the seller’s agreement to repurchase them at a mutually agreed upon date and price. During the term of a repurchase agreement, the value of the underlying securities held as collateral on behalf of the Funds, including accrued interest, is required to exceed the value of the repurchase agreement, including accrued interest. If the seller defaults or becomes insolvent, realization of the collateral by the Funds may be delayed or limited and there may be a decline in the value of the collateral during the period while the Funds seek to assert their rights. The underlying securities for all repurchase agreements are held in safekeeping at the Funds’ custodian or designated subcustodians under triparty repurchase agreements.

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

F. Segregation Transactions — As set forth in the prospectus, the Funds may enter into certain derivative transactions to seek to increase total return. Forward foreign currency exchange contracts, futures contracts, written options, mortgage dollar rolls, when-issued securities and forward commitments represent examples of such transactions. As a result of entering into these transactions, the Funds are required to segregate liquid assets, on the books of their custodian, with a current value equal to or greater than the market value of the corresponding transactions.

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

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

H. Commission Recapture — The Tollkeeper Fund may direct portfolio trades, subject to obtaining best price and execution, to various brokers who have agreed to rebate a portion of the commissions generated. Such rebates are made

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GOLDMAN SACHS SPECIALTY FUNDS

Notes to Financial Statements (continued)

December 31, 2005

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

directly to the Tollkeeper Fund as cash payments and are included in the net realized gain (loss) on investments in the Statements of Operations.

3. AGREEMENTS

GSAM, an affiliate of Goldman, Sachs & Co., serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Funds. Under the Agreement, GSAM manages the Funds, subject to the general supervision of the Trust’s Board of Trustees.

     As compensation for the services rendered pursuant to the Agreement, the assumption of the expenses related thereto and administering the Funds’ business affairs, including providing facilities, GSAM is entitled to a fee (“Management fee”) computed daily and payable monthly, equal to an annual percentage rate of each Fund’s average daily net assets.

     Effective April 29, 2005, GSAM reduced the contractual Management fee for the Structured Tax-Managed Equity Fund from 0.75% of the Fund’s average daily net assets to the contractual annual rate of 0.70%. Prior to April 29, 2005, GSAM had voluntarily waived a portion of its Management fee for the Structured Tax-Managed Equity Fund equal to 0.05% of the Fund’s average daily net assets.

     At a meeting held on June 16, 2005, the Board of Trustees of the Trust approved a fee reduction commitment for the Funds which will be effective on a contractual basis in 2006. Effective July 1, 2005, GSAM implemented the fee reduction commitment on a voluntary basis which results in the following annual Management fee rates.

	Management Fee			Average Daily
Fund	Annual Rate			Net Assets
Tollkeeper		1.00	%	First $1 Billion
		0.90		Next $1 Billion
		0.86		Over $2 Billion
Structured Tax-Managed Equity		0.70		First $1 Billion
		0.63		Next $1 Billion
		0.60		Over $2 Billion
Real Estate Securities		1.00		First $1 Billion
		0.90		Next $1 Billion
		0.86		Over $2 Billion

     Prior to July 1, 2005, the Funds’ Management fees as an annual percentage rate of average daily net assets were as follows:

Fund	Management Fee
Tollkeeper		1.00	%
Structured Tax-Managed Equity*		0.70
Real Estate Securities		1.00

*  Prior to April 29, 2005, the Fund’s contractual management fee was 0.75% of the Fund’s average daily net assets.

     GSAM has voluntarily agreed to limit certain “Other Expenses” of the Funds (excluding Management fees, Distribution and Service fees, Transfer Agency fees and expenses, and Service Share fees, taxes, interest, brokerage fees and litigation, indemnification, shareholder meeting and other extraordinary expenses exclusive of any expense offset arrangements) to the extent that such expenses exceed, on an annual basis, a percentage rate of the average daily net assets of each Fund. Such expense reimbursements, if any, are computed daily and paid monthly. In addition, the Funds are not obligated to reimburse GSAM for prior fiscal year expense reimbursements, if any.

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GOLDMAN SACHS SPECIALTY FUNDS

3. AGREEMENTS (continued)

     For the year ended December 31, 2005, the Other Expense limitations for the Tollkeeper, Structured Tax-Managed Equity and the Real Estate Securities Funds as an annual percentage rate of average daily net assets were 0.064%, 0.054% and 0.004%, respectively.

     The Trust, on behalf of each Fund, has adopted Distribution and Service Plans (the “Plans”). Under the Plans, Goldman Sachs and/or authorized dealers are entitled to a monthly fee for distribution services equal to, on an annual basis, 0.25%, 0.75% and 0.75% of the Funds’ average daily net assets attributable to Class A, Class B and Class C Shares, respectively. Additionally, Goldman Sachs and/or authorized dealers are entitled to receive under the Plans a separate fee for personal and account maintenance services equal to, on an annual basis, 0.25% of each Fund’s average daily net assets attributable to Class B and Class C Shares.

     Goldman Sachs serves as Distributor of shares of the Funds pursuant to a Distribution Agreement. Goldman Sachs may retain a portion of the Class A sales load and Class B and Class C contingent deferred sales charges. During the year ended December 31, 2005, Goldman Sachs advised the Funds that it retained the following approximate amounts:

			Contingent Deferred
	Sales Load		Sales Charge
Fund	Class A		Class B		Class C
Tollkeeper	$	15,500	$	1,600	$	200
Structured Tax-Managed Equity		36,500		100		—
Real Estate Securities		86,200		200		200

     Goldman Sachs also serves as the Transfer Agent of the Funds for a fee. The fees charged for such transfer agency services are calculated daily and payable monthly at an annual rate as follows: 0.19% of the average daily net assets for Class A, Class B and Class C Shares and 0.04% of the average daily net assets for Institutional and Service Shares.

     The Trust, on behalf of each Fund, has adopted a Service Plan and Shareholder Administration Plan for Service Shares. These plans allow for Service Shares to compensate service organizations for providing varying levels of personal and account administration and shareholder administration services to their customers who are beneficial owners of such shares. The Service Plan and Shareholder Administration Plan provide for compensation to the service organizations in an amount equal to, on an annualized basis, 0.25% and 0.25%, respectively, of the average daily net assets of the Service Shares.

     For the year ended December 31, 2005, GSAM has voluntarily agreed to waive certain fees and reimburse other expenses. In addition, the Funds have entered into certain offset arrangements with the custodian resulting in a reduction in the Funds’ expenses. These expense reductions were as follows (in thousands):

	Management		Other Expense		Custody		Total Expense
Fund	Fee Waiver		Reimbursement		Fee Reduction		Reductions
Tollkeeper	$	—	$	209	$	3	$	212
Structured Tax-Managed Equity		15		354		1		370
Real Estate Securities		—		552		2		554

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GOLDMAN SACHS SPECIALTY FUNDS

Notes to Financial Statements (continued)

December 31, 2005

3. AGREEMENTS (continued)

     At December 31, 2005, the amounts owed to affiliates were as follows (in thousands):

							Over Reimbursement
	Management		Distribution and		Transfer		of “Other
Fund	Fees		Service Fees		Agent Fees		Expense”		Total
Tollkeeper	$	281	$	190	$	52	$	61	$	584
Structured Tax-Managed Equity		84		57		20		—		161
Real Estate Securities		584		100		67		—		751

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long-term securities for the year ended December 31, 2005 were as follows:

Fund	Purchases		Sales and Maturities
Tollkeeper	$	165,440,955	$	268,836,294
Structured Tax-Managed Equity		136,306,720		96,775,385
Real Estate Securities		191,548,686		112,320,091

     For the year ended December 31, 2005, Goldman Sachs earned approximately $11,100, $17,300 and $15,600 of brokerage commissions from portfolio transactions, including futures transactions, executed on behalf of the Tollkeeper, Structured Tax-Managed Equity and Real Estate Securities Funds, respectively.

     During the year ended December 31, 2005, GSAM voluntarily agreed to reimburse the Structured Tax-Managed Equity Fund $5,987 for certain class action settlements in which the Fund was eligible to participate.

5. SECURITIES LENDING

Pursuant to exemptive relief granted by the SEC and the terms and conditions contained therein, the Funds may lend their securities through a securities lending agent, Boston Global Advisers (“BGA”), a wholly-owned subsidiary of Goldman Sachs, to certain qualified borrowers including Goldman Sachs and affiliates. In accordance with the Funds’ security lending procedures, the loans are collateralized at all times with cash and/or securities with a market value at least equal to the securities on loan. As with other extensions of credit, the Funds bear the risk of delay on recovery or loss of rights in the collateral should the borrower of the securities fail financially.

     Both the Funds and BGA receive compensation relating to the lending of the Funds’ securities. The amounts earned by the Funds for the year ended December 31, 2005, are reported parenthetically on the Statements of Operations. The Funds invest the cash collateral received in connection with securities lending transactions in the Enhanced Portfolio of Boston Global Investment Trust, a Delaware statutory trust. The Enhanced Portfolio is exempt from registration under Section 3(c)(7) of the Act and is managed by GSAM, for which GSAM receives an investment advisory fee of up to 0.10% of the average daily net assets of the Enhanced Portfolio. The Enhanced Portfolio invests in high quality money market instruments. The Funds bear the risk of incurring a loss from the investment of cash collateral due to either credit or market factors.

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GOLDMAN SACHS SPECIALTY FUNDS

5. SECURITIES LENDING (continued)

     The table below details securities lending activity as of, and for the year ended, December 31, 2005:

							Earnings Received
					Earnings of BGA		by the Funds
			Cash Collateral		Relating to Securities		From Lending to
	Market Value of		Received for Loans		Loaned for the		Goldman Sachs for
	Securities on Loan as of		Outstanding as of		Year Ended		the Year Ended
Fund	December 31, 2005		December 31, 2005		December 31, 2005		December 31, 2005
Tollkeeper	$	4,563,010	$	4,660,750	$	5,569	$	1,429
Structured Tax-Managed Equity		304,965		317,250		2,779		—
Real Estate Securities		23,040,700		23,592,000		9,195		—

6. LINE OF CREDIT FACILITY

The Funds participate in a $350,000,000 committed, unsecured revolving line of credit facility together with other registered investment companies having management or investment advisory agreements with GSAM. Under the most restrictive arrangement, the Funds must own securities having a market value in excess of 300% of each Fund’s total bank borrowings. This facility is to be used solely for temporary or emergency purposes. The interest rate on borrowings is based on the federal funds rate. The committed facility also requires a fee to be paid by the Funds based on the amount of the commitment which has not been utilized. During the year ended December 31, 2005, the Funds did not have any borrowings under this facility.

7. TAX INFORMATION

     The tax character of distributions paid during the fiscal year ended December 31, 2005 was as follows:

			Structured
			Tax-Managed		Real Estate
	Tollkeeper Fund		Equity Fund		Securities Fund
Distributions paid from:
Ordinary income	$	—	$	117,794	$	10,518,656
Net long-term capital gains		—		—		41,717,561
Total taxable distributions	$	—	$	117,794	$	52,236,217

The tax character of distributions paid during the fiscal year ended December 31, 2004 was as follows:

			Structured
			Tax-Managed		Real Estate
	Tollkeeper Fund		Equity Fund		Securities Fund
Distributions paid from:
Ordinary income	$	—	$	203,940	$	10,678,799
Net long-term capital gains		—		—		30,725,804
Total taxable distributions	$	—	$	203,940	$	41,404,603

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GOLDMAN SACHS SPECIALTY FUNDS

Notes to Financial Statements (continued)

December 31, 2005

7. TAX INFORMATION (continued)

     As of December 31, 2005, the components of accumulated earnings (losses) on a tax basis were as follows:

					Structured
					Tax-Managed			Real Estate
		Tollkeeper Fund			Equity Fund			Securities Fund
Undistributed ordinary income — net		$	—		$	21,088		$	655,325
Undistributed long-term capital gains			—			—			1,277,571
Total undistributed earnings		$	—		$	21,088		$	1,932,896
Capital loss carryforward:(1)(2)
	Expiring 2009		(775,760,676	)		(21,567,672	)		—
	Expiring 2010		(476,361,177	)		(20,748,975	)		—
	Expiring 2011		(137,998,151	)		(209,608	)		—
	Expiring 2012		(1,145,651	)		—			—
Total capital loss carryforward			(1,391,265,655	)		(42,526,255	)		—
Timing differences (post October losses/certain REIT distributions)			—			—			648,720
Unrealized gains (losses) — net			7,361,938			31,306,939			209,218,658
Total accumulated earnings (losses) — net		$	(1,383,903,717	)	$	(11,198,228	)	$	211,800,274

(1)	Expiration occurs on December 31 of the year indicated.
(2)	During the year ended December 31, 2005, Tollkeeper and Structured Tax-Managed Equity Funds utilized $37,043,183 and $2,636,195 of capital losses, respectively.

     At December 31, 2005, the Funds’ aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes was as follows:

				Structured
				Tax-Managed			Real Estate
	Tollkeeper Fund			Equity Fund			Securities Fund
Tax Cost	$	314,545,034		$	110,679,307		$	509,405,883
Gross Unrealized Gain		38,588,993			31,796,887			209,617,991
Gross Unrealized Loss		(31,227,055	)		(489,948	)		(399,333	)
Net unrealized security gain	$	7,361,938		$	31,306,939		$	209,218,658

The difference between book-basis and tax-basis unrealized gains (losses) is attributable primarily to wash sales, the recognition of gains on appreciated stock for tax purposes and net mark to market losses on Section 1256 futures contracts.

     In order to present certain components of the Funds’ capital accounts on a tax basis, certain reclassifications have been recorded to the Funds’ accounts. These reclassifications have no impact on the net asset value of the Funds. Reclassifications result primarily from the difference in tax treatment of real estate investment trusts and net operating losses.

							Accumulated
				Accumulated			Undistributed
				Net Realized			Net Investment
Fund	Paid-in Capital			Gain (Loss)			Income
Tollkeeper	$	(5,331,671	)	$	65,425		$	5,266,246
Structured Tax-Managed Equity		—			—			—
Real Estate Securities		—			(3,369,824	)		3,369,824

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GOLDMAN SACHS SPECIALTY FUNDS

8. OTHER MATTERS

As of December 31, 2005, Goldman Sachs & Co. Employees Profit Sharing Master Trust was the beneficial owner of approximately 16% of the outstanding shares of the Real Estate Securities Fund.

     In addition, the following Goldman Sachs Asset Allocation Portfolios were beneficial owners of the Real Estate Securities Fund as of December 31, 2005 (as a percentage of outstanding Institutional shares):

			Goldman Sachs				Goldman Sachs
	Goldman Sachs		Growth and Income		Goldman Sachs		Aggressive
	Balanced Strategy		Strategy		Growth Strategy		Growth Strategy
Fund	Portfolio		Portfolio		Portfolio		Portfolio
Real Estate Securities		1%		3%		2%		1%

Legal Proceedings — Purported class and derivative action lawsuits were filed in April and May 2004 in the United States District Court for the Southern District of New York against Goldman Sachs Group, Inc. (“GSG”), GSAM and certain related parties, including certain Goldman Sachs Funds including these Funds, and the Trustees and Officers of the Trust. In June 2004, these lawsuits were consolidated into one action and in November 2004 a consolidated and amended complaint was filed against GSG, GSAM, Goldman Sachs Asset Management International (“GSAMI”), Goldman Sachs and certain related parties including certain Goldman Sachs Funds and the Trustees and Officers of the Trust. The Funds in this report, along with certain other investment portfolios of the Trust, were named as nominal defendants in the amended complaint. Plaintiffs filed a second amended consolidated complaint on April 15, 2005. The second amended complaint alleges violations of the Act and the Investment Advisers Act of 1940. The second complaint also asserts claims involving common law breach of fiduciary duty and unjust enrichment. The complaint alleges, among other things, that between April 2, 1999 and January 9, 2004 (the “Class Period”), GSAM and other defendants made improper and excessive brokerage commission and other payments to brokers that sold shares of the Goldman Sachs Funds and omitted statements of fact in registration statements and reports filed pursuant to the Act which were necessary to prevent such registration statements and reports from being materially false and misleading. The complaint further alleges that the Goldman Sachs Funds paid excessive and improper advisory fees to Goldman Sachs. The complaint also alleges GSAM and GSAMI used 12b-1 fees for improper purposes and made improper use of soft dollars. The complaint further alleges that the Trust’s Officers and Trustees breached their fiduciary duties in connection with the foregoing. On January 13, 2006, all claims against the defendants were dismissed by the U.S. District Court. It is possible that the plaintiffs may appeal this decision.

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

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Notes to Financial Statements (continued)

December 31, 2005

9. SUMMARY OF SHARE TRANSACTIONS

Share activity is as follows:

	Tollkeeper Fund
	For the Year Ended						For the Year Ended
	December 31, 2005						December 31, 2004
	Shares			Dollars			Shares			Dollars
Class A Shares
Shares sold		3,095,992		$	23,855,881			3,791,149		$	26,708,126
Shares converted from Class B(a)		137,949			1,063,670			10,714			77,615
Shares repurchased		(7,643,167	)		(58,350,553	)		(9,591,841	)		(67,501,920	)
		(4,409,226	)		(33,431,002	)		(5,789,978	)		(40,716,179	)
Class B Shares
Shares sold		261,562			1,913,691			315,608			2,175,857
Shares converted to Class A(a)		(144,191	)		(1,063,670	)		(11,131	)		(77,615	)
Shares repurchased		(5,990,133	)		(44,061,374	)		(6,679,013	)		(45,462,651	)
		(5,872,762	)		(43,211,353	)		(6,374,536	)		(43,364,409	)
Class C Shares
Shares sold		369,226			2,715,457			381,690			2,599,057
Shares repurchased		(2,918,197	)		(21,386,034	)		(3,620,229	)		(24,657,529	)
		(2,548,971	)		(18,670,577	)		(3,238,539	)		(22,058,472	)
Institutional Shares
Shares sold		93,645			737,148			285,519			2,062,277
Shares repurchased		(429,593	)		(3,405,481	)		(2,771,284	)		(19,831,439	)
		(335,948	)		(2,668,333	)		(2,485,765	)		(17,769,162	)
Service Shares
Shares sold		3,757			29,084			59,101			411,793
Shares repurchased		(6,600	)		(50,109	)		(50,577	)		(356,469	)
		(2,843	)		(21,025	)		8,524			55,324
NET DECREASE		(13,169,750	)	$	(98,002,290	)		(17,880,294	)	$	(123,852,898	)

(a)  Class B Shares will automatically convert into Class A Shares at the end of the calendar quarter that is eight years after the initial purchase date of either the Fund or another Goldman Sachs Fund.

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9. SUMMARY OF SHARE TRANSACTIONS (continued)

	Structured Tax-Managed Equity Fund
	For the Year Ended						For the Year Ended
	December 31, 2005						December 31, 2004
	Shares			Dollars			Shares			Dollars
Class A Shares
Shares sold		4,056,229		$	40,430,685			684,187		$	6,057,105
Shares converted from Class B(a)		6,461			65,417			10,986			102,852
Reinvestment of dividends and distributions		4,962			51,757			16,537			154,125
Shares repurchased		(927,457	)		(9,014,017	)		(920,988	)		(7,997,534	)
		3,140,195			31,533,842			(209,278	)		(1,683,452	)
Class B Shares
Shares sold		111,891			1,052,770			124,580			1,043,585
Shares converted to Class A(a)		(6,678	)		(65,417	)		(11,287	)		(102,852	)
Shares repurchased		(540,991	)		(5,027,276	)		(545,209	)		(4,542,347	)
		(435,778	)		(4,039,923	)		(431,916	)		(3,601,614	)
Class C Shares
Shares sold		264,729			2,458,239			233,592			1,953,407
Shares repurchased		(418,178	)		(3,894,499	)		(713,418	)		(5,940,072	)
		(153,449	)		(1,436,260	)		(479,826	)		(3,986,665	)
Institutional Shares
Shares sold		1,358,712			13,854,225			281,892			2,455,088
Reinvestment of dividends and distributions		2,437			25,810			1,200			11,349
Shares repurchased		(101,700	)		(966,306	)		(195,196	)		(1,688,596	)
		1,259,449			12,913,729			87,896			777,841
Service Shares
Shares sold		—			—			1			9
Shares repurchased		(18,350	)		(184,450	)		(48,244	)		(416,890	)
		(18,350	)		(184,450	)		(48,243	)		(416,881	)
NET INCREASE (DECREASE)		3,792,067		$	38,786,938			(1,081,367	)	$	(8,910,771	)

(a)  Class B Shares will automatically convert into Class A Shares at the end of the calendar quarter that is eight years after the initial purchase date of either the Fund or another Goldman Sachs Fund.

43

GOLDMAN SACHS SPECIALTY FUNDS

Notes to Financial Statements (continued)

December 31, 2005

9. SUMMARY OF SHARE TRANSACTIONS (continued)

	Real Estate Securities Fund
	For the Year Ended						For the Year Ended
	December 31, 2005						December 31, 2004
	Shares			Dollars			Shares			Dollars
Class A Shares
Shares sold		6,274,862		$	109,847,880			7,104,763		$	107,371,884
Shares converted from Class B(a)		6,639			116,418			660			10,210
Reinvestment of dividends and distributions		1,100,597			19,642,193			1,083,933			17,676,261
Shares repurchased		(6,753,846	)		(116,817,551	)		(5,644,763	)		(83,721,355	)
		628,252			12,788,940			2,544,593			41,337,000
Class B Shares
Shares sold		197,614			3,492,326			320,152			4,901,517
Shares converted to Class A(a)		(6,623	)		(116,418	)		(660	)		(10,210	)
Reinvestment of dividends and distributions		72,939			1,308,501			87,357			1,435,131
Shares repurchased		(480,926	)		(8,502,399	)		(401,987	)		(6,020,146	)
		(216,996	)		(3,817,990	)		4,862			306,292
Class C Shares
Shares sold		245,826			4,327,210			256,415			3,859,628
Reinvestment of dividends and distributions		61,086			1,087,285			65,612			1,070,049
Shares repurchased		(261,227	)		(4,566,541	)		(237,177	)		(3,563,578	)
		45,685			847,954			84,850			1,366,099
Institutional Shares
Shares sold		8,663,661			150,445,372			7,084,204			107,671,204
Reinvestment of dividends and distributions		1,346,111			24,114,871			937,796			15,331,660
Shares repurchased		(4,146,435	)		(72,522,372	)		(3,556,609	)		(53,530,569	)
		5,863,337			102,037,871			4,465,391			69,472,295
Service Shares
Shares sold		260,484			4,543,950			158,074			2,451,706
Reinvestment of dividends and distributions		7,131			128,244			2,470			40,824
Shares repurchased		(92,570	)		(1,624,884	)		(26,079	)		(422,943	)
		175,045			3,047,310			134,465			2,069,587
NET INCREASE		6,495,323		$	114,904,085			7,234,161		$	114,551,273

(a)  Class B Shares will automatically convert into Class A Shares at the end of the calendar quarter that is eight years after the initial purchase date of either the Fund or another Goldman Sachs Fund.

44

GOLDMAN SACHS SPECIALTY FUNDS

10. SUBSEQUENT EVENTS

Effective January 6, 2006, the name of the Goldman Sachs CORE^SM Tax-Managed Equity Fund was changed to the Goldman Sachs Structured Tax-Managed Equity Fund. This name change will not affect the Fund’s investment objectives, policies, strategies, practices or limitations. Additionally, effective January 6, 2006, the Investment Adviser has agreed to voluntarily waive a portion of its management fee equal to 0.05% of the average daily net assets of the Structured Tax-Managed Equity Fund and has also agreed to voluntarily reduce the Other Expense limitations to 0.004% of the Fund’s average daily net assets.

45

GOLDMAN SACHS TOLLKEEPER FUND^SM

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Year

			Income (loss) from
			investment operations
	Net asset											Net asset
	value,		Net			Net realized			Total from			value,
	beginning		investment			and unrealized			investment			end		Total
Year - Share Class	of year		loss(a)			gain (loss)			operations			of year		return(b)
FOR THE YEARS ENDED DECEMBER 31,
2005 - A	$	7.87	$	(0.08	)	$	0.23		$	0.15		$	8.02		1.91	%
2005 - B		7.56		(0.13	)		0.22			0.09			7.65		1.19
2005 - C		7.55		(0.13	)		0.22			0.09			7.64		1.19
2005 - Institutional		8.04		(0.05	)		0.24			0.19			8.23		2.36
2005 - Service		7.85		(0.09	)		0.23			0.14			7.99		1.78
2004 - A		6.99		(0.04	)		0.92			0.88			7.87		12.59
2004 - B		6.77		(0.09	)		0.88			0.79			7.56		11.67
2004 - C		6.76		(0.09	)		0.88			0.79			7.55		11.69
2004 - Institutional		7.11		(0.02	)		0.95			0.93			8.04		13.08
2004 - Service		6.96		(0.04	)		0.93			0.89			7.85		12.79
2003 - A		4.80		(0.08	)		2.27			2.19			6.99		45.63
2003 - B		4.68		(0.12	)		2.21			2.09			6.77		44.66
2003 - C		4.67		(0.12	)		2.21			2.09			6.76		44.75
2003 - Institutional		4.86		(0.05	)		2.30			2.25			7.11		46.30
2003 - Service		4.78		(0.08	)		2.26			2.18			6.96		45.61
2002 - A		7.91		(0.08	)		(3.03	)		(3.11	)		4.80		(39.32	)
2002 - B		7.77		(0.12	)		(2.97	)		(3.09	)		4.68		(39.77	)
2002 - C		7.77		(0.12	)		(2.98	)		(3.10	)		4.67		(39.90	)
2002 - Institutional		7.98		(0.06	)		(3.06	)		(3.12	)		4.86		(39.10	)
2002 - Service		7.89		(0.09	)		(3.02	)		(3.11	)		4.78		(39.42	)
2001 - A		11.90		(0.13	)		(3.86	)		(3.99	)		7.91		(33.53	)
2001 - B		11.79		(0.20	)		(3.82	)		(4.02	)		7.77		(34.10	)
2001 - C		11.78		(0.20	)		(3.81	)		(4.01	)		7.77		(34.04	)
2001 - Institutional		11.97		(0.09	)		(3.90	)		(3.99	)		7.98		(33.33	)
2001 - Service		11.88		(0.13	)		(3.86	)		(3.99	)		7.89		(33.59	)

(a)

Calculated based on the average shares outstanding methodology.

(b)

Assumes investment at the net asset value at the beginning of the year, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the year and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

46

GOLDMAN SACHS TOLLKEEPER FUND^SM

								Ratios assuming no
								expense reductions
Net assets					Ratio of						Ratio of
at end of		Ratio of net			net investment			Ratio of total			net investment			Portfolio
year		expenses to			loss to			expenses to			loss to			turnover
(in 000s)		average net assets			average net assets			average net assets			average net assets			rate
$	125,718		1.50	%		(1.10	)%		1.56	%		(1.16	)%		48	%
	120,415		2.25			(1.85	)		2.31			(1.91	)		48
	60,638		2.25			(1.85	)		2.31			(1.91	)		48
	8,819		1.10			(0.70	)		1.16			(0.76	)		48
	100		1.60			(1.20	)		1.66			(1.26	)		48
	158,079		1.50			(0.55	)		1.56			(0.61	)		37
	163,502		2.25			(1.31	)		2.31			(1.37	)		37
	79,210		2.25			(1.31	)		2.31			(1.37	)		37
	11,323		1.10			(0.31	)		1.16			(0.37	)		37
	121		1.60			(0.57	)		1.66			(0.63	)		37
	180,819		1.50			(1.30	)		1.55			(1.35	)		27
	189,420		2.25			(2.04	)		2.30			(2.09	)		27
	92,752		2.25			(2.04	)		2.30			(2.09	)		27
	27,687		1.10			(0.89	)		1.15			(0.94	)		27
	48		1.60			(1.39	)		1.65			(1.44	)		27
	147,055		1.51			(1.46	)		1.56			(1.51	)		28
	154,251		2.26			(2.21	)		2.31			(2.26	)		28
	74,765		2.26			(2.21	)		2.31			(2.26	)		28
	15,920		1.11			(1.06	)		1.16			(1.11	)		28
	74		1.61			(1.56	)		1.66			(1.61	)		28
	325,639		1.50			(1.37	)		1.50			(1.37	)		24
	345,170		2.25			(2.12	)		2.25			(2.12	)		24
	173,860		2.25			(2.12	)		2.25			(2.12	)		24
	56,030		1.10			(0.97	)		1.10			(0.97	)		24
	309		1.60			(1.40	)		1.60			(1.40	)		24

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

47

GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Year

			Income (loss) from
			investment operations
												Distributions
	Net asset		Net									to shareholders
	value,		investment			Net realized			Total from			from net
	beginning		income			and unrealized			investment			investment
Year - Share Class	of year		(loss)(a)			gain (loss)			operations			income
FOR THE YEARS ENDED DECEMBER 31,
2005 - A	$	9.56	$	0.04		$	0.80		$	0.84		$	(0.01	)
2005 - B		9.30		(0.03	)		0.77			0.74			—
2005 - C		9.28		(0.03	)		0.77			0.74			—
2005 - Institutional		9.70		0.09			0.81			0.90			(0.04	)
2005 - Service		9.54		0.03			0.80			0.83			—
2004 - A		8.09		0.06			1.45			1.51			(0.04	)
2004 - B		7.90		(0.01	)		1.41			1.40			—
2004 - C		7.88		(0.01	)		1.41			1.40			—
2004 - Institutional		8.21		0.10			1.47			1.57			(0.08	)
2004 - Service		8.06		0.05			1.44			1.49			(0.01	)
2003 - A		6.27		0.02			1.80			1.82			—
2003 - B		6.16		(0.03	)		1.77			1.74			—
2003 - C		6.15		(0.03	)		1.76			1.73			—
2003 - Institutional		6.33		0.05			1.83			1.88			—
2003 - Service		6.24		0.01			1.81			1.82			—
2002 - A		7.92		0.01			(1.66	)		(1.65	)		—
2002 - B		7.84		(0.04	)		(1.64	)		(1.68	)		—
2002 - C		7.82		(0.04	)		(1.63	)		(1.67	)		—
2002 - Institutional		7.96		0.04			(1.67	)		(1.63	)		—
2002 - Service		7.90		—	(c)		(1.66	)		(1.66	)		—
2001 - A		8.93		—	(c)		(0.99	)		(0.99	)		(0.02	)
2001 - B		8.89		(0.06	)		(0.99	)		(1.05	)		—
2001 - C		8.88		(0.06	)		(0.99	)		(1.05	)		(0.01	)
2001 - Institutional		8.96		0.03			(1.00	)		(0.97	)		(0.03	)
2001 - Service		8.93		(0.01	)		(0.99	)		(1.00	)		(0.03	)

(a)	Calculated based on the average shares outstanding methodology.
(b)	Assumes investment at the net asset value at the beginning of the year, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the year and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(c)	Less than $0.005 per share.

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

48

GOLDMAN SACHS STRUCTURED TAX-MANAGED EQUITY FUND

													Ratios assuming no
													expense reductions
										Ratio of						Ratio of
					Net assets at		Ratio of			net investment			Ratio of			net investment
Net asset					end of		net expenses			income (loss)			expenses			income (loss)			Portfolio
at end		Total			year		to average			to average			to average			to average			turnover
of year		return(b)			(in 000s)		net assets			net assets			net assets			net assets			rate
$	10.39		8.77	%	$	76,268		1.19	%		0.45	%		1.55	%		0.10	%		92	%
	10.04		7.96			25,218		1.94			(0.33	)		2.29			(0.68	)		92
	10.02		7.97			22,687		1.94			(0.33	)		2.29			(0.68	)		92
	10.56		9.25			17,843		0.79			0.89			1.15			0.52			92
	10.37		8.70			411		1.29			0.32			1.64			(0.03	)		92
	9.56		18.69			40,125		1.21			0.64			1.57			0.28			102
	9.30		17.72			27,405		1.96			(0.12	)		2.32			(0.48	)		102
	9.28		17.77			22,431		1.96			(0.12	)		2.32			(0.48	)		102
	9.70		19.10			4,177		0.81			1.16			1.17			0.80			102
	9.54		18.54			553		1.31			0.50			1.67			0.14			102
	8.09		29.03			35,664		1.25			0.25			1.57			(0.07	)		73
	7.90		28.25			26,689		2.00			(0.50	)		2.32			(0.82	)		73
	7.88		28.13			22,832		2.00			(0.50	)		2.32			(0.82	)		73
	8.21		29.70			2,814		0.85			0.65			1.17			0.33			73
	8.06		29.17			856		1.35			0.15			1.67			(0.17	)		73
	6.27		(20.83	)		38,013		1.26			0.11			1.48			(0.11	)		81
	6.16		(21.43	)		24,066		2.01			(0.64	)		2.23			(0.86	)		81
	6.15		(21.36	)		21,711		2.01			(0.64	)		2.23			(0.86	)		81
	6.33		(20.48	)		5,863		0.86			0.52			1.08			0.30			81
	6.24		(21.01	)		729		1.36			0.03			1.58			(0.19	)		81
	7.92		(11.03	)		62,896		1.24			—			1.45			(0.20	)		102
	7.84		(11.78	)		37,711		1.99			(0.74	)		2.20			(0.95	)		102
	7.82		(11.85	)		33,089		1.99			(0.74	)		2.20			(0.95	)		102
	7.96		(10.78	)		9,933		0.84			0.42			1.05			0.21			102
	7.90		(11.15	)		723		1.34			(0.09	)		1.55			(0.30	)		102

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

49

GOLDMAN SACHS REAL ESTATE SECURITIES FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Year

			Income (loss) from
			investment operations							Distributions to shareholders
	Net asset
	value,		Net		Net realized			Total from		From net			From net			From tax
	beginning		investment		and unrealized			investment		investment			realized			return of			Total
Year - Share Class	of year		income(a)		gain (loss)			operations		income			gains			capital			distributions
FOR THE YEARS ENDED DECEMBER 31,
2005 - A	$	17.29	$	0.25	$	1.93		$	2.18	$	(0.34	)	$	(1.09	)	$	—		$	(1.43	)
2005 - B		17.34		0.10		1.96			2.06		(0.21	)		(1.09	)		—			(1.30	)
2005 - C		17.22		0.12		1.93			2.05		(0.22	)		(1.09	)		—			(1.31	)
2005 - Institutional		17.34		0.34		1.92			2.26		(0.41	)		(1.09	)		—			(1.50	)
2005 - Service		17.37		0.27		1.91			2.18		(0.33	)		(1.09	)		—			(1.42	)
2004 - A		13.98		0.29		4.39			4.68		(0.34	)		(1.03	)		—			(1.37	)
2004 - B		14.04		0.17		4.40			4.57		(0.24	)		(1.03	)		—			(1.27	)
2004 - C		13.95		0.17		4.38			4.55		(0.25	)		(1.03	)		—			(1.28	)
2004 - Institutional		14.02		0.35		4.40			4.75		(0.40	)		(1.03	)		—			(1.43	)
2004 - Service		14.05		0.33		4.35			4.68		(0.33	)		(1.03	)		—			(1.36	)
2003 - A		10.53		0.41		3.63			4.04		(0.43	)		(0.16	)		—			(0.59	)
2003 - B		10.57		0.31		3.66			3.97		(0.34	)		(0.16	)		—			(0.50	)
2003 - C		10.51		0.31		3.63			3.94		(0.34	)		(0.16	)		—			(0.50	)
2003 - Institutional		10.55		0.46		3.65			4.11		(0.48	)		(0.16	)		—			(0.64	)
2003 - Service		10.57		0.47		3.59			4.06		(0.42	)		(0.16	)		—			(0.58	)
2002 - A		10.85		0.46		(0.14	)		0.32		(0.31	)		(0.27	)		(0.06	)		(0.64	)
2002 - B		10.90		0.40		(0.16	)		0.24		(0.24	)		(0.27	)		(0.06	)		(0.57	)
2002 - C		10.84		0.39		(0.16	)		0.23		(0.23	)		(0.27	)		(0.06	)		(0.56	)
2002 - Institutional		10.87		0.51		(0.14	)		0.37		(0.36	)		(0.27	)		(0.06	)		(0.69	)
2002 - Service		10.90		0.42		(0.11	)		0.31		(0.31	)		(0.27	)		(0.06	)		(0.64	)
2001 - A		11.00		0.37		0.34			0.71		(0.39	)		(0.47	)		—			(0.86	)
2001 - B		11.05		0.30		0.34			0.64		(0.32	)		(0.47	)		—			(0.79	)
2001 - C		10.98		0.30		0.35			0.65		(0.32	)		(0.47	)		—			(0.79	)
2001 - Institutional		11.03		0.41		0.34			0.75		(0.44	)		(0.47	)		—			(0.91	)
2001 - Service		11.04		0.37		0.34			0.71		(0.38	)		(0.47	)		—			(0.85	)

(a)

Calculated based on the average shares outstanding methodology.

(b)

Assumes investment at the net asset value at the beginning of the year, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the year and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

50

GOLDMAN SACHS REAL ESTATE SECURITIES FUND

													Ratios assuming no
													expense reductions
										Ratio of			Ratio of			Ratio of
					Net assets		Ratio of			net investment			total			net investment
Net asset					end of		net expenses			income			expenses			income			Portfolio
at end		Total			year		to average			to average			to average			to average			turnover
of year		return(b)			(in 000s)		net assets			net assets			net assets			net assets			rate
$	18.04		12.83	%	$	301,360		1.44	%		1.42	%		1.53	%		1.33	%		19	%
	18.10		12.03			21,597		2.19			0.58			2.28			0.50			19
	17.96		12.03			20,020		2.19			0.65			2.28			0.56			19
	18.10		13.30			348,872		1.04			1.89			1.13			1.80			19
	18.13		12.76			5,778		1.54			1.49			1.64			1.40			19
	17.29		34.28			277,873		1.44			1.92			1.62			1.74			30
	17.34		33.24			24,452		2.19			1.12			2.28			1.03			30
	17.22		33.26			18,410		2.19			1.13			2.28			1.04			30
	17.34		34.76			232,525		1.04			2.34			1.13			2.25			30
	17.37		34.15			2,496		1.54			2.19			1.63			2.10			30
	13.98		39.25			189,164		1.44			3.37			1.81			3.00			17
	14.04		38.27			19,728		2.19			2.58			2.31			2.46			17
	13.95		38.24			13,732		2.19			2.62			2.31			2.50			17
	14.02		39.90			125,388		1.04			3.81			1.16			3.69			17
	14.05		39.24			130		1.54			3.78			1.66			3.66			17
	10.53		2.91			123,487		1.45			4.08			1.84			3.69			37
	10.57		2.12			14,256		2.20			3.61			2.34			3.47			37
	10.51		2.11			9,072		2.20			3.56			2.34			3.42			37
	10.55		3.31			76,792		1.05			4.53			1.19			4.39			37
	10.57		2.78			30		1.55			3.97			1.69			3.83			37
	10.85		6.75			144,286		1.44			3.36			1.83			2.97			50
	10.90		5.98			7,559		2.19			2.71			2.33			2.57			50
	10.84		6.13			5,594		2.19			2.74			2.33			2.60			50
	10.87		7.16			74,923		1.04			3.75			1.18			3.61			50
	10.90		6.83			2		1.54			3.32			1.68			3.18			50

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

51

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees
Goldman Sachs Trust

We have audited the accompanying statements of assets and liabilities, including the statements of investments, of Goldman Sachs Tollkeeper Fund (formerly, Goldman Sachs Internet Tollkeeper Fund), Goldman Sachs Structured Tax-Managed Equity Fund (formerly, Goldman Sachs CORE Tax-Managed Equity Fund), and Goldman Sachs Real Estate Securities Fund (three of the funds comprising the Goldman Sachs Trust) (the “Funds”), as of December 31, 2005, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2005, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Goldman Sachs Tollkeeper Fund, Goldman Sachs Structured Tax-Managed Equity Fund and Goldman Sachs Real Estate Securities Fund at December 31, 2005, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

New York, New York

February 10, 2006

52

GOLDMAN SACHS SPECIALTY FUNDS

Fund Expenses (Unaudited) — Six Month Period Ended December 31, 2005

          As a shareholder of Class A, Class B, Class C, Institutional or Service Shares of the Funds you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments (with respect to Class A Shares), contingent deferred sales charges (loads) on redemptions (with respect to Class B and Class C Shares), and redemption fees (with respect to Class A, Class B, Class C, Institutional and Service Shares, if any); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees (with respect to Class A, Class B and Class C Shares); and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in Class A, Class B, Class C, Institutional and Service Shares of the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

          The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2005 through December 31, 2005.

Actual Expenses — The first line under each share class in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid” to estimate the expenses you paid on your account for this period.

Hypothetical Example for Comparison Purposes — The second line under each share class in the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which are not the Funds’ actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

          Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

	Tollkeeper Fund							Structured Tax-Managed Equity Fund							Real Estate Securities Fund
						Expenses							Expense							Expenses Paid
	Beginning		Ending			Paid for the		Beginning		Ending			Paid for the		Beginning		Ending			for the
	Account Value		Account Value			6 months ended		Account Value		Account Value			6 months ended		Account Value		Account Value			6 months ended
Share Class	7/1/05		12/31/05			12/31/05*		7/1/05		12/31/05			12/31/05*		7/1/05		12/31/05			12/31/05*
Class A
Actual	$	1,000.00	$	1,062.30		$	7.81	$	1,000.00	$	1,088.80		$	6.28	$	1,000.00	$	1,068.20		$	7.53
Hypothetical 5% return		1,000.00		1,017.63	+		7.64		1,000.00		1,019.19	+		6.07		1,000.00		1,017.93	+		7.34
Class B
Actual		1,000.00		1,058.10			11.69		1,000.00		1,084.20			10.19		1,000.00		1,064.20			11.41
Hypothetical 5% return		1,000.00		1,013.85	+		11.43		1,000.00		1,015.42	+		9.86		1,000.00		1,014.15	+		11.13
Class C
Actual		1,000.00		1,056.70			11.68		1,000.00		1,084.40			10.20		1,000.00		1,064.90			11.42
Hypothetical 5% return		1,000.00		1,013.85	+		11.43		1,000.00		1,015.42	+		9.86		1,000.00		1,014.15	+		11.13
Institutional
Actual		1,000.00		1,063.30			5.74		1,000.00		1,091.40			4.16		1,000.00		1,070.80			5.45
Hypothetical 5% return		1,000.00		1,019.64	+		5.62		1,000.00		1,021.22	+		4.02		1,000.00		1,019.94	+		5.31
Service
Actual		1,000.00		1,061.10			8.31		1,000.00		1088.10			6.78		1,000.00		1,068.10			8.03
Hypothetical 5% return		1,000.00		1,017.14	+		8.13		1,000.00		1,018.71	+		6.56		1,000.00		1,017.44	+		7.83

*   Expenses for each share class are calculated using each Fund’s annualized expense ratio for each class, which represents the ongoing expenses as a percentage of net assets for the six months ended December 31, 2005. Expenses are calculated by multiplying the annualized expense ratio by the average account value for the period; then multiplying the result by the number of days in the most recent fiscal half year; and then dividing that result by the number of days in the fiscal year. Expense ratios for the most recent fiscal half year may differ from expense ratios based on one-year data in the financial highlights. The annualized net expense ratios for the period were as follows:

Fund	Class A			Class B			Class C			Institutional			Service
Tollkeeper		1.50	%		2.25	%		2.25	%		1.10	%		1.60	%
Structured Tax-Managed Equity		1.19			1.94			1.94			0.80			1.29
Real Estate Securities		1.44			2.19			2.19			1.04			1.54

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

53

GOLDMAN SACHS SPECIALTY FUNDS

Trustees and Officers (Unaudited)

Independent Trustees

				Number of
		Term of		Portfolios in
	Position(s)	Office and		Fund Complex	Other
Name,	Held with	Length of	Principal Occupation(s)	Overseen by	Directorships
Address and Age1	the Trust2	Time Served3	During Past 5 Years	Trustee4	Held by Trustee5
Ashok N. Bakhru Age: 63	Chairman & Trustee	Since 1991	President, ABN Associates (July 1994-March 1996 and November 1998-Present); Executive Vice President—Finance and Administration and Chief Financial Officer, Coty Inc. (manufacturer of fragrances and cosmetics) (April 1996-November 1998); Director of Arkwright Mutual Insurance Company (1984-1999); Trustee of International House of Philadelphia (program center and residential community for students and professional trainees from the United States and foreign countries) (1989-2004); Member of Cornell University Council (1992-2004); Trustee of the Walnut Street Theater (1992-2004); Trustee, Scholarship America (1998-2005); Trustee, Institute for Higher Education Policy (2003- Present); Director, Private Equity Investors—III and IV (November 1998-Present), and Equity-Limited Investors II (April 2002-Present); and Chairman, Lenders Service Inc. (provider of mortgage lending services) (2000-2003). Chairman of the Board and Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies).	72	None
John P. Coblentz, Jr. Age: 64	Trustee	Since 2003	Partner, Deloitte & Touche LLP (June 1975-May 2003). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies).	72	None
Patrick T. Harker Age: 47	Trustee	Since 2000	Dean and Reliance Professor of Operations and Information Management, The Wharton School, University of Pennsylvania (February 2000-Present); Interim and Deputy Dean, The Wharton School, University of Pennsylvania (July 1999-Present); and Professor and Chairman of Department of Operations and Information Management, The Wharton School, University of Pennsylvania (July 1997-August 2000). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies).	72	None
Mary P. McPherson Age: 70	Trustee	Since 1997	Vice President, The Andrew W. Mellon Foundation (provider of grants for conservation, environmental and educational purposes) (October 1997-Present); Director, Smith College (1998-Present); Director, Josiah Macy, Jr. Foundation (health educational programs) (1977-Present); Director, Philadelphia Contributionship (insurance) (1985-Present); Director Emeritus, Amherst College (1986-1998); Director, The Spencer Foundation (educational research) (1993-February 2003); member of PNC Advisory Board (banking) (1993-1998); Director, American School of Classical Studies in Athens (1997-Present); and Trustee, Emeriti Retirement Health Solutions (post-retirement medical insurance program for non-profit institutions) (Since 2005). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies).	72	None
Wilma J. Smelcer Age: 56	Trustee	Since 2001	Chairman, Bank of America, Illinois (banking) (1998-January 2001); and Governor, Board of Governors, Chicago Stock Exchange (national securities exchange) (April 2001-April 2004). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies).	72	Lawson Products Inc. (distributor of industrial products).

54

GOLDMAN SACHS SPECIALTY FUNDS

Trustees and Officers (Unaudited) (continued)

Independent Trustees

				Number of
		Term of		Portfolios in
	Position(s)	Office and		Fund Complex	Other
Name,	Held with	Length of	Principal Occupation(s)	Overseen by	Directorships
Address and Age1	the Trust2	Time Served3	During Past 5 Years	Trustee4	Held by Trustee5
Richard P. Strubel Age: 66	Trustee	Since 1987	Vice Chairman and Director, Cardean Learning Group (provider of educational services via the internet) (2003-Present); President, COO and Director, Cardean Learning Group (1999-2003); Director, Cantilever Technologies, Inc. (a private software company) (1999-Present); Trustee, The University of Chicago (1987-Present); and Managing Director, Tandem Partners, Inc. (management services firm) (1990-1999). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies).	72	Gildan Activewear Inc. (an activewear clothing marketing and manufacturing company); Unext, Inc. (provider of educational services via the internet); Northern Mutual Fund Complex (53 Portfolios).

Interested Trustees

				Number of
		Term of		Portfolios in
	Position(s)	Office and		Fund Complex	Other
Name,	Held with	Length of	Principal Occupation(s)	Overseen by	Directorships
Address and Age1	the Trust2	Time Served3	During Past 5 Years	Trustee4	Held by Trustee5
*Alan A. Shuch Age: 56	Trustee	Since 1990	Advisory Director—GSAM (May 1999-Present); Consultant to GSAM (December 1994-May 1999); and Limited Partner, Goldman Sachs (December 1994-May 1999). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies).	72	None
*Kaysie P. Uniacke Age: 44	Trustee & President	Since 2001	Managing Director, GSAM (1997-Present).	72	None
		Since 2002	Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies). President—Goldman Sachs Mutual Fund Complex (2002- Present) (registered investment companies). Assistant Secretary—Goldman Sachs Mutual Fund Complex (1997-2002) (registered investment companies).

*	These persons are considered to be “Interested Trustees” because they hold positions with Goldman Sachs and own securities issued by The Goldman Sachs Group, Inc. Each Interested Trustee holds comparable positions with certain other companies of which Goldman Sachs, GSAM or an affiliate thereof is the investment adviser, administrator and/or distributor.
1	Each Trustee may be contacted by writing to the Trustee, c/o Goldman Sachs, One New York Plaza, 37th Floor, New York, New York, 10004, Attn: Howard B. Surloff.
2	The Trust is a successor to a Massachusetts business trust that was combined with the Trust on April 30, 1997.
3	Each Trustee holds office for an indefinite term until the earliest of: (a) the election of his or her successor; (b) the date the Trustee resigns or is removed by the Board of Trustees or shareholders, in accordance with the Trust’s Declaration of Trust; (c) the date the Trustee attains the age of 72 years (in accordance with the current resolutions of the Board of Trustees, which may be changed by the Trustees without shareholder vote); or (d) the termination of the Trust.
4	The Goldman Sachs Mutual Fund Complex consists of the Trust and Goldman Sachs Variable Insurance Trust. As of December 31, 2005, the Trust consisted of 61 portfolios, including the Funds described in this Annual Report, and Goldman Sachs Variable Insurance Trust consisted of 11 portfolios.
5	This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934 (i.e., “public companies”) or other investment companies registered under the Act.

Additional information about the Trustees is available in the Funds’ Statement of Additional Information which can be obtained from Goldman Sachs free of charge by calling this toll-free number (in the United States of America): 1-800-292-4726

55

GOLDMAN SACHS SPECIALTY FUNDS

Trustees and Officers (Unaudited) (continued)

Officers of the Trust*

		Term of
		Office and
Name,	Position(s) Held	Length of
Address and Age	With the Trust	Time Served1	Principal Occupation(s) During Past 5 Years
Kaysie P. Uniacke 32 Old Slip New York, NY 10005 Age: 44	President & Trustee	Since 2002 Since 2001	Managing Director, GSAM (1997-Present). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies). President—Goldman Sachs Mutual Fund Complex (registered investment companies). Assistant Secretary—Goldman Sachs Mutual Fund Complex (1997-2002) (registered investment companies).
James A. Fitzpatrick 71 South Wacker Drive Suite 500 Chicago, IL 60606 Age: 45	Vice President	Since 1997	Managing Director, Goldman Sachs (October 1999-Present); and Vice President of GSAM (April 1997-December 1999). Vice President—Goldman Sachs Mutual Fund Complex (registered investment companies).
James A. McNamara 32 Old Slip New York, NY 10005 Age: 43	Vice President	Since 2001	Managing Director, Goldman Sachs (December 1998-Present); Director of Institutional Fund Sales, GSAM (April 1998-December 2000); and Senior Vice President and Manager, Dreyfus Institutional Service Corporation (January 1993-April 1998). Vice President—Goldman Sachs Mutual Fund Complex (registered investment companies). Trustee—Goldman Sachs Mutual Fund Complex (registered investment companies) (December 2002-May 2004).
John M. Perlowski 32 Old Slip New York, NY 10005 Age: 41	Treasurer	Since 1997	Managing Director, Goldman Sachs (November 2003-Present) and Vice President, Goldman Sachs (July 1995-November 2003). Treasurer—Goldman Sachs Mutual Fund Complex (registered investment companies).
Howard B. Surloff One New York Plaza 37th Floor New York, NY 10004 Age: 40	Secretary	Since 2001	Managing Director, Goldman Sachs (November 2002-Present); Associate General Counsel, Goldman Sachs and General Counsel to the U.S. Funds Group (December 1997-Present). Secretary—Goldman Sachs Mutual Fund Complex (registered investment companies) (2001-Present) and Assistant Secretary prior thereto.

1	Officers hold office at the pleasure of the Board of Trustees or until their successors are duly elected and qualified. Each officer holds comparable positions with certain other companies of which Goldman Sachs, GSAM or an affiliate thereof is the investment adviser, administrator and/or distributor.
*	Represents a partial list of officers of the Trust. Additional information about all the officers is available in the Funds’ Statement of Additional Information which can be obtained from Goldman Sachs free of charge by calling this toll-free number (in the United States): 1-800-292-4726.

Goldman Sachs Specialty Funds — Tax Information (Unaudited)

       For the year ended December 31, 2005, 100% and 3.98% of the dividends paid from net investment company taxable income by the Structured Tax-Managed Equity Fund and Real Estate Securities Fund, respectively, qualify for the dividends received deduction available to corporations.

       Pursuant to Section 852 of the Internal Revenue Code, the Real Estate Securities Fund designated $41,717,561 as capital gain dividends paid during the year ended December 31, 2005. Of the amount designated by the Real Estate Securities Fund, $40,259,018 is taxed at a maximum rate of 15% while the balance is taxed at a maximum rate of 25%.

       For the year ended December 31, 2005, 100% and 0.97% of the dividends paid from net investment company taxable income by the Structured Tax-Managed Equity Fund and Real Estate Securities Fund, respectively, qualify for the reduced tax rate under the Jobs and Growth Tax Relief and Reconciliation Act of 2003.

       Pursuant to Section 871(k) of the Internal Revenue Code, the Real Estate Securities Fund designated $1,277,731 as short-term capital gain dividends.

56

F U N D S P R O F I L E Goldman Sachs Funds Goldman Sachs is a premier financial services firm, known since 1869 for creating thoughtful and customized investment solutions in complex global markets. Today, the Investment Management Division of Goldman Sachs serves a diverse set of clients worldwide, including private institutions, public entities and individuals. With portfolio management teams located around the world — and $526.4 billion in assets under management as of December 31, 2005 — our investment professionals bring firsthand knowledge of local THE GOLDMAN markets to every investment decision, making us one of the few truly global asset managers. SACHS ADVANTAGE Our goal is to deliver: G O L D M A N S A C H S F U N D S In building a globally diversified INTERNATIONAL Strong, Consistent EQUITY portfolio, you select from more than r ⁿ Investment Results t ^u 50 Goldman Funds and gain access R ^e k ^/ to investment opportunities across R ^{i s} Global Resources e ^r borders, investment styles, asset classes g ^h and Global Research H ⁱ and security capitalizations. Team Approach DOMESTIC Disciplined Processes EQUITY IOS OL T ^F Specialty Funds ^POR Tollkeeper Fund^SM Innovative, T ^ION T ^Y Structured Tax-Managed Equity A ^L Value-Added OCA C ^I L ^L SPE Fund² Investment Products FIXED ^A INCOME T U.S. Equity Dividend and Premium Thoughtful Solutions A ^SSE Fund Risk Management Real Estate Securities Fund Fixed Income Funds n Emerging Markets Debt Fund MONEY u ^r MARKET e ^t Domestic Equity Funds High Yield Fund / ^R s ^k Small Cap Value Fund High Yield Municipal Fund Outstanding r ^{R i} w ^e Structured Small Cap Equity Fund² Global Income Fund Client Service L ^o Small/Mid Cap Growth Fund Investment Grade Credit Fund Growth Opportunities Fund Core Fixed Income Fund Dedicated Service Mid Cap Value Fund Government Income Fund Teams Concentrated Growth Fund U.S. Mortgages Fund Excellence and Research Select Fund^SM Municipal Income Fund Integrity Strategic Growth Fund California Intermediate AMT-Free Capital Growth Fund Fund International Equity Funds Large Cap Value Fund New York Intermediate AMT-Free Asia Equity Fund² Growth and Income Fund Fund Emerging Markets Equity Fund Structured Large Cap Growth Fund² Short Duration Tax-Free Fund International Small Cap Fund² Structured Large Cap Value Fund² Short Duration Government Fund Japanese Equity Fund Structured U.S. Equity Fund² Ultra-Short Duration Government European Equity Fund Fund International Equity Fund Asset Allocation Funds Enhanced Income Fund Structured International Equity Balanced Fund Fund² Asset Allocation Portfolios Money Market Funds^{1 1} An investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds. ² Effective December 30, 2005, the Asia Growth Fund was renamed the Asia Equity Fund and the International Growth Opportunities Fund was renamed the International Small Cap Fund. Also effective December 30, 2005, the CORE International Equity, CORE Small Cap Equity, CORE Large Cap Growth, CORE Large C ap Value and CORE U.S. Equity Funds were renamed, respectively, the Structured International Equity, Structured Small Cap Equity, Structured Large Cap Growth, Structured Large Cap Value Funds and Structured U.S. Equity. Effective January 6, 2006, the CORE Tax-Managed Equity Fund was renamed the Structured Tax-Managed Equity Fund. The Goldman Sachs Research Select Fund^SM, Tollkeeper Fund^SM and CORE^SM are registered service marks of Goldman, Sachs & Co.

GOLDMAN SACHS ASSET MANAGEMENT, L.P. 32 OLD SLIP, 32ND FLOOR, NEW YORK, NEW YORK 10005 T R U S T E E S O F F I C E R S Ashok N. Bakhru, Chairman Kaysie P. Uniacke, President John P. Coblentz, Jr. James A. Fitzpatrick, Vice President Patrick T. Harker James A. McNamara, Vice President Mary Patterson McPherson John M. Perlowski, Treasurer Alan A. Shuch Howard B. Surloff, Secretary Wilma J. Smelcer Richard P. Strubel Kaysie P. Uniacke G O L D M A N , S AC H S & CO. G O L D M A N S AC H S A S S E T M A N AG E M E N T, L . P. Distributor and Transfer Agent Investment Adviser Visit our Web site at www.gs.com/funds to obtain the most recent month-end returns. The reports concerning the Funds included in this shareholder report may contain certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed. A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities and information regarding how a Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (i) without charge, upon request by calling 1-800-526-7384 (for Retail Shareholders) or 1-800-621-2550 (for Institutional Shareholders); and (ii) on the Securities and Exchange Commission Web site at http://www.sec.gov. The Funds file their complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. Beginning the fiscal quarter ended September 30, 2004 and every first and third fiscal quarter thereafter, the Funds’ Form N-Q will become available on the SEC’s website at http://www.sec.gov within 60 days after the Funds’ first and third fiscal quarters. When available, the Funds’ Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. and information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.When available, Form N-Q may be obtained upon request and without charge by calling 1-800-526-7384 (for Retail Shareholders) or 1-800-621-2550 (for Institutional Shareholders). The Goldman Sachs Tollkeeper^SM and Real Estate Securities Funds may invest in foreign securities, which may be more volatile and less liquid than investment in U.S. securities and will be subject to the risks of currency fluctuations and sudden economic or political developments. At times, the Funds may be unable to sell certain of their portfolio securities without a substantial drop in price, if at all. The Goldman Sachs Tollkeeper^SM and Real Estate Securities Funds may participate in the Initial Public Offering (IPO) market, and a portion of the Funds’ returns consequently may be attributable to its investment in IPOs. The market value of IPO shares may fluctuate considerably due to factors such as the absence of a prior public market, unseasoned trading, and the small number of shares available for trading and limited information about the issuer. When a fund’s asset base is small, IPOs may have a magnified impact on the fund’s performance. As a fund ’s assets grow, it is probable that the effect of the fund’s investment in IPOs on its total returns may not be as significant, which could reduce the fund’s performance. Holdings and allocations shown may not be representative of current or future investments. Holdings and allocations may not include the Fund’s entire investment portfolio, which may change at any time. Fund holdings should not be relied on in making investment decisions and should not be construed as research or investment advice regarding particular securities. Goldman Sachs Tollkeeper Fund^SM and CORE^SM are registered service marks of Goldman, Sachs & Co. This material is not authorized for distribution to prospective investors unless preceded or accompanied by a current Prospectus. Please consider a Fund’s objectives, risks, and charges and expenses, and read the Prospectus carefully before investing. The Prospectus contains this and other information about the Funds. Copyright 2006 Goldman, Sachs & Co. All rights reserved. Date of first use: March 1, 2006 06-308 SPECAR / 86.0K / 03-06