EX-99.17.R

Investment Abbreviations:

Real Estate Investment Trust

Separate Trading of Registered Interest and Principal of Securities

EX-99.17.R 26 e27325exv99w17wr.htm EX-99.17.R: GOLDMAN SACHS ANNUAL REPORT EX-99.17.R

Goldman Sachs Funds


SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS	Annual Report October 31, 2006


		Current income potential from portfolios that invest in a variety of fixed income securities.

Goldman Sachs Single/Multi-Sector
Taxable Fixed Income Funds


n	GOLDMAN SACHS GOVERNMENT INCOME FUND

n	GOLDMAN SACHS U.S. MORTGAGES FUND

n	GOLDMAN SACHS CORE FIXED INCOME FUND

n	GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

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

The Goldman Sachs U.S. Mortgages Fund’s investment in mortgage-backed securities (MBS) is subject to prepayment risk, the risk that in a declining interest rate environment the Fund’s underlying mortgages may be prepaid, causing the Fund to have to reinvest at lower interest rates. This risk may result in greater share price volatility than a fixed income fund not invested in MBS. The guarantee on U.S. government securities applies only to the underlying securities of the Fund if held to maturity and not to the value of the Fund’s shares. The Fund may make substantial investments in derivative instruments, including options, financial futures, Eurodollar futures contracts, swaps, options on swaps, structured securities and other derivative investments. Derivative instruments may involve a high degree of financial risk. These risks include the risk that a small movement in the price of the underlying security or benchmark may result in a disproportionately large movement, unfavorable or favorable, in the price of the derivative instrument; risks of default by a counterparty; and the risks that transactions may not be liquid. Investments in fixed income securities are subject to the risks associated with debt securities including credit and interest rate risk.



NOT FDIC-INSURED	May Lose Value	No Bank Guarantee

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

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

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

What Distinguishes Goldman Sachs’
Fixed Income Investment Process?

At Goldman Sachs Asset Management (“GSAM”), the goal of our fixed income investment process is to provide consistent, strong performance by actively managing our portfolios within a research-intensive, risk-managed framework.



		A key element of our fixed income investment philosophy is to evaluate the broadest global opportunity set to capture relative value across sectors and instruments. Our globally integrated investment process involves managing dynamically along the risk/return spectrum, as we continue to develop value-added strategies through: n Assess relative value among sectors (such as mortgages and corporates) and sub-sectors n Leverage the vast resources of Goldman Sachs in selecting securities for each portfolio n Team approach to decision making n Manage risk by avoiding significant sector and interest rate bets n Careful management of yield curve strategies — while closely managing portfolio duration Fixed Income portfolios that: n Include domestic and global investment options, income opportunities, and access to areas of specialization n Capitalize on GSAM’s industry-renowned credit research capabilities n Use a risk-managed framework to seek total return, recognizing the importance of investors’ capital accumulation goals as well as their need for income

PORTFOLIO RESULTS

Government Income Fund

Dear Shareholder:

This report provides an overview on the performance of the Goldman Sachs Government Income Fund during the
one-year reporting period that ended October 31, 2006.

Performance Review


	Over the one-year period that ended October 31, 2006, the Fund’s Class A, B, C, Institutional and Service Shares generated cumulative total returns, without sales charges, of 4.40%, 3.62%, 3.63%, 4.86% and 4.27%, respectively. These returns compare to the 5.12% cumulative total return of the Fund’s benchmark, the Lehman Brothers Government/ Mortgage Index, over the same time period.


	A combination of top-down and bottom-up strategies impacted the Fund’s performance relative to its benchmark. We maintained a defensive posture over the period, positioning the Fund to have a shorter duration versus its benchmark in anticipation of higher interest rates. This strategy contributed to returns as interest rates rose over the period. With regards to our cross-sector strategies, we continued to underweight the Fund’s mortgage exposure relative to the benchmark based on negative fundamentals in the mortgage market. Our mortgage underweight detracted from relative performance as the mortgage sector outperformed over the period. However, our security selection within mortgages helped to somewhat offset the negative impact from our mortgage underweight. In particular, selection of securities with less exposure to volatility, such as high quality floating rate adjustable rate mortgages (“ARMs”), contributed to relative performance. The Fund’s holdings of Treasury Inflation Protected Securities (“TIPS”) and select asset-backed auto securities also modestly detracted from the Fund’s performance relative to its benchmark. Offsetting this was the positive impact from our continued emphasis on short-dated agency securities.

Market Review

A number of continuing themes characterized the 12-month period that ended October 31, 2006. The Federal Reserve Board (the “Fed”) continued to raise interest rates in six more 25 basis point moves, bringing the targeted federal funds rate to 5.25%. Following the hike in rates, yields rose across the Treasury curve. However, short-term yields rose more dramatically than did long-term yields, leading to a further flattening of the yield curve. In the early part of the period, there was a rise in consumer confidence and strong manufacturing data. The latter half of the period was characterized by a slowdown in the housing market and moderating commodity prices, which lessened inflationary concerns and prompted the Fed to pause its tightening policy. During the reporting period, the 10-year Treasury yield rose five basis points, ending the period at 4.60%. Investment grade sectors continued to post strong outperformance relative to Treasuries over the reporting period, with the mortgage sector generating the best results. Credit spreads also tightened, supported by strong fundamentals and continued corporate profit growth.

PORTFOLIO RESULTS

Investment Objective


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

Investment Strategies


	The Fund seeks to meet its objective by investing at least 80% of its net assets in U.S. government securities and in repurchase agreements collateralized by these securities, and in other securities of the highest credit quality. The Fund uses derivatives, including, but not limited to, Treasury futures, Eurodollar futures and swaps, primarily, as a tool to manage interest rate exposure, volatility, term structure, convexity (the rate of change in the portfolio’s duration as yields change), and sector exposure. The Fund may also use derivatives to express our interest rate outlook.

	We believe that using derivatives, including both futures and swaps, in the portfolio has been an effective portfolio management tool. Futures have been efficiently employed to hedge duration (interest rate sensitivity) drift that may occur due to the passage of time, changing interest rates or changing mortgage durations. In addition, we believe that futures allowed us to optimize security selection by giving us the flexibility to select the most attractive securities for the portfolio, regardless of the securities maturity/duration. Finally, futures and swaps were important tools in implementing certain interest rate and spread views.

Portfolio Composition


	Over the period, the Fund’s investment strategy continued to focus on sectors and securities that we believed would generate a competitive total rate of return relative to the benchmark. As relative valuations changed over the period, we tactically adjusted the Fund’s exposures to take advantage of emerging opportunities. For example, we reduced the Fund’s Government exposure in favor of mortgage-backed securities that we felt offered more compelling relative values. We also took advantage of opportunities to add value in security-specific trades. In particular, we have been finding value in AAA rated ARMs and commercial mortgage-backed securities (“CMBS”). At the end of the reporting period, the Fund’s largest sector weight was in mortgage-backed securities. During the period, we maintained a short duration position relative to the Index based on the belief that interest rates would move higher.


	We thank you for your investment and look forward to your continued confidence.



	Goldman Sachs U.S. Fixed Income Investment Management Team

	November 20, 2006

FUND BASICS

Government Income Fund

as of October 31, 2006

PERFORMANCE REVIEW


November 1, 2005–	Fund Total Return		Lehman Govt./		30-Day
October 31, 2006	(based on NAV)¹		Mortgage Index²		Standardized Yield³

Class A		4.40%		5.12%		3.98%
Class B		3.62		5.12		3.42
Class C		3.63		5.12		3.42
Institutional		4.86		5.12		4.54
Service		4.27		5.12		4.04


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 assumes the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges.
²	The Lehman Brothers Government/ Mortgage Index, an unmanaged index, does not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an unmanaged index.
³	The 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities industry regulations) earned by the Fund over a 30-day period (ending on the stated month-end date) by the maximum public offering price per share of the Fund on the last day of the period. This number is then annualized. This yield does not necessarily reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders.

STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS⁴


For the period ended 9/30/06	One Year		Five Years		Ten Years		Since Inception		Inception Date

Class A		-1.38%		3.20%		5.36%		5.61%	2/10/93
Class B		-2.65		2.96		5.05		5.12	5/1/96
Class C		1.45		3.38		N/A		4.75	8/15/97
Institutional		3.70		4.58		N/A		5.94	8/15/97
Service		3.12		4.05		5.72⁵		5.87⁵	2/10/93


⁴	The Standardized Total Returns are average annual total returns as of the most recent calendar quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 4.5% for Class A Shares, the assumed contingent deferred sales charge for Class B Shares (5% maximum declining to 0% after six years), and the assumed contingent deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.
⁵	Performance data for Service Shares prior to 8/15/97 (commencement of operations) is that of Class A Shares (excluding the impact of front-end sales charges applicable to Class A Shares since Service Shares are not subject to any sales charges). Performance of Class A Shares in the Fund reflects the expenses applicable to the Fund’s Class A Shares. The fees applicable to Service Shares are different from those applicable to Class A Shares which impact performance ratings and rankings for a class of shares.

The returns represent past performance. Past performance does not guarantee future results. The Fund’s investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. Please visit our Web site at: www.goldmansachsfunds.com 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.

FUND BASICS

SECTOR ALLOCATION⁶

Percentage of Net Assets


⁶	The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term investments represent repurchase agreements. Figures in the above graph may not sum to 100% due to the exclusion of other assets and liabilities.
⁷	“Quasi-governments” include agency securities offered by companies such as Fannie Mae and Freddie Mac, which operate under a government charter. While they have to report to a government regulator, their assets are not explicitly guaranteed by the government and they otherwise operate like any other publicly traded company.

PORTFOLIO RESULTS

U.S. Mortgages Fund

Dear Shareholder,

This report provides an overview on the performance of the Goldman Sachs U.S. Mortgages Fund during the one-year reporting period that ended October 31, 2006.

Performance Review


	Over the one-year period that ended October 31, 2006, the Fund’s Class A, Institutional and Separate Account Institutional Shares generated cumulative total returns, without sales charges, of 5.21%, 5.56% and 5.73%, respectively. These returns compare to the 5.65% cumulative total return of the Fund’s benchmark, the Lehman Brothers Securitized Index, over the same time period.

	Over the period, we continued to target an underweight position in mortgages relative to the benchmark based on historically tight spread levels and low implied volatility. As mortgages outperformed the market during the reporting period, this underweight position detracted from performance. In contrast, our out-of-Index selection of high quality, floating rate adjustable-rate mortgages (“ARMs”), contributed positively to returns. A preference for high quality, floating rate asset-backed securities also enhanced results. The Fund’s performance relative to the benchmark was positively impacted by our short duration bias, as yields generally rose across the curve.

Market Review


	Mortgages posted strong returns over the reporting period, outperforming both equal duration Treasuries and swaps. Spreads finished slightly tighter. Over the period, mortgage volatility rates declined. Fundamentals remain unattractive and implied volatility continues to remain near cyclical lows.

Investment Objective


	The Fund seeks a high level of total return consisting of income and capital appreciation.

Investment Strategies

In seeking to meet the Fund’s investment objective, we invest at least 80% of its net assets in fixed income securities, including U.S. government and collateralized securities. Collateralized securities may include fixed rate pass-throughs, collateralized mortgage obligations (“CMOs”), ARMs, mortgage derivatives and asset-backed securities (“ABS”). To the extent we find them effective instruments to manage the duration of the portfolio, the Fund may employ the use of derivatives, including futures, swaps and Eurodollar futures contracts.

PORTFOLIO RESULTS

We believe that using derivatives, including both futures and swaps, in the portfolio has been an effective portfolio management tool. Futures have been efficiently employed to hedge duration (interest rate sensitivity) drift that may occur due to the passage of time, changing interest rates or changing mortgage durations. In addition, we believe that futures allowed us to optimize security selection by giving us the flexibility to select the most attractive securities for the portfolio, regardless of the securities’ maturity/duration. Finally, futures and swaps were important tools in implementing certain interest rate and spread views.

Portfolio Composition


	The Fund maintained a short duration position relative to its benchmark during the reporting period. Given its underweight position in mortgage pass-throughs, the Fund invested in other collateralized sectors, such as ARMs and CMOs. The Fund added to its government security allocation as a tactical substitute for pass-through exposure. The Fund continues to underweight exposure to fixed rate mortgage-backed security pass-throughs on the back of negative fundamentals. At the end of the reporting period, all of the Fund’s asset-backed security exposure was concentrated in short-term, high quality securities, which we consider to be cash equivalents.

	We thank you for your investment and look forward to your continued confidence.


	Goldman Sachs Fixed Income Investment Management Team

	November 20, 2006

FUND BASICS

U.S. Mortgages Fund

as of October 31, 2006

PERFORMANCE REVIEW


November 1, 2005–	Fund Total Return			Lehman Brothers			30-Day
October 31, 2006	(based on NAV)¹			Securitized Index²			Standardized Yield³

Class A		5.21	%		5.65	%		4.16	%
Institutional		5.56			5.65			4.75
Separate Account Institutional		5.73			5.65			4.79


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 assumes the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges.
²	The Lehman Brothers Securitized Index is an unmanaged composite of asset-backed securities, collateralized mortgage-backed securities and fixed rate mortgage-backed securities. The Index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an unmanaged index.
³	The 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities industry regulations) earned by the Fund over a 30-day period (ending on the stated month-end date) by the maximum public offering price per share of the Fund on the last day of the period. This number is then annualized. This yield does not necessarily reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders.

STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS⁴


For the period ended 9/30/06	One Year			Since Inception			Inception Date

Class A		-0.68	%		2.23	%	11/3/03
Institutional		4.38			4.30		11/3/03
Separate Account Institutional		4.44			4.32		11/3/03

⁴

The Standardized Total Returns are average annual total returns as of the most recent calendar quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 4.5% for Class A Shares. Because Institutional and Separate Account Institutional Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.

FUND BASICS

SECTOR ALLOCATION⁵

Percentage of Net Assets


⁵	The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term investments represent repurchase agreements. Figures in the above graph may not sum to 100% due to the exclusion of other assets and liabilities.
⁶	“Quasi-governments” include agency securities offered by companies such as Fannie Mae and Freddie Mac, which operate under a government charter. While they have to report to a government regulator, their assets are not explicitly guaranteed by the government and they otherwise operate like any other publicly traded company.

PORTFOLIO RESULTS

Core Fixed Income Fund

Dear Shareholder,

This report provides an overview on the performance of the Goldman Sachs Core Fixed Income Fund during the one-year reporting period that ended October 31, 2006.

Performance Review


	Over the one-year period that ended October 31, 2006, the Fund’s Class A, B, C, Institutional and Service Shares generated cumulative total returns, without sales charges, of 4.21%, 3.42%, 3.52%, 4.69% and 4.06%, respectively. These returns compare to the 5.19% cumulative total return of the Fund’s benchmark, the Lehman Brothers Aggregate Bond Index, over the same time period.

	Within our top down currency strategy, our overall positioning relative to the benchmark in the Great Britain pound and New Zealand dollar significantly detracted from performance over the reporting period. Overall our cross-sector strategy also had a negative impact on returns versus the benchmark. In particular, underweight exposures to the corporate and mortgage sectors detracted from performance as the sectors outperformed Treasuries over the period. However, our swap spread exposure enhanced results. Elsewhere, our security selection within mortgages helped performance relative to the benchmark, particularly within mortgage passthroughs, adjustable rate mortgages and mortgage derivatives. Within investment grade corporates, our selection of insurance sector credits, benefited returns versus the benchmark. The Fund’s performance relative to the benchmark was positively impacted by our overall short duration positioning as interest rates rose at the short region of the curve over the period.

Market Review

A number of continuing themes characterized the 12 month period that ended October 31, 2006. The Federal Reserve Board (the “Fed”) continued to raise interest rates in six more 25 basis point moves, bringing the targeted federal funds rate to 5.25%. Following the hike in rates, yields rose across the Treasury curve. However, short-term yields rose more dramatically than did long-term yields, leading to a further flattening of the yield curve. In the early part of the period, there was a rise in consumer confidence and strong manufacturing data. The latter half of the period was characterized by a slowdown in the housing market and moderating commodity prices, which lessened inflationary concerns and prompted the Fed to pause its tightening policy. Within currencies, the Great Britain pound appreciated against the U.S. dollar over the 12-month period. Credit spreads also continued to tighten over the reporting period, as the 10-year Treasury yield rose five basis points, ending the period at 4.60%. Emerging market debt and credit spreads also continued to tighten over the reporting period.

Investment Objective


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

PORTFOLIO RESULTS

Investment Strategies


	In seeking to meet the Fund’s investment objective, we invest at least 80% of its net assets in fixed income securities, including U.S. government, corporate securities, mortgage-backed securities, asset-backed securities and investment grade emerging market debt securities. In addition, to the extent we find them effective instruments to manage the overall duration of the portfolio, the Fund may employ the use of derivatives, including futures, swaps and Eurodollar futures contracts.

	We believe that using derivatives, including both futures and swaps, in the portfolio has been an effective portfolio management tool. Futures have been efficiently employed to hedge duration (interest rate sensitivity) drift that may occur due to the passage of time, changing interest rates or changing mortgage durations. In addition, we believe that futures allowed us to optimize security selection by giving us the flexibility to select the most attractive securities for the portfolio, regardless of the securities’ maturity/duration. Finally, futures and swaps were important tools in implementing certain interest rate and spread views.

Portfolio Composition


	During the period, the Fund continued to hold a short duration position relative to the benchmark based on our belief that rates will trend higher. The Fund increased its underweight in the mortgage sector based on historically tight spread levels and low implied volatility. However, we continued to take advantage of opportunities to add value in security-specific trades. In particular, we favored bonds with less exposure to implied volatility and housing turnover. These included seasoned 15-year mortgage-backed securities, super-senior AAA adjustable-rate mortgage floaters, and super-senior AAA collateralized mortgage-backed securities. The Fund held an underweight to the corporate sector as profit growth has been slowing and companies have been starting to re-lever their balance sheets. Finally, the Fund’s market value exposure to government securities decreased based on our constructive view of other high quality sectors at the shorter end of the curve, such as agencies.


	We thank you for your investment and look forward to your continued confidence.



	Goldman Sachs U.S. Fixed Income Investment Management Team

	November 20, 2006

FUND BASICS

Core Fixed Income Fund

as of October 31, 2006

PERFORMANCE REVIEW


November 1, 2005–	Fund Total Return			Lehman Aggregate			30-Day
October 31, 2006	(based on NAV)¹			Bond Index²			Standardized Yield³

Class A		4.21	%		5.19	%		4.30	%
Class B		3.42			5.19			3.76
Class C		3.52			5.19			3.76
Institutional		4.69			5.19			4.87
Service		4.06			5.19			4.38


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 assumes the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges.
²	The Lehman Brothers Aggregate Bond Index represents an unmanaged diversified portfolio of fixed income securities, including U.S. Treasuries, investment-grade corporate bonds, and mortgage-backed and asset-backed securities. The Index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an unmanaged index.
³	The 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities industry regulations) earned by the Fund over a 30-day period (ending on the stated month-end date) by the maximum public offering price per share of the Fund on the last day of the period. This number is then annualized. This yield does not necessarily reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders.

STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS⁴


For the period ended 9/30/06	One Year			Five Years			Ten Years			Since Inception			Inception Date

Class A		-1.55	%		3.78	%		N/A			5.51	%	5/1/97
Class B		-2.81			3.55			N/A			5.25		5/1/97
Class C		1.28			3.97			N/A			4.99		8/15/97
Institutional		3.35			5.14			6.47	%		6.31		1/5/94
Service		2.94			4.64			5.95			5.89		3/13/96

⁴

The Standardized Total Returns are average annual total returns as of the most recent calendar quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 4.5% for Class A Shares, the assumed contingent deferred sales charge for Class B Shares (5% maximum declining to 0% after six years) and the assumed contingent deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.

FUND BASICS

SECTOR ALLOCATION⁵

Percentage of Net Assets


⁵	The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term investments represent repurchase agreements. Figures in the above graph may not sum to 100% due to the exclusion of other assets and liabilities.

⁶	“Quasi-governments” include agency securities offered by companies such as Fannie Mae and Freddie Mac, which operate under a government charter. While they have to report to a government regulator, their assets are not explicitly guaranteed by the government and they otherwise operate like any other publicly traded company.

PORTFOLIO RESULTS

Investment Grade Credit Fund

Dear Shareholder:

This report provides an overview on the performance of the Goldman Sachs Investment Grade Credit Fund during the one-year reporting period that ended October 31, 2006.

Performance Review


	Over the one-year period that ended October 31, 2006, the Fund’s Class A, Institutional and Separate Account Institutional Shares generated cumulative total returns, without sales charges, of 4.84%, 5.35%, and 5.30%, respectively. These returns compare to the 5.36% cumulative total return of the Fund’s benchmark, the Lehman Brothers U.S. Credit Index, over the same time period.


	The Fund’s overweight to lower quality credits and underweight to higher quality credits were the primary positive contributors to returns for the 12-month reporting period. Investor risk appetite was strong due to solid corporate earnings and a perceived end to the Federal Reserve Board’s (the “Fed’s”) tightening campaign. Security selection and an overweight to property & casualty bonds also enhanced results, as the industry outperformed the Lehman Brothers U.S. Credit Index for the period. The primary detractor from the Fund’s performance was an underweight to corporate credit relative to that of the benchmark. An underweight to emerging market corporates also detracted from returns, as their spreads tightened to almost record levels during the period.

Market Review

The Lehman Brothers U.S. Credit Index returned 5.36% over the trailing twelve-month period ended October 31, 2006, outperforming equal duration Treasuries. Lower quality credits outperformed higher quality credits, with A and BBB rated securities returning 5.36% and 5.59%, respectively. Despite a marked slowdown in the U.S. housing market and an increase in equity shareholder-friendly activity, risk appetite was strong during most of the period. This was due to strong corporate earnings, benign inflation, and the perceived end to the Fed’s raising short-term interest rates. Airlines (+10.3%), consumer services (+9.0%), and tobacco (+8.5%) were the top performing industries, while gaming (-2.5%) was the only industry to post a negative return in the Index for the period.

Investment Objective


	The Fund seeks a high level total return consisting of capital appreciation and income that exceeds the total return of the Lehman Brothers U.S. Credit Index.

PORTFOLIO RESULTS

Investment Strategies


	In seeking to meet the Fund’s investment objective, we invest at least 80% of its net assets in investment grade fixed income securities, primarily corporate securities. The Fund may also invest in U.S. government securities, mortgage-backed securities, asset-backed securities, emerging market securities and non-U.S. dollar securities. In addition, to the extent we find them effective instruments to manage the overall duration of the portfolio, the Fund may employ the use of derivatives, including futures, swaps and Eurodollar futures contracts. The Fund also makes use of currency forwards for the purpose of hedging all non-U.S. dollar exposure back to the base U.S. dollar currency.

	We believe that using derivatives, including both futures and swaps, in the portfolio has been an effective portfolio management tool. Futures have been efficiently employed to hedge duration (interest rate sensitivity) drift that may occur due to the passage of time, or changing interest rates. In addition, we believe that futures allowed us to optimize security selection by giving us the flexibility to select the most attractive securities for the portfolio, regardless of the securities’ maturity/duration. Finally, futures and swaps were important tools in implementing certain interest rate and spread views.

Portfolio Composition


	From a credit quality perspective, the Fund held a down-in-quality bias, reflected through its overweight to BBB-rated bonds versus the benchmark. The Fund continued to hold this position on the belief that lower quality credits still have the potential to benefit from balance sheet deleveraging and, in turn, remain less susceptible to equity shareholder-friendly activities (such as stock repurchases and one-time dividend payouts, which adversely impact bond prices). However, we have recently trimmed this position, as valuations are beginning to appear rich. In terms of sector positioning, the Fund had overweights in the insurance and media-cable securities, while holding underweights in consumer products, brokerage, banks, retail, and technology.


	We thank you for your investment and look forward to your continued confidence.



	Goldman Sachs Fixed Income Investment Management Team

	November 20, 2006

FUND BASICS

Investment Grade Credit Fund

as of October 31, 2006

PERFORMANCE REVIEW


November 1, 2005–	Fund Total Return			Lehman Brothers			30-Day
October 31, 2006	(based on NAV)¹			U.S. Credit Index²			Standardized Yield³

Class A		4.84	%		5.36	%		4.96	%
Institutional		5.35			5.36			5.58
Separate Account Institutional		5.30			5.36			5.64


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 assumes the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges.
²	The Lehman Brothers U.S. Credit Index is an unmanaged index which is unbundled into pure corporates (industrial, utility, and finance, including both U.S. and Non-U.S. corporations) and non-corporates (sovereign, supranational, foreign agencies, and foreign local governments). The Index figures do not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an unmanaged index.
³	The 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities industry regulations) earned by the Fund over a 30-day period (ending on the stated month-end date) by the maximum public offering price per share of the Fund on the last day of the period. This number is then annualized. This yield does not necessarily reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders.

STANDARDIZED AVERAGE ANNUAL TOTAL RETURNS⁴


For the period ended 9/30/06	One Year			Since Inception			Inception Date

Class A		-1.44	%		2.34	%	11/3/03
Institutional		3.57			4.46		11/3/03
Separate Account Institutional		3.62			4.47		11/3/03

⁴

The Standardized Total Returns are average annual total returns as of the most recent calendar quarter-end. They assume reinvestment of all distributions at NAV. These returns reflect a maximum initial sales charge of 4.5% for Class A Shares. Because Institutional and Separate Account Institutional Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.

FUND BASICS

SECTOR ALLOCATION⁵

Percentage of Net Assets


⁵	The percentage shown for each investment category reflects the value of investments in that category as a percentage of net assets. Short-term investments represent repurchase agreements. Figures in the above graph may not sum to 100% due to the exclusion of other assets and liabilities.
⁶	Please refer to the table below for Top Ten Industry Allocations in the corporate sector.

TOP TEN INDUSTRY ALLOCATIONS


Percentage of Net Assets	as of 10/31/06			as of 10/31/05

Banks		21.0	%		23.1	%
Insurance		14.0			10.8
REIT		13.1			7.9
Financial		8.6			7.3
Electric		8.5			5.3
Communications		6.7			12.7
Media		4.2			—
Natural Gas		3.3			4.1
Energy		2.5			1.9
Technology		1.8			0.9

GOLDMAN SACHS GOVERNMENT INCOME FUND

Performance Summary

October 31, 2006 (Unaudited)

The following graph shows the value, as of October 31, 2006, of a $10,000 investment made on November 1, 1996 in Class A Shares (with the maximum sales charge of 4.5%) of the Goldman Sachs Government Income Fund. For comparative purposes, the performance of the Fund’s benchmark, the Lehman Brothers Government/Mortgage Index (“Lehman Gov’t/MBS 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 B, Class C, Institutional and Service Shares will vary from Class A Shares due to differences in fees and loads. In addition to the investment adviser’s decisions regarding issuer/industry investment selection and allocation, other factors may affect Fund performance. These factors include, but are not limited to, Fund operating fees and expenses, portfolio turnover and subscription and redemption cash flows affecting the Fund.

Government Income Fund’s 10 Year Performance

Performance of a $10,000 Investment, Distributions Reinvested November 1, 1996 to October 31, 2006.


Average Annual Total Return through October 31, 2006	Since Inception		Ten Years		Five Years		One Year
Class A (commenced February 10, 1993)
Excluding sales charges		5.97%		5.69%		3.80%		4.40%
Including sales charges		5.61%		5.20%		2.85%		-0.32%

Class B (commenced May 1, 1996)
Excluding contingent deferred sales charges		5.12%		4.89%		3.02%		3.62%
Including contingent deferred sales charges		5.12%		4.89%		2.61%		-1.53%

Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges		4.75%		n/a		3.03%		3.63%
Including contingent deferred sales charges		4.75%		n/a		3.03%		2.59%

Institutional Class (commenced August 15, 1997)		5.95%		n/a		4.22%		4.86%

Service Class (commenced August 15, 1997)		5.41%		n/a		3.69%		4.27%

GOLDMAN SACHS GOVERNMENT INCOME FUND

Schedule of Investments

October 31, 2006


Principal		Interest		Maturity
Amount		Rate		Date		Value
Mortgage-Backed Obligations – 59.2%

Adjustable Rate FHLMC^(a) – 2.1%
$	8,229,530		3.496%		09/01/33	$	7,908,438
	5,702,418		4.583		08/01/35		5,574,518

							13,482,956

Adjustable Rate FNMA^(a) – 4.4%
	17,160,167		5.370		11/25/28		17,171,291
	242,634		4.486		03/01/33		243,873
	4,283,408		3.851		10/01/33		4,249,605
	6,476,914		4.330		01/01/35		6,308,326

							27,973,095

Adjustable Rate GNMA^(a) – 2.3%
	251,798		5.375		06/20/23		253,107
	121,495		4.750		07/20/23		122,392
	125,254		4.750		08/20/23		126,182
	317,859		4.750		09/20/23		320,213
	93,097		5.375		03/20/24		93,648
	860,732		5.375		04/20/24		864,721
	112,847		5.375		05/20/24		113,426
	855,164		5.375		06/20/24		860,650
	459,159		4.750		07/20/24		463,471
	657,685		4.750		08/20/24		664,293
	219,949		4.750		09/20/24		222,025
	240,159		5.125		11/20/24		242,364
	210,139		5.125		12/20/24		211,998
	175,871		5.375		01/20/25		177,328
	92,347		5.375		02/20/25		93,117
	307,073		5.375		05/20/25		309,404
	197,888		4.750		07/20/25		200,051
	136,715		5.375		02/20/26		137,604
	5,755		4.750		07/20/26		5,810
	360,737		5.375		01/20/27		363,818
	126,373		5.375		02/20/27		127,222
	1,039,761		5.375		04/20/27		1,046,180
	114,205		5.375		05/20/27		114,806
	131,934		5.375		06/20/27		132,618
	35,583		5.125		11/20/27		35,839
	153,783		5.125		12/20/27		154,883
	309,731		5.375		01/20/28		311,976
	116,123		5.250		02/20/28		116,400
	116,048		5.375		03/20/28		116,850
	853,776		4.500		07/20/29		855,645
	318,126		4.500		08/20/29		318,824
	137,355		4.500		09/20/29		137,710
	373,869		5.125		10/20/29		377,169
	467,053		5.125		11/20/29		471,355
	128,195		5.125		12/20/29		129,337
	178,577		5.250		01/20/30		179,241
	89,016		5.250		02/20/30		89,346
	317,139		5.250		03/20/30		318,299
	578,142		5.375		04/20/30		582,543
	1,473,227		5.375		05/20/30		1,485,152
	131,968		5.375		06/20/30		132,803
	1,102,617		4.500		07/20/30		1,108,990
	149,600		4.500		09/20/30		150,478
	328,440		4.875		10/20/30		328,896

							14,668,184

Adjustable Rate Non-Agency^(a) – 7.3%
Bear Stearns Adjustable Rate Mortgage Trust Series 2003-5, Class 1A1
	116,362		5.969		08/25/33		117,928
Countrywide Alternative Loan Trust Series 2005-59, Class 1A1
	4,881,808		5.660		11/20/35		4,897,938
Countrywide Home Loans Series 2003-37, Class 1A1
	148,854		5.875		08/25/33		148,610
Countrywide Securities Corp. Series 2006-OA19, Class A1
	6,500,000		5.525		12/25/46		6,500,000
CS First Boston Mortgage Securities Corp. Series 2003-AR9, Class 2A2
	505,224		5.100		03/25/33		502,917
Harborview Mortgage Loan Trust Series 2005-10, Class 2A1A
	1,547,678		5.630		11/19/35		1,552,407
Harborview Mortgage Loan Trust Series 2005-16, Class 2A1A
	1,860,976		5.560		01/19/36		1,866,055
Impac CMB Trust Series 2004-8, Class 1A
	1,299,583		5.680		10/25/34		1,307,083
Master Adjustable Rate Mortgages Trust Series 2004-9, Class 2A1
	457,573		5.700		11/25/34		459,938
MLCC Mortgage Investors, Inc. Series 2004-E, Class A2B
	3,115,908		5.780		11/25/29		3,117,854
Sequoia Mortgage Trust Series 2004-09, Class A2
	1,975,951		5.799		10/20/34		1,981,681
Structured Adjustable Rate Mortgage Loan Series 2004-1, Class 3A3
	240,556		4.655		02/25/34		244,594
Structured Adjustable Rate Mortgage Loan Series 2004-5, Class 1A
	2,189,423		4.47		05/25/34		2,189,461
Structured Asset Securities Corp. Series 2003-24A, Class 1A3
	1,182,147		5.000		07/25/33		1,185,824
Structured Asset Securities Corp. Series 2003-34A, Class 3A3
	1,832,474		4.700		11/25/33		1,825,952
Washington Mutual Series 2005-AR11, Class A1A
	4,454,170		5.640		08/25/45		4,467,390
Washington Mutual Series 2006-AR13, Class 1A
	4,370,814		5.544		10/25/46		4,369,278
Wells Fargo Mortgage Backed Securities Trust Series 2005-AR16, Class 1A1
	5,923,106		4.977		10/25/35		5,929,933
Wells Fargo Mortgage Backed Securities Trust Series 2006-AR10, Class 5A3
	3,809,179		5.606		07/25/36		3,800,145

							46,464,988

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

GOLDMAN SACHS GOVERNMENT INCOME FUND


Principal		Interest		Maturity
Amount		Rate		Date		Value
Mortgage-Backed Obligations – (continued)

CMBS – 3.4%
Interest Only^(a)(b) – 0.4%
Bear Stearns Commercial Mortgage Securities, Inc. Series 2003-T10, Class X2^(c)
$	19,672,041		1.42%		03/13/40	$	781,094
CS First Boston Mortgage Securities Corp. Series 2003-C3, Class ASP^(c)
	12,736,999		1.765		05/15/38		564,906
JP Morgan Chase Commercial Mortgage Securities Corp. Series 2004-C1, Class X2^(c)
	21,988,469		1.17		01/15/38		680,616
Prudential Commercial Mortgage Trust Series 2003-PWR1, Class X2^(c)
	23,010,567		1.66		02/11/36		1,057,055

							3,083,671

Sequential Fixed Rate – 3.0%
CS First Boston Mortgage Securities Corp. Series 1997-C2, Class A3
	561,654		6.550		01/17/35		566,773
First Union National Bank Commercial Mortgage Trust Series 2000-C2, Class A2
	9,500,000		7.202		10/15/32		10,104,993
GMAC Commercial Mortgage Securities, Inc. Series 2002-C1, Class A2
	8,000,000		6.278		11/15/39		8,356,382

							19,028,148

TOTAL CMBS							22,111,819

CMO – 6.4%
Interest Only^(b) – 0.1%
Countrywide Home Loan Trust Series 2003-42, Class 2X1^(a)
	961,853		0.368		10/25/33		4,701
CS First Boston Mortgage Securities Corp. Series 2003-11, Class 1A2
	155,952		5.500		06/25/33		9,912
CS First Boston Mortgage Securities Corp. Series 2003-AR18, Class 2X^(a)
	293,502		0.782		07/25/33		1,931
CS First Boston Mortgage Securities Corp. Series 2003-AR20, Class 2X^(a)
	331,681		0.605		08/25/33		2,120
FNMA Series 151, Class 2
	29,444		9.500		07/25/22		7,876
FNMA Series 2004-47, Class EI^(a)
	3,805,708		0.000		06/25/34		153,774
FNMA Series 2004-62, Class DI^(a)
	1,675,304		0.000		07/25/33		68,578
FNMA Series 2004-71, Class DI^(a)
	2,828,514		0.000		04/25/34		73,841
Master Adjustable Rate Mortgages Trust Series 2003-2, Class 3AX^(a)
	105,047		0.679		08/25/33		890
Master Adjustable Rate Mortgages Trust Series 2003-2, Class 4AX^(a)
	37,305		1.158		07/25/33		660
Washington Mutual Series 2003-AR04, Class X1^(a)
	2,406,096		1.181		01/25/08		26,923
Washington Mutual Series 2003-AR07, Class X^(a)
	1,361,986		0.940		06/25/08		14,424
Washington Mutual Series 2003-AR12, Class X^(a)
	5,991,240		0.488		02/25/34		41,955

							407,585

Inverse Floaters^(a) – 0.1%
GNMA Series 2001-48, Class SA
	98,564		9.198		10/16/31		111,828
GNMA Series 2001-51, Class SA
	78,557		9.447		10/16/31		90,571
GNMA Series 2001-51, Class SB
	98,581		9.198		10/16/31		111,124
GNMA Series 2001-59, Class SA
	84,624		9.035		11/16/24		96,033
GNMA Series 2002-13, Class SB
	336,391		12.740		02/16/32		420,300

							829,856

PAC – 0.3%
FHLMC Series 2590, Class NV
	2,000,000		5.000		03/15/18		1,973,820

Principal Only^(d) – 1.2%
FHLMC Series 235, Class PO
	4,778,298		0.000		02/01/36		3,544,864
FNMA REMIC Trust Series G-35, Class N
	24,871		0.000		10/25/21		20,136
FNMA Series 363, Class 1
	5,144,881		0.000		11/01/35		3,854,501

							7,419,501

Regular Floater CMO^(a) – 0.0%
FHLMC Series 1760, Class ZB
	284,527		4.110		05/15/24		276,506

Sequential Fixed Rate – 4.7%
Banc of America Commercial Mortgage, Inc. Series 2005-6, Class A4
	10,000,000		5.354		09/10/47		9,967,196
Citigroup/Deutsche Bank Commercial Mortgage Trust^(a)
	10,000,000		5.226		07/15/44		10,007,509
FHLMC Series 2329, Class ZA
	5,512,564		6.500		06/15/31		5,684,368
FNMA REMIC Trust Series 1993-78, Class H
	34,802		6.500		06/25/08		34,905
FNMA REMIC Trust Series 1994-42, Class ZQ
	3,241,601		7.000		04/25/24		3,359,960
FNMA Series 2001-53, Class GH
	801,083		8.000		09/25/16		845,327

							29,899,265

TOTAL CMO							40,806,533

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

GOLDMAN SACHS GOVERNMENT INCOME FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest		Maturity
Amount		Rate		Date			Value
Mortgage-Backed Obligations – (continued)

FHLMC – 13.0%
$	1,967,808		5.500%		12/01/08		$	1,963,960
	156,164		7.000		06/01/09			157,929
	1,335,342		6.500		12/01/13			1,362,409
	35,195		6.500		02/01/14			35,908
	5,032,578		7.500		11/01/14			5,247,888
	22,294		7.000		02/01/15			22,881
	2,362,233		5.500		07/01/15			2,372,355
	232,488		8.000		07/01/15			244,985
	35,246		7.000		01/01/16			36,153
	88,269		7.000		02/01/16			90,540
	672,913		4.500		05/01/18			651,540
	574,287		5.500		05/01/18			575,892
	158,999		4.500		06/01/18			153,960
	3,099,820		5.500		06/01/18			3,108,487
	647,166		4.500		09/01/18			626,655
	470,504		4.500		10/01/18			455,582
	484,979		4.500		11/01/18			469,593
	12,187,542		4.500		12/01/18			11,801,285
	2,475,156		5.000		12/01/18			2,442,130
	176,528		4.500		01/01/19			170,933
	350,732		4.500		03/01/19			339,580
	14,342,903		4.000		06/01/19			13,582,048
	8,796,067		4.500		06/01/19			8,517,296
	707,572		5.000		06/01/19			697,355
	7,097,215		5.000		11/01/19			7,002,511
	974,329		4.500		02/01/20			943,450
	30,769		6.500		08/01/22			31,437
	1,836,691		4.500		10/01/23			1,754,526
	7,134,567		5.500		11/01/23			7,125,840
	22,961		7.500		03/01/27			23,762
	1,188,731		6.500		07/01/28			1,211,671
	6,405,077		6.500		12/01/29			6,573,738
	19,358		8.000		07/01/30			20,247
	58,551		7.500		12/01/30			60,591
	6,163		7.500		01/01/31			6,377
	491,003		7.000		04/01/31			508,536
	295,530		6.500		07/01/31			303,312
	1,985,869		6.000		05/01/33			2,003,965

								82,697,307

FNMA – 20.3%
	5,005,721		6.255		12/01/08			5,065,818
	775,740		5.500		05/01/09			762,265
	593,730		4.500		03/01/13			581,899
	266,076		4.500		05/01/13			260,668
	347,085		4.000		06/01/13			335,812
	557,518		4.500		06/01/13			546,071
	463,946		4.000		07/01/13			448,762
	578,823		4.500		07/01/13			566,814
	641,395		4.000		08/01/13			620,426
	273,230		4.500		08/01/13			267,505
	943,590		4.000		09/01/13			912,525
	1,140,067		4.500		09/01/13			1,115,970
	1,909,758		4.000		10/01/13			1,846,390
	933,294		4.000		04/01/14			900,592
	4,499,828		5.500		09/01/14			4,519,017
	144,503		7.000		03/01/15			147,584
	46,026		8.000		01/01/16			48,294
	759,971		5.000		11/01/17			750,369
	25,299,851		5.000		12/01/17			24,980,229
	4,607,194		5.000		01/01/18			4,548,989
	5,795,184		5.000		02/01/18			5,721,830
	5,099,173		5.000		03/01/18			5,033,502
	684,167		4.500		04/01/18			663,319
	1,851,419		5.000		04/01/18			1,827,575
	3,113,190		4.500		05/01/18			3,018,325
	674,598		5.000		05/01/18			665,911
	5,721,833		4.500		06/01/18			5,547,480
	3,050,756		5.000		06/01/18			3,011,510
	445,628		4.500		07/01/18			432,050
	146,811		5.000		07/01/18			144,921
	12,224,762		4.000		08/01/18			11,611,784
	531,560		4.500		08/01/18			515,362
	126,679		5.000		08/01/18			125,048
	890,326		4.500		09/01/18			863,196
	1,762,087		5.000		09/01/18			1,739,946
	9,070,226		5.000		10/01/18			8,956,254
	4,303,468		5.000		11/01/18			4,248,045
	31,503		4.500		12/01/18			30,543
	1,794,910		5.500		12/01/18			1,801,736
	3,442,630		5.000		04/01/19			3,398,294
	1,126,876		4.500		06/01/19			1,091,473
	3,709,167		5.000		06/01/19			3,661,399
	6,438,166		4.500		10/01/23			6,118,829
	57,064		6.500		10/01/28			58,637
	59,987		6.500		11/01/28			61,637
	25,129		7.500		07/01/29			25,968
	1,858		7.500		08/01/29			1,920
	12,266		7.500		10/01/29			12,675
	69		7.500		01/01/30			71
	3,787		7.500		02/01/30			3,913
	777,212		7.000		07/01/31			799,205
	14,789		6.500		01/01/34			15,155
	5,000,000		7.000		TBA-15yr	^(e)		5,140,625
	4,000,000		7.500		TBA-15yr	^(e)		4,146,248

								129,720,385

TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $379,463,341)							$	377,925,267

Agency Debentures – 18.4%

FFCB
$	6,838,000		4.100%		07/21/08		$	6,745,325
	10,000,000		4.200		02/23/09			9,854,180
	11,000,000		4.450		06/11/09			10,892,200
	7,000,000		7.375		02/09/10			7,539,112
	9,000,000		4.750		11/06/12			8,925,318

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

GOLDMAN SACHS GOVERNMENT INCOME FUND


Principal		Interest			Maturity
Amount		Rate			Date		Value
Agency Debentures – (continued)

FHLB
$	1,000,000		5.680	%^(f)		12/03/07	$	1,005,963
	15,560,000		4.100			06/13/08		15,363,197
	3,900,000		3.500			02/13/09		3,781,017
	1,500,000		7.625			05/14/10		1,631,130
	8,400,000		4.500			09/14/12		8,215,648
FHLMC
	10,390,000		4.250			06/23/08		10,279,409
	11,000,000		4.480			09/19/08		10,906,265
FNMA
	5,000,000		6.625			09/15/09		5,233,724
	1,200,000		6.000			05/15/11		1,254,101
New Valley Generation II
	3,416,362		5.572			05/01/20		3,444,368
Small Business Administration
	574,939		6.700			12/01/16		592,681
	433,271		7.150			03/01/17		450,725
	329,548		7.500			04/01/17		345,040
	195,788		7.300			05/01/17		203,984
	140,645		6.800			08/01/17		145,564
	358,500		6.300			05/01/18		368,207
	356,024		6.300			06/01/18		365,773
Tennessee Valley Authority
	6,000,000		4.875	^(f)		12/15/16		5,993,947
	4,000,000		5.375			04/01/56		4,123,760

TOTAL AGENCY DEBENTURES
(Cost $119,153,443)							$	117,660,638

Asset-Backed Securities – 2.2%

Home Equity^(a) – 2.1%
Carrington Mortgage Loan Trust Series 2005-OPT2, Class A1B
$	1,442,444		5.470%			05/25/35	$	1,442,669
Citigroup Mortgage Loan Trust, Inc. Series 2004-OPT1, Class A2
	1,439,086		5.680			10/25/34		1,439,148
Countrywide Home Equity Loan Trust Series 2004-I, Class A
	1,508,844		5.610			02/15/34		1,513,323
Countrywide Home Equity Loan Trust Series 2004-Q, Class 2A
	1,631,291		5.620			12/15/33		1,635,695
Countrywide Home Equity Loan Trust Series 2005-B, Class 2A
	1,759,147		5.500			05/15/35		1,760,796
Master Asset Backed Securities Trust Series 2005-WMC1, Class A4
	4,563,430		5.510			03/25/35		4,565,269
Popular Asset Backed Securities Mortgage Pass-Through Trust Series 2004-5, Class AV2
	1,019,791		5.660			12/25/34		1,020,907
Securitized Asset Backed Receivables LLC Trust Series 2004-OP2, Class A2
	304,878		5.670			08/25/34		305,216

								13,683,023

Manufactured Housing – 0.1%
Mid-State Trust Series 4, Class A
	292,402		8.330			04/01/30		301,735

TOTAL ASSET-BACKED SECURITIES
(Cost $13,973,576)							$	13,984,758

U.S. Treasury Obligations – 2.7%

United States Treasury Inflation Protected Securities
$	1,887,187		1.875%			07/15/13	$	1,827,475
	3,089,632		2.000			01/15/14		3,011,304
	2,812,290		2.000			07/15/14		2,739,345
	5,031,408		1.875			07/15/15		4,845,497
	308,178		2.000			01/15/16		299,390
	4,644,068		2.500			07/15/16		4,710,826

TOTAL U.S. TREASURY OBLIGATIONS
(Cost $17,533,818)							$	17,433,837

Insured Revenue Bonds – 1.2%

New Jersey Economic Development Authority Series A (MBIA)
$	2,000,000		7.425%			02/15/29	$	2,490,080
Sales Tax Asset Receivable Taxable Series B (FSA)
	5,500,000		3.600			10/15/08		5,349,575

TOTAL INSURED REVENUE BONDS
(Cost $7,500,000)								7,839,655

TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT – 83.7%
(Cost $537,624,178)							$	534,844,155

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

GOLDMAN SACHS GOVERNMENT INCOME FUND

Schedule of Investments (continued)

October 31, 2006

Principal

Interest

Maturity

Amount

Rate

Date

Value

Repurchase Agreement^(g) – 17.6%

Joint Repurchase Agreement Account II

112,200,000

5.316

11/01/06

112,200,000

Maturity Value: $112,216,568

(Cost $112,200,000)

TOTAL INVESTMENTS – 101.3%

(Cost $649,824,178)

647,044,155

LIABILITIES IN EXCESS OF OTHER

ASSETS – (1.3)%

(8,393,301

)

NET ASSETS – 100.0%

638,650,854


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


(a)	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2006.

(b)	Represents security with notional principal amount. The actual effective yield of this security is different than the stated interest rate.

(c)	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Under procedures approved by the Board of Trustees, such securities have been determined to be liquid by the Investment Adviser and may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounts to $3,083,671, which represents approximately 0.5% of net assets as of October 31, 2006.

(d)	Security issued with a zero coupon. Income is recognized through the accretion of discount.

(e)	TBA (To Be Announced) securities are purchased on a forward commitment basis with an approximate principal amount and no defined maturity date. The actual principal and maturity date will be determined upon settlement when the specific mortgage pools are assigned. Total market value of TBA securities amounts to $9,286,873 which represents approximately 1.5% of net assets as of October 31, 2006.

(f)	Securities with “Put” features with resetting interest rates. Maturity dates disclosed are the final maturity dates.

(g)	Joint repurchase agreement was entered into on October 31, 2006. Additional information appears on page 55.



Investment Abbreviations:
CMBS	—	Commercial Mortgage Backed Securities
CMO	—	Collateralized Mortgage Obligations
FFCB	—	Federal Farm Credit Bank
FHLB	—	Federal Home Loan Bank
FHLMC	—	Federal Home Loan Mortgage Corp.
FNMA	—	Federal National Mortgage Association
FSA	—	Insured by Financial Security Assurance Co.
GNMA	—	Government National Mortgage Association
MBIA	—	Insured by Municipal Bond Investors Assurance
PAC	—	Planned Amortization Class
REMIC	—	Real Estate Mortgage Investment Conduit

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

GOLDMAN SACHS GOVERNMENT INCOME FUND

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At October 31, 2006, the following futures contacts were open:


	Number of
	Contracts			Settlement		Market			Unrealized
Type	Long (Short)			Month		Value			Gain (Loss)

Eurodollars		78			December 2006	$	18,453,825		$	(220,677	)
U.S. Treasury Bonds		731			December 2006		82,351,719			1,544,619
2 Year U.S. Treasury Notes		(88	)		December 2006		(17,987,750	)		30,092
5 Year U.S. Treasury Notes		(555	)		December 2006		(58,587,188	)		(118,046	)
10 Year U.S. Treasury Notes		(724	)		December 2006		(78,350,375	)		(752,735	)

TOTAL						$	(54,119,769	)	$	483,253

INTEREST RATE SWAP CONTRACTS — At October 31, 2006, the Fund had outstanding swap contracts with the following terms:


					Rates Exchanged

	Notional				Payments		Payments		Upfront
Swap	Amount		Termination		received by		made by		Payments made		Unrealized
Counterparty	(000s)		Date		the Fund		the Fund		by the Fund		Gain (Loss)

Bank of America Securities LLC	$	20,000		12/27/06		3.427%	3 month LIBOR		$	—	$	68,376
Bank of America Securities LLC		30,000		04/07/08		4.339	3 month LIBOR			—		(370,458	)
Bank of America Securities LLC		35,000		09/02/10		4.309	3 month LIBOR			—		(929,881	)
Bank of America Securities LLC		25,000		10/06/10		4.702	3 month LIBOR			—		(296,180	)
Deutsche Bank Securities^(a)		20,000		12/20/11		5.600	3 month LIBOR			393,569		103,529
Bank of America Securities LLC ^(a)		31,000		12/20/11		5.600	3 month LIBOR			572,997		199,263
Deutsche Bank Securities^(a)		54,600		12/20/13		5.650	3 month LIBOR			1,271,549		553,772
J.P. Morgan Securities, Inc.^(a)		28,000		12/20/13		5.650	3 month LIBOR			527,100		408,688
Bank of America Securities LLC		30,000		12/09/14		4.641	3 month LIBOR			—		(600,069	)
Bank of America Securities LLC		9,000		05/26/15		4.532	3 month LIBOR			—		(272,423	)
J.P. Morgan Securities, Inc.		30,000		03/07/16		3 month LIBOR		5.183%		—		(121,653	)
J.P. Morgan Securities, Inc.^(a)		22,000		12/20/16		5.700	3 month LIBOR			571,560		390,850
Bank of America Securities LLC		43,000		11/04/19		3 month LIBOR		4.865		—		845,011
Bank of America Securities LLC		20,000		11/12/19		3 month LIBOR		5.068		—		(14,427	)
Bank of America Securities LLC		13,200		04/09/35		5.265	3 month LIBOR			—		9,249

TOTAL									$	3,336,775	$	(26,353	)


(a)	Represents forward starting interest rate swaps whose effective dates of commencement of accruals and cash flows occur subsequent to October 31, 2006.

LIBOR — London Interbank Offered Rate

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

GOLDMAN SACHS U.S. MORTGAGES FUND

Performance Summary

October 31, 2006 (Unaudited)

The following graph shows the value, as of October 31, 2006, of a $10,000 investment made on November 3, 2003 (commencement of operations) in the Separate Account Institutional Shares of the Goldman Sachs U.S. Mortgages Fund. For comparative purposes, the performance of the Fund’s benchmark, the Lehman Brothers Securitized Index (the “Lehman Securitized 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 and Institutional Shares will vary from Separate Account Institutional Shares due to differences in fees and loads. In addition to the investment adviser’s decisions regarding issuer/ industry investment selection and allocation, other factors may affect Fund performance. These factors include, but are not limited to, Fund operating fees and expenses, portfolio turnover and subscription and redemption cash flows affecting the Fund.

U.S. Mortgages Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested November, 3, 2003 to October 31, 2006.


Average Annual Total Return through October 31, 2006	Since Inception		One Year
Class A (commenced November 3, 2003)
Excluding sales charges		3.92%		5.21%
Including sales charges		0.50%		2.34%

Institutional Class (commenced November 3, 2003)		4.36%		5.56%

Separate Account Institutional (commenced November 3, 2003)		4.42%		5.73%

GOLDMAN SACHS U.S. MORTGAGES FUND

Schedule of Investments

October 31, 2006


Principal		Interest			Maturity
Amount		Rate			Date		Value

Mortgage-Backed Obligations – 104.2%

Adjustable Rate FHLMC^(a) – 0.2%
$	984,932		4.263	%		04/01/33	$	971,621

Adjustable Rate FNMA^(a) – 3.9%
	40,431		5.134			07/01/22		40,764
	57,669		5.427			07/01/27		57,962
	108,870		5.427			11/01/27		109,422
	18,135		5.427			01/01/31		18,276
	22,800		5.427			06/01/32		23,114
	42,598		5.134			08/01/32		42,848
	4,156,888		4.482			05/01/33		4,101,509
	115,143		5.134			05/01/33		115,660
	802,181		4.847			06/01/33		803,057
	2,570,045		3.851			10/01/33		2,549,763
	943,572		4.389			12/01/33		934,127
	1,721,267		4.602			08/01/34		1,694,526
	6,017,852		4.572			02/01/35		5,918,202
	51,093		5.427			11/01/35		51,461
	233,325		5.427			12/01/37		235,030
	101,182		5.427			01/01/38		101,925
	78,920		5.427			11/01/40		79,506

								16,877,152

Adjustable Rate GNMA^(a) – 1.7%
	108,731		5.375			06/20/23		109,296
	53,998		4.750			07/20/23		54,396
	55,669		4.750			08/20/23		56,081
	141,271		4.750			09/20/23		142,317
	40,201		5.375			03/20/24		40,439
	371,679		5.375			04/20/24		373,403
	48,730		5.375			05/20/24		48,980
	369,276		5.375			06/20/24		371,644
	204,071		4.750			07/20/24		205,987
	292,305		4.750			08/20/24		295,242
	97,755		4.750			09/20/24		98,678
	103,705		5.125			11/20/24		104,657
	90,742		5.125			12/20/24		91,545
	75,944		5.375			01/20/25		76,573
	39,877		5.375			02/20/25		40,209
	132,600		5.375			05/20/25		133,606
	87,950		4.750			07/20/25		88,912
	59,036		5.375			02/20/26		59,420
	2,558		4.750			07/20/26		2,582
	155,772		5.375			01/20/27		157,103
	54,570		5.375			02/20/27		54,937
	448,987		5.375			04/20/27		451,759
	49,316		5.375			05/20/27		49,575
	56,972		5.375			06/20/27		57,267
	15,015		5.125			11/20/27		15,122
	66,406		5.125			12/20/27		66,881
	133,748		5.375			01/20/28		134,717
	51,610		5.250			02/20/28		51,733
	50,112		5.375			03/20/28		50,458
	379,456		4.500			07/20/29		380,287
	141,389		4.500			08/20/29		141,700
	61,047		4.500			09/20/29		61,204
	161,443		5.125			10/20/29		162,869
	201,682		5.125			11/20/29		203,540
	55,357		5.125			12/20/29		55,850
	79,367		5.250			01/20/30		79,663
	39,563		5.250			02/20/30		39,709
	140,951		5.250			03/20/30		141,466
	249,653		5.375			04/20/30		251,552
	636,167		5.375			05/20/30		641,317
	56,986		5.375			06/20/30		57,347
	490,052		4.500			07/20/30		492,884
	66,489		4.500			09/20/30		66,879
	141,826		4.875			10/20/30		142,023
	671,049		4.500			12/20/34		668,698

								7,070,507

Adjustable Rate Non-Agency^(a) – 18.5%
American Home Mortgage Investment Trust Series 2004-3, Class 1A
	166,911		5.690			10/25/34		167,272
Bear Stearns Alt-A Trust Series 2004-3, Class A1
	230,880		5.640			04/25/34		231,043
Bear Stearns Mortgage Funding Trust Series 2006-AR2, Class 1A1
	4,494,111		5.520			09/25/36		4,494,111
Countrywide Alternative Loan Trust Series 2005-38, Class A3
	3,266,021		5.670			09/25/35		3,278,566
Countrywide Alternative Loan Trust Series 2005-51, Class 1A1
	2,310,424		5.640			11/20/35		2,320,973
Countrywide Alternative Loan Trust Series 2005-59, Class 1A1
	2,219,004		5.660			11/20/35		2,226,336
Countrywide Securities Corp. Series 2006-OA19, Class A1
	4,250,000		5.525			12/25/46		4,250,000
Harborside Mortgage Loan Trust Capital Series 2006-12, Class 2A2A
	5,000,000		5.500			12/19/45		5,000,000
Harborview Mortgage Loan Trust Series 2005-15, Class 2A11
	2,071,192		5.590			10/20/45		2,077,280
Harborview Mortgage Loan Trust Series 2005-16, Class 2A1A
	1,240,651		5.560			01/19/36		1,244,037
Impac CMB Trust Series 2004-6, Class 1A2
	878,335		5.710			10/25/34		879,887
Impac CMB Trust Series 2004-8, Class 1A
	487,344		5.680			10/25/34		490,156
Impac CMB Trust Series 2005-6, Class 1A1
	3,624,215		5.570			10/25/35		3,626,820
Impac Secured Assets Corp. Series 2004-3, Class 1A4
	387,409		5.720			11/25/34		388,418
Impac Secured Assets Corp. Series 2005-2, Class A1W
	4,170,415		5.570			03/25/36		4,175,546
Lehman XS Trust Series 2005-5N, Class 3A1A
	2,732,411		5.620			11/25/35		2,734,745
Lehman XS Trust Series 2006-2N, Class 1A1
	3,455,355		5.580			02/25/46		3,462,019
Mortgage IT Trust Series 2005-5, Class A1
	1,726,502		5.590			12/25/35		1,728,223
Sequoia Mortgage Trust Series 2004-09, Class A2
	1,215,970		5.799			10/20/34		1,219,496

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

GOLDMAN SACHS U.S. MORTGAGES FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)

Adjustable Rate Non-Agency^(a) – (continued)
Structured Adjustable Rate Mortgage Loan Series 2004-6, Class 3A2
$	1,529,398		4.725	%		06/25/34	$	1,519,250
Structured Adjustable Rate Mortgage Loan Series 2004-19, Class 2A2
	385,836		6.827			01/25/35		390,911
Structured Asset Mortgage Investments, Inc. Series 2006-AR8, Class AR8
	3,500,000		5.520			03/25/36		3,500,000
Structured Asset Securities Corp. Series 2003-34A, Class 3A3
	91,624		4.700			11/25/33		91,298
Structured Asset Securities Corp. Series 2003-37A, Class 3A7
	343,877		4.520			12/25/33		341,479
UBS Warburg LLC Series 2006-0A2, Class 4A1
	2,879,287		5.640			11/25/46		2,877,938
Washington Mutual Series 2005-AR11, Class A1A
	2,545,240		5.640			08/25/45		2,552,794
Washington Mutual Series 2005-AR13, Class A1A1
	3,527,141		5.610			10/25/45		3,546,704
Washington Mutual Series 2006-AR13, Class 1A
	2,921,017		5.544			10/25/46		2,919,990
Washington Mutual Series 2006-AR17, Class 1A
	2,000,000		5.504			11/25/46		2,000,000
Wells Fargo Mortgage Backed Securities Trust Series 2005-AR16, Class 1A1
	2,961,553		4.977			10/25/35		2,964,967
Wells Fargo Mortgage Backed Securities Trust Series 2006-AR2, Class 2A3
	6,488,742		5.092			03/25/36		6,450,992
WMALT Mortgage Pass-Through Certificates Series 2006-AR7, Class A1A
	2,841,328		5.584			09/25/46		2,845,212
WMALT Mortgage Pass-Through Certificates Series 2006-AR9, Class 2A
	4,000,000		5.504			11/25/46		4,000,000

								79,996,463

CMBS – 9.8%
Interest Only^(a)(b)(c) – 0.2%
Bear Stearns Commercial Mortgage Securities, Inc. Series 2003-T10, Class X2
	5,559,490		1.246			03/13/40		220,744
JP Morgan Chase Commercial Mortgage Securities Corp. Series 2004-C1, Class X2
	5,774,749		0.993			01/15/38		178,748
Prudential Commercial Mortgage Trust Series 2003-PWR1, Class X2
	6,078,263		1.481			02/11/36		279,222

								678,714

Sequential Fixed Rate – 9.6%
Banc of America Commercial Mortgage, Inc. Series 2005-5, Class A4
	4,000,000		5.115			10/10/45		3,951,388
Banc of America Commercial Mortgage, Inc. Series 2005-6, Class A4
	5,000,000		5.182			09/10/47		4,983,598
Banc of America Commercial Mortgage, Inc. Series 2006-4 Class A4
	2,000,000		5.634			07/10/46		2,049,548
Bear Stearns Commercial Mortgage Securities, Inc. Series 2005-PW10, Class A4
	5,000,000		5.405			12/11/40		5,040,281
Citigroup/Deutsche Bank Commercial Mortgage Trust Series 2006-C02, Class A4
	3,500,000		5.362			01/15/46		3,531,692
CS First Boston Mortgage Securities Corp. Series 1997-C2, Class A3
	313,590		6.550			01/17/35		316,448
GE Capital Commercial Mortgage Corp. Series 2005-C4, Class A4
	5,000,000		5.333			11/10/45		5,037,887
LB-UBS Commercial Mortgage Trust Series 2002-C1, Class A2
	313,797		5.969			03/15/26		314,520
LB-UBS Commercial Mortgage Trust Series 2005-C5, Class A4
	2,000,000		4.954			09/15/30		1,957,071
LB-UBS Commercial Mortgage Trust Series 2005-C7, Class A4
	2,000,000		5.197			11/15/30		1,989,874
LB-UBS Commercial Mortgage Trust Series 2006-C1, Class A4
	3,500,000		5.156			02/15/31		3,458,165
Morgan Stanley Capital I Series 2006-T21, Class A4
	5,000,000		5.162			10/12/52		4,955,370
Wachovia Bank Commercial Mortgage Trust Series 2005-C21, Class A4
	4,000,000		5.196			10/15/44		3,992,846

								41,578,688

TOTAL CMBS								42,257,402

CMO – 4.6%
Interest Only^(b) – 0.1%
ABN AMRO Mortgage Corp. Series 2003-5, Class A2
	64,516		5.500			04/25/33		6,446
ABN AMRO Mortgage Corp. Series 2003-8, Class A2
	423,512		5.500			06/25/33		45,823
Countrywide Home Loan Trust Series 2003-42, Class 2X1^(a)
	627,295		0.368			10/25/33		3,066
CS First Boston Mortgage Securities Corp. Series 2002-AR31, Class 5X^(a)
	317,037		0.000			11/25/32		190
CS First Boston Mortgage Securities Corp. Series 2003-08, Class 3A2
	9,142		5.500			04/25/33		498
CS First Boston Mortgage Securities Corp. Series 2003-10, Class 3A13
	7,838		5.750			05/25/33		307

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

GOLDMAN SACHS U.S. MORTGAGES FUND


Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)

Interest Only^(b) – (continued)
CS First Boston Mortgage Securities Corp. Series 2003-11, Class 1A2
$	31,190		5.500	%		06/25/33	$	1,982
CS First Boston Mortgage Securities Corp. Series 2003-19, Class 1A2
	489,606		5.250			07/25/33		51,847
FHLMC Series 2575, Class IB
	281,178		5.500			08/15/30		27,902
FNMA Series 2004-47, Class EI^(a)
	1,709,811		0.000			06/25/34		69,087
FNMA Series 2004-62, Class DI^(a)
	744,580		0.000			07/25/33		30,479
FNMA Series E, Class E2
	1,298		506.000			09/01/10		10,002
Master Adjustable Rate Mortgages Trust Series 2003-2, Class 3AX^(a)
	70,031		0.679			08/25/33		594
Master Adjustable Rate Mortgages Trust Series 2003-2, Class 4AX^(a)
	18,653		1.158			07/25/33		330
Washington Mutual Series 2003-AR04, Class X1^(a)
	401,016		1.181			01/25/08		4,487
Washington Mutual Series 2003-AR12, Class X^(a)
	1,012,034		0.488			02/25/34		7,087
Washington Mutual Series 2003-S3, Class 1A41
	341,172		5.500			06/25/33		35,032

								295,159

Inverse Floaters^(a) – 0.0%
FHLMC Series 1544, Class M
	11,092		11.206			07/15/08		11,409
FNMA Series 1993-072, Class SA
	2,481		9.123			05/25/08		2,548
FNMA Series 1993-093, Class SA
	5,271		11.994			05/25/08		5,495
FNMA Series 1993-095, Class SE
	6,553		12.303			06/25/08		6,867
FNMA Series 1993-135, Class S
	15,195		6.500			07/25/08		15,557
GNMA Series 2001-48, Class SA
	32,855		9.165			10/16/31		37,276
GNMA Series 2001-51, Class SB
	32,860		9.197			10/16/31		37,041
GNMA Series 2001-59, Class SA
	48,580		9.035			11/16/24		55,130

								171,323

PAC – 1.1%
FNMA Series 1993-63, Class PK
	26,515		6.500			05/25/08		26,579
FNMA Series 2003-88, Class TH
	5,000,000		4.500			09/25/18		4,760,476

								4,787,055

Principal Only^(d) – 0.8%
FHLMC Series 235, Class PO
	2,198,017		0.000			02/01/36		1,630,638
FNMA Series 363, Class 1
	2,296,822		0.000			11/01/35		1,720,759

								3,351,397

Sequential Fixed Rate – 2.6%
CS First Boston Mortgage Securities Corp. Series 2002-5, Class PPA1
	211,614		6.500			03/25/32		210,726
FHLMC Series 1703, Class GC
	2,500,000		6.500			04/15/09		2,510,885
FHLMC Series 1823, Class A
	1,282,867		6.500			08/15/23		1,290,491
FHLMC Series 2042, Class N
	967,761		6.500			03/15/28		989,660
FHLMC Series 2458, Class OD
	128,878		6.000			04/15/16		129,001
FHLMC Series 2590, Class NV
	1,000,000		5.000			03/15/18		986,910
FNMA REMIC Trust Series 1993-101, Class PJ
	305,403		7.000			06/25/08		306,812
FNMA REMIC Trust Series 2002-24, Class AE
	434,262		6.000			04/25/16		432,993
FNMA Series 1993-76, Class PJ
	75,779		6.000			06/25/08		75,771
FNMA Series 1994-42, Class K
	3,000,000		6.500			04/25/24		3,042,282
FNMA Series 1994-75, Class J
	20,859		7.000			10/25/23		20,795
FNMA Series 2000-16, Class ZG
	1,311,994		8.500			06/25/30		1,403,150

								11,399,476

TOTAL CMO								20,004,410

FHLMC – 27.2%
	307,624		5.000			12/01/12		305,919
	28,896		7.000			04/01/15		29,537
	26,532		7.000			02/01/16		27,215
	132,573		6.000			03/01/16		134,078
	448,608		4.500			05/01/18		434,359
	106,000		4.500			06/01/18		102,640
	18,508		4.500			08/01/18		17,922
	431,444		4.500			09/01/18		417,770
	313,669		4.500			10/01/18		303,721
	807,183		4.500			11/01/18		781,592
	9,689,795		4.500			12/01/18		9,382,699
	8,213,490		5.000			12/01/18		8,103,898
	523,299		4.500			01/01/19		506,714
	819,179		5.000			01/01/19		808,248
	21,170		4.500			02/01/19		20,497
	1,002,166		5.000			02/01/19		988,022
	2,269,605		4.500			03/01/19		2,195,034
	776,138		4.000			04/01/19		735,374
	44,884		4.500			04/01/19		43,403

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

GOLDMAN SACHS U.S. MORTGAGES FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount		Rate			Date			Value
Mortgage-Backed Obligations – (continued)

FHLMC – (continued)
$	121,555		5.000	%		04/01/19		$	119,800
	4,870,370		4.500			06/01/19			4,716,015
	707,572		5.000			06/01/19			697,355
	42,377		4.500			11/01/19			40,979
	2,013,631		4.500			02/01/20			1,949,813
	25,091,307		4.500			08/01/20			24,272,008
	5,700,113		5.500			05/01/21			5,703,795
	3,672,772		4.500			08/01/23			3,508,468
	3,567,284		5.500			11/01/23			3,562,920
	62,412		7.500			03/01/27			64,589
	3,071,818		6.500			01/01/29			3,156,753
	1,087,330		6.500			04/01/29			1,116,661
	542,803		6.500			12/01/29			557,096
	491,003		7.000			04/01/31			508,536
	3,600,300		7.000			09/01/31			3,729,455
	1,705,745		7.000			04/01/32			1,756,482
	3,075,660		7.000			05/01/32			3,167,146
	1,077,080		6.000			05/01/33			1,086,894
	495,867		6.500			08/01/33			507,847
	25,000,000		5.500			TBA-15yr	^(e)		25,007,800
	7,000,000		6.000			TBA-15yr	^(e)		7,098,434

									117,667,488

FNMA – 38.3%
	115,695		4.000			06/01/13			111,937
	154,649		4.000			07/01/13			149,587
	213,799		4.000			08/01/13			206,809
	403,370		4.000			09/01/13			390,091
	835,663		4.000			10/01/13			807,934
	622,196		4.000			04/01/14			600,395
	9,551		5.500			04/01/16			9,591
	10,675		5.500			08/01/16			10,720
	122,238		5.500			11/01/16			122,762
	103,871		5.500			12/01/16			104,317
	145,938		5.500			01/01/17			146,564
	16,846,282		5.000			10/01/17			16,633,457
	4,243,606		5.000			11/01/17			4,189,995
	13,166,436		5.000			12/01/17			13,000,099
	289,565		4.500			01/01/18			280,721
	5,927,228		5.000			01/01/18			5,852,347
	3,896,540		5.000			02/01/18			3,846,895
	7,358		6.000			02/01/18			7,434
	566,878		4.500			03/01/18			549,604
	10,570,418		5.000			03/01/18			10,434,763
	785,969		4.500			04/01/18			762,020
	6,078,091		5.000			04/01/18			5,999,814
	2,880,677		4.500			05/01/18			2,792,900
	5,652,626		5.000			05/01/18			5,580,778
	92,263		6.000			05/01/18			93,205
	3,623,086		4.500			06/01/18			3,512,686
	7,075,756		5.000			06/01/18			6,985,190
	617,427		4.500			07/01/18			598,615
	877,381		5.000			07/01/18			866,089
	653,582		4.000			08/01/18			620,810
	1,429,594		4.500			08/01/18			1,386,032
	425,106		5.000			08/01/18			419,632
	141,587		5.000			09/01/18			139,763
	2,177,787		4.500			10/01/18			2,111,428
	1,369,888		5.000			10/01/18			1,352,246
	9,056,557		5.000			11/01/18			8,940,101
	491,285		6.000			11/01/18			496,300
	852,817		7.000			11/01/18			877,209
	694,067		4.000			12/01/18			659,265
	63,007		4.500			12/01/18			61,087
	5,987,994		5.000			12/01/18			5,910,877
	1,794,910		5.500			12/01/18			1,801,736
	896,571		6.000			12/01/18			905,725
	287,590		5.000			01/01/19			283,886
	733,141		6.000			01/01/19			740,626
	254,865		4.500			02/01/19			246,820
	413,683		5.000			02/01/19			408,191
	2,373,483		4.500			04/01/19			2,298,565
	5,661,431		5.000			04/01/19			5,588,520
	257,814		6.000			04/01/19			261,198
	327,273		4.000			05/01/19			310,469
	696,678		4.500			05/01/19			674,687
	52,657		6.000			05/01/19			53,562
	788,603		4.500			06/01/19			764,043
	111,427		5.500			07/01/19			111,672
	284,693		5.500			08/01/19			285,319
	133,808		5.500			09/01/19			134,102
	1,613,170		4.000			10/01/19			1,530,341
	289,974		5.500			10/01/19			290,610
	86,653		5.500			11/01/19			86,843
	32,335		5.000			12/01/19			32,406
	30,303		5.500			12/01/19			30,369
	183,426		7.000			09/01/21			190,070
	565,212		7.000			06/01/22			585,346
	259,609		7.000			07/01/22			268,857
	526,975		5.500			08/01/23			525,850
	12,876,332		4.500			10/01/23			12,237,658
	81,559		6.500			01/01/29			83,727
	138,909		6.500			04/01/29			142,522
	117,071		6.500			05/01/29			120,116
	1,077,188		6.500			06/01/29			1,105,206
	605,182		6.500			07/01/29			620,924
	68,871		6.500			09/01/29			70,662
	158,064		7.000			08/01/31			162,570
	8,987		6.500			08/01/32			9,204
	341,847		6.500			11/01/32			350,092
	281,552		6.000			01/01/33			284,002
	5,467		6.000			02/01/33			5,515
	155,282		6.000			06/01/33			156,535
	51,911		6.000			07/01/33			52,330
	137,886		6.000			09/01/33			138,998
	37,742		6.000			10/01/33			38,046
	967,110		5.500			02/01/34			957,200
	280,719		5.500			07/01/34			277,842
	79,471		6.000			11/01/34			80,039
	2,228,348		6.000			12/01/34			2,244,259
	3,000,000		5.500			TBA-15yr	^(e)		3,002,814

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

GOLDMAN SACHS U.S. MORTGAGES FUND


Principal		Interest			Maturity
Amount		Rate			Date			Value
Mortgage-Backed Obligations – (continued)

FNMA – (continued)
$	13,000,000		7.000	%		TBA-15yr	^(e)	$	13,365,625
	4,000,000		7.500			TBA-15yr	^(e)		4,146,248

									165,684,016

GNMA – 0.0%
	1,089		6.000			12/15/23			1,104
	35,280		6.000			03/15/26			35,865
	41,969		6.000			04/15/26			42,664

									79,633

TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $451,941,574)								$	450,608,692


Agency Debenture – 0.6%

Tennessee Valley Authority
$	2,800,000		5.375	%		04/01/56		$	2,886,632
(Cost $2,791,639)


Asset-Backed Securities^(a) – 3.4%

Home Equity – 3.4%
Carrington Mortgage Loan Trust Series 2005-OPT2, Class A1B
$	961,629		5.470	%		05/25/35		$	961,779
ContiMortgage Home Equity Loan Trust Series 1999-1, Class A7
	66,561		6.970			12/25/13			66,437
Countrywide Home Equity Loan Trust Series 2002-E, Class A
	112,691		5.580			10/15/28			113,048
Countrywide Home Equity Loan Trust Series 2003-A, Class A
	1,488,605		5.670			03/15/29			1,492,191
Countrywide Home Equity Loan Trust Series 2003-D, Class A
	456,653		5.580			06/15/29			457,640
Countrywide Home Equity Loan Trust Series 2004-G, Class 2A
	261,453		5.540			12/15/29			262,026
Countrywide Home Equity Loan Trust Series 2004-I, Class A
	1,508,843		5.610			02/15/34			1,513,321
Countrywide Home Equity Loan Trust Series 2004-J, Class 2A
	185,427		5.610			12/15/33			185,833
Countrywide Home Equity Loan Trust Series 2004-O, Class 1A
	605,635		5.600			02/15/34			606,916
Countrywide Home Equity Loan Trust Series 2004-Q, Class 2A
	543,764		5.620			12/15/33			545,232
Countrywide Home Equity Loan Trust Series 2004-S, Class 1A
	276,033		5.560			02/15/30			276,395
Countrywide Home Equity Loan Trust Series 2005-A, Class 2A
	998,091		5.560			04/15/35			1,000,274
Master Asset Backed Securities Trust Series 2005-WMC1, Class A4
	2,281,715		5.510			03/25/35			2,282,635
Morgan Stanley ABS Capital I Series 2004-HE1, Class A4
	1,129,867		5.690			01/25/34			1,132,304
Ownit Mortgage Loan Asset-Backed Certificates Series 2005-4, Class A2A1
	2,650,842		5.440			08/25/36			2,651,256
Popular ABS Mortgage Pass-Through Trust Series 2004-5, Class AV2
	268,366		5.660			12/25/34			268,660
Residential Asset Mortgage Products, Inc. Series 2004-RZ1, Class AII
	414,592		5.560			03/25/34			415,091
Residential Funding Mortgage Securities, Inc. Series 2004-HS2, Class AII
	464,217		5.550			06/25/29			464,829

									14,695,867

TOTAL ASSET-BACKED SECURITIES
(Cost $14,678,190)								$	14,695,867


U.S. Treasury Obligations – 3.1%

United States Treasury Bonds
$	1,000,000		4.500	%		02/15/36		$	965,156
United States Treasury Inflation Protected Securities
	1,332,132		1.875			07/15/13			1,289,982
	1,434,472		2.000			01/15/14			1,398,105
	2,055,135		2.000			07/15/14			2,001,829
	3,039,809		1.875			07/15/15			2,927,488
	1,027,260		2.000			01/15/16			997,967
	2,120,118		2.500			07/15/16			2,150,595
United States Treasury Notes
	1,400,000		5.125			05/15/16			1,455,343
United States Treasury Principal-Only STRIPS^(d)
	200,000		0.000			11/15/21			96,714

TOTAL U.S. TREASURY OBLIGATIONS
(Cost $13,283,336)								$	13,283,179

TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT — 111.3%
(Cost $482,694,739)								$	481,474,370

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

GOLDMAN SACHS U.S. MORTGAGES FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount		Rate			Date		Value
Repurchase Agreement^(f) – 3.4%

Joint Repurchase Agreement Account II
$	14,600,000		5.316	%		11/01/06	$	14,600,000
Maturity Value: $14,602,156
(Cost $14,600,000)

TOTAL INVESTMENTS – 114.7%
(Cost $497,294,739)							$	496,074,370

LIABILITIES IN EXCESS OF OTHER ASSETS – (14.7)%								(63,669,132	)

NET ASSETS – 100.0%							$	432,405,238


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


(a)	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2006.

(b)	Represents security with notional principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.

(c)	Securities are exempt from registration under rule 144A of the Securities Act of 1933. Under procedures approved by the Board of Trustees, such securities have been determined to be liquid by the Investment Adviser and may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounted to $678,714, which represents approximately 0.2% of net assets as of October 31, 2006.

(d)	Security issued with a zero coupon. Income is recognized through the accretion of discount.

(e)	TBA (To Be Announced) securities are purchased on a forward commitment basis with an approximate principal amount and no defined maturity date. The actual principal and maturity date will be determined upon settlement when the specific mortgage pools are assigned. Total market value of TBA securities amounts to $52,620,921 which represents approximately 12.2% of net assets as of October 31, 2006.

(f)	Joint repurchase agreement was entered into on October 31, 2006. Additional information appears on page 55.



Investment Abbreviations:
CMBS	—	Commercial Mortgage Backed Securities
CMO	—	Collateralized Mortgage Obligations
FHLMC	—	Federal Home Loan Mortgage Corp.
FNMA	—	Federal National Mortgage Association
GNMA	—	Government National Mortgage Association
PAC	—	Planned Amortization Class
REMIC	—	Real Estate Mortgage Investment Conduit
STRIPS	—	Separate Trading of Registered Interest and Principal of Securities

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

GOLDMAN SACHS U.S. MORTGAGES FUND

ADDITIONAL INVESTMENT INFORMATION

FUTURES CONTRACTS — At October 31, 2006, the following futures contracts were open:


	Number of
	Contracts			Settlement	Market			Unrealized
Type	Long (Short)			Month	Value			Gain (Loss)

Eurodollars		43		December 2006	$	10,173,263		$	1,668
Eurodollars		25		March 2007		5,923,750			2,490
Eurodollars		45		June 2007		10,681,875			8,297
Eurodollars		35		September 2007		8,323,437			11,481
Eurodollars		35		December 2007		8,333,938			16,293
Eurodollars		36		March 2008		8,575,650			18,778
Eurodollars		22		June 2008		5,239,575			10,925
U.S. Treasury Bonds		41		December 2006		4,618,906			13,895
2 Year U.S. Treasury Notes		(97	)	December 2006		(19,827,406	)		(3,159	)
5 Year U.S. Treasury Notes		(303	)	December 2006		(31,985,438	)		(123,889	)
10 Year U.S. Treasury Notes		(297	)	December 2006		(32,140,969	)		(297,709	)

TOTAL					$	(22,083,419	)	$	(340,930	)

SWAP CONTRACTS — At October 31, 2006, the Fund had outstanding swap contracts with the following terms:

INTEREST RATE SWAP CONTRACTS


				Rates Exchanged
						Upfront
	Notional			Payments	Payments	Payments
Swap	Amount		Termination	received by	made by	made by the		Unrealized
Counterparty	(000s)		Date	the Fund	the Fund	Fund		Gain (Loss)

Banc of America Securities LLC	$	12,000	09/02/10	4.309%	3 month LIBOR	$	—	$	(315,766	)
Banc of America Securities LLC		15,000	10/06/10	4.703	3 month LIBOR		—		(178,961	)
Banc of America Securities LLC^(a)		16,500	12/20/11	5.600	3 month LIBOR		304,982		106,059
Banc of America Securities LLC		11,000	05/23/12	4.374	3 month LIBOR		—		(257,305	)
Deutsche Bank Securities^(a)		30,900	12/20/13	5.650	3 month LIBOR		687,137		345,809
J.P. Morgan Securities, Inc.		10,000	03/07/16	3 month LIBOR	5.183%		—		(41,489	)

TOTAL						$	992,119	$	(341,653	)


(a)	Represents forward starting interest rate swaps whose effective dates of commencement of accruals and cash flows occur subsequent to October 31, 2006.

LIBOR — London Interbank Offered Rate

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

GOLDMAN SACHS U.S. MORTGAGES FUND

Schedule of Investments (continued)

October 31, 2006

ADDITIONAL INVESTMENT INFORMATION (continued)

TOTAL RETURN INDEX SWAP CONTRACTS

Rates Exchanged

Notional

Payments

Swap

Amount

Termination

Reference

received by

made by

Unrealized

Counterparty

(000s)

Date

Underlying

the Fund

Gain

Banc of America Securities LLC

7,500

1/31/07

Banc of America Securities LLC CMBS AAA 10 Yr Index

Any positive monthly duration adjusted return on the underlying index

Any negative monthly duration adjusted return on the underlying index

4,067

Banc of America Securities LLC

5,500

1/31/07

Banc of America Securities LLC CMBS AAA 10 Yr Index

Any positive monthly duration adjusted return on the underlying index

Any negative monthly duration adjusted return on the underlying index

3,829

TOTAL

7,896

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

GOLDMAN SACHS CORE FIXED INCOME FUND

Performance Summary

October 31, 2006 (Unaudited)

The following graph shows the value, as of October 31, 2006, of a $10,000 investment made on November 1, 1996 in the Institutional Shares of the Goldman Sachs Core Fixed Income Fund. For comparative purposes, the performance of the Fund’s benchmark, the Lehman Brothers Aggregate Bond Index (“Lehman Aggregate Bond 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 B, Class C, and Service Shares will vary from Institutional Shares due to differences in fees and loads. In addition to the investment adviser’s decisions regarding issuer/industry/country investment selection and allocation, other factors may affect Fund performance. These factors include, but are not limited to, Fund operating fees and expenses, portfolio turnover and subscription and redemption cash flows affecting the Fund.

Core Fixed Income Fund’s 10 Year Performance

Performance of a $10,000 Investment, Distributions Reinvested November 1, 1996 to October 31, 2006.


Average Annual Total Return through October 31, 2006	Since Inception		Ten Years		Five Years		One Year
Class A (commenced May 1, 1997)
Excluding sales charges		6.02%		n/a		4.42%		4.21%
Including sales charges		5.50%		n/a		3.47%		-0.52%

Class B (commenced May 1, 1997)
Excluding contingent deferred sales charges		5.24%		n/a		3.62%		3.42%
Including contingent deferred sales charges		5.24%		n/a		3.21%		-1.75%

Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges		4.99%		n/a		3.64%		3.52%
Including contingent deferred sales charges		4.99%		n/a		3.64%		2.49%

Institutional Class (commenced January 5, 1994)		6.31%		6.30%		4.83%		4.69%

Service Class (commenced March 13, 1996)		5.89%		5.77%		4.31%		4.06%

GOLDMAN SACHS CORE FIXED INCOME FUND

Schedule of Investments

October 31, 2006


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – 15.7%

Automotive – 0.1%
General Motors Acceptance Corp.
$	2,900,000		6.875	%		09/15/11	$	2,922,649

Banks – 3.1%
ANZ Capital Trust I^(a)
	3,500,000		5.360			12/29/49		3,411,397
Associates Corp. NA
	2,000,000		8.550			07/15/09		2,167,968
Astoria Financial Corp.
	4,600,000		5.750			10/15/12		4,632,855
Citigroup, Inc.
	2,000,000		7.250			10/15/11		2,166,578
Commonwealth Bank of Australia^(a)(b)
	2,875,000		6.024			03/29/49		2,882,242
Fleet Boston Financial Corp.
	450,000		7.375			12/01/09		478,197
Greater Bay Bancorp Series D
	2,900,000		5.125			04/15/10		2,870,951
GreenPoint Financial Corp.
	2,400,000		3.200			06/06/08		2,324,384
HBOS Capital Funding LP^(a)(b)
	4,325,000		6.071			06/27/49		4,407,495
J.P. Morgan Chase & Co.
	4,065,000		5.250			05/30/07		4,062,760
KeyBank NA
	5,500,000		5.000			07/17/07		5,477,010
Mizuho JGB Investment LLC^(a)(b)
	1,600,000		9.870			06/30/49		1,709,237
MUFG Capital Finance 1 Ltd.^(b)
	5,250,000		6.346			07/25/49		5,301,943
National Australia Bank Ltd.
	2,000,000		8.600			05/19/10		2,218,674
Popular North America, Inc.
	4,125,000		5.200			12/12/07		4,109,152
Regions Bank
	2,530,000		2.900			12/15/06		2,522,671
Regions Financial Corp.
	4,500,000		7.000			03/01/11		4,803,649
Resona Bank Ltd.^(a)
	3,500,000		5.850	^(b)		04/15/49		3,428,407
	EUR2,675,000		4.125			09/27/49		3,322,696
Sovereign Bank
$	1,000,000		4.000			02/01/08		983,325
	375,000		5.125			03/15/13		368,211
	2,550,000		4.375	^(b)		08/01/13		2,499,382
Union Planters Corp.
	150,000		7.750			03/01/11		164,249
Wachovia Bank NA
	5,000,000		7.875			02/15/10		5,408,910
Wells Fargo Bank NA
	1,000,000		6.450			02/01/11		1,049,087

								72,771,430

Brokerage – 0.6%
Bear Stearns Co., Inc.
	6,330,000		5.700			01/15/07		6,332,025
Lehman Brothers Holdings, Inc.
	4,500,000		6.625			01/18/12		4,775,079
Morgan Stanley
	3,000,000		5.050			01/21/11		2,983,626

								14,090,730

Captive Financial – 0.1%
Nelnet, Inc.
	2,580,000		5.125			06/01/10		2,526,146

Diversified Manufacturing^(a) – 0.1%
Tyco International Group Participation Certificate
	3,525,000		4.436			06/15/07		3,500,579

Electric – 1.2%
Calenergy, Inc.
	1,500,000		7.630			10/15/07		1,531,155
	2,210,000		7.520			09/15/08		2,298,196
CenterPoint Energy, Inc. Series B
	550,000		7.250			09/01/10		582,020
FirstEnergy Corp. Series C
	4,050,000		7.375			11/15/31		4,726,104
MidAmerican Energy Holdings Co.
	6,125,000		6.125			04/01/36		6,298,564
Nisource Finance Corp.^(b)
	5,000,000		5.968			11/23/09		4,999,545
Progress Energy, Inc.
	50,000		5.625			01/15/16		50,127
	3,000,000		7.750			03/01/31		3,653,658
TXU Corp. Series O
	5,250,000		4.800			11/15/09		5,131,067

								29,270,436

Entertainment – 0.1%
Time Warner Entertainment Co.
	2,175,000		8.375			03/15/23		2,529,003

Environmental – 0.1%
Waste Management, Inc.
	2,000,000		7.375			08/01/10		2,137,366

Gaming – 0.3%
Caesars Entertainment, Inc.
	1,745,000		7.500			09/01/09		1,810,124
Harrahs Operating Co., Inc.
	2,475,000		5.500			07/01/10		2,397,748
MGM Mirage, Inc.
	850,000		8.500			09/15/10		898,875
Park Place Entertainment Corp.
	950,000		8.500			11/15/06		950,774

								6,057,521

Integrated – 0.5%
Hess Corp.
	5,500,000		7.125			03/15/33		6,125,113
Kerr-McGee Corp.
	4,575,000		6.950			07/01/24		4,960,252

								11,085,365

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

GOLDMAN SACHS CORE FIXED INCOME FUND


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – (continued)

Life Insurance – 0.5%
Americo Life, Inc.^(a)
$	1,600,000		7.875	%		05/01/13	$	1,613,440
AmerUs Group Co.
	4,025,000		5.950			08/15/15		4,125,815
Hartford Life, Inc.
	200,000		7.100			06/15/07		202,018
Phoenix Life Insurance Co.^(a)
	3,200,000		7.150			12/15/34		3,457,965
Principal Financial Group Australia^(a)
	2,750,000		8.200			08/15/09		2,962,168
Reinsurance Group of America, Inc.
	550,000		6.750			12/15/11		577,966

								12,939,372

Media – Cable – 1.1%
Comcast Cable Communications Holdings, Inc.
	7,395,000		8.375			03/15/13		8,446,581
	2,050,000		9.455			11/15/22		2,662,537
Cox Communications, Inc.
	7,211,000		4.625			01/15/10		7,042,457
Cox Enterprises, Inc.^(a)
	2,825,000		4.375			05/01/08		2,773,667
Rogers Cable, Inc.
	1,575,000		5.500			03/15/14		1,480,500
Viacom, Inc.
	1,975,000		5.750			04/30/11		1,977,459
	1,400,000		6.875			04/30/36		1,409,715

								25,792,916

Media – Non Cable – 0.4%
Clear Channel Communications, Inc.
	5,325,000		8.000			11/01/08		5,551,741
News America, Inc.
	2,750,000		6.400			12/15/35		2,757,433

								8,309,174

Noncaptive – Financial – 1.2%
GATX Financial Corp.
	5,775,000		5.125			04/15/10		5,711,481
General Electric Capital Corp.
	3,000,000		7.375			01/19/10		3,201,935
HSBC Finance Corp.
	8,375,000		5.700			06/01/11		8,545,816
	1,000,000		6.375			10/15/11		1,049,537
PHH Corp.
	7,950,000		6.000			03/01/08		7,967,562
	1,900,000		7.125			03/01/13		1,940,852

								28,417,183

Pipelines – 0.8%
CenterPoint Energy Resources Corp. Series B
	4,075,000		5.950			01/15/14		4,108,240
Energy Transfer Partners
	5,850,000		5.650			08/01/12		5,859,377
	2,775,000		5.950			02/01/15		2,800,961
Enterprise Products Operating LP
	3,525,000		5.600			10/15/14		3,478,562
Enterprise Products Partners LP
	2,450,000		5.000			03/01/15		2,315,598
Panhandle Eastern Pipeline
	1,350,000		4.800			08/15/08		1,338,091

								19,900,829

Property/Casualty Insurance – 1.8%
ACE Ltd.
	6,575,000		6.000			04/01/07		6,586,381
AON Capital Trust A
	1,852,000		8.205			01/01/27		2,153,022
Arch Capital Group Ltd.
	3,200,000		7.350			05/01/34		3,506,794
Aspen Insurance Holdings Ltd.
	1,525,000		6.000			08/15/14		1,492,589
CNA Financial Corp.
	1,375,000		6.750			11/15/06		1,375,470
	98,000		6.600			12/15/08		100,360
	500,000		5.850			12/15/14		503,040
Endurance Specialty Holdings Ltd.
	2,975,000		6.150			10/15/15		2,963,296
	750,000		7.000			07/15/34		778,353
Hartford Financial Services Group, Inc.
	2,000,000		7.900			06/15/10		2,178,317
Liberty Mutual Group^(a)
	3,700,000		7.000			03/15/34		3,828,314
	550,000		6.500			03/15/35		542,931
	3,430,000		7.500			08/15/36		3,815,066
QBE Insurance Group Ltd.^(a)(b)
	3,150,000		5.647			07/01/23		3,071,206
Royal & Sun Alliance Insurance Group PLC
	1,225,000		8.500			07/29/49		2,700,111
SAFECO Corp.
	5,000,000		6.875			07/15/07		5,051,435
Zurich Capital Trust I^(a)
	2,500,000		8.376			06/01/37		2,626,948

								43,273,633

REIT – 0.6%
Brandywine Operating Partnership LP
	3,740,000		4.500			11/01/09		3,632,946
EOP Operating LP
	1,500,000		7.750			11/15/07		1,534,995
iStar Financial, Inc.
	2,200,000		5.650			09/15/11		2,204,814
iStar Financial, Inc. Series B
	3,275,000		5.700			03/01/14		3,261,815
Liberty Property LP
	1,100,000		7.250			03/15/11		1,168,263
Simon Property Group LP
	1,625,000		7.000			06/15/08		1,667,003

								13,469,836

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

GOLDMAN SACHS CORE FIXED INCOME FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – (continued)

Technology – 0.2%
First Data Corp.
$	4,075,000		5.625	%		11/01/11	$	4,164,679

Tobacco – 0.2%
Altria Group, Inc.
	475,000		7.000			11/04/13		520,187
	2,745,000		7.750			01/15/27		3,367,670

								3,887,857

Wireless Telecommunications – 0.7%
America Movil SA de CV
	1,800,000		5.500			03/01/14		1,758,168
AT&T Wireless Services, Inc.
	5,775,000		7.875			03/01/11		6,337,179
Intelsat
	3,850,000		5.250			11/01/08		3,724,875
Telecom Italia Capital SA
	2,475,000		4.875			10/01/10		2,411,952
Verizon Wireless Capital LLC
	3,000,000		5.375			12/15/06		2,999,358

								17,231,532

Wirelines Telecommunications – 2.0%
Ameritech Capital Funding
	775,000		6.250			05/18/09		786,655
BellSouth Corp.
	7,000,000		6.000			10/15/11		7,189,840
Deutsche Telekom International Finance BV
	2,800,000		5.375			03/23/11		2,795,178
	4,075,000		8.250			06/15/30		5,056,520
Embarq Corp.
	1,500,000		7.995			06/01/36		1,595,102
France Telecom SA
	5,750,000		7.750			03/01/11		6,316,231
Qwest Capital Funding, Inc.
	500,000		7.900			08/15/10		516,250
SBC Communications, Inc.
	2,725,000		4.125			09/15/09		2,644,183
Sprint Capital Corp.
	300,000		6.000			01/15/07		300,149
	3,050,000		6.875			11/15/28		3,128,889
Telecom Italia Capital
	3,050,000		4.000			01/15/10		2,905,027
	2,625,000		4.950			09/30/14		2,434,871
Telecomunicaciones de Puerto Rico, Inc.
	2,650,000		6.800			05/15/09		2,713,279
Telefonica Europe BV
	2,575,000		7.750			09/15/10		2,786,369
TPSA Finance BV^(a)
	2,200,000		7.750			12/10/08		2,297,836
TPSA Finance BV
	3,100,000		7.625			01/30/11		3,341,663

								46,808,042

TOTAL CORPORATE BONDS
(Cost $367,240,784)							$	371,086,278

Mortgage-Backed Obligations – 49.4%

Adjustable Rate FNMA^(b) – 0.4%
$	80,878		4.486	%		03/01/33		81,291
	10,280,179		3.851			10/01/33		10,199,051

								10,280,342

Adjustable Rate Non-Agency^(b) – 25.2%
Bear Stearns Adjustable Rate Mortgage Trust Series 2003-5, Class 1A1
	232,723		5.979			08/25/33		235,856
Bear Stearns Alternative-A Trust Series 2005-8, Class 11A1
	3,868,524		5.590			10/25/35		3,882,685
Bear Stearns Mortgage Funding Trust Series 2006-AR2, Class 1A1
	22,882,018		5.520			09/25/36		22,882,018
Countrywide Alternative Loan Trust Series 2005-51, Class 1A1
	8,579,656		5.640			11/20/35		8,618,830
Countrywide Alternative Loan Trust Series 2005-51, Class 2A1
	12,119,976		5.620			11/20/35		12,172,279
Countrywide Alternative Loan Trust Series 2005-51, Class 4A1
	10,243,254		5.640			11/20/35		10,290,278
Countrywide Alternative Loan Trust Series 2005-59, Class 1A1
	10,651,217		5.660			11/20/35		10,686,411
Countrywide Alternative Loan Trust Series 2005-59, Class 1A2A
	8,876,014		5.710			11/20/35		8,902,293
Countrywide Alternative Loan Trust Series 2005-62, Class 1A1
	15,409,419		5.620			12/25/35		15,474,835
Countrywide Home Loan Mortgage Pass Through Trust Series 2006-3, Class 1A1
	8,041,706		5.560			03/25/36		8,052,174
Countrywide Home Loans Series 2003-37, Class 1A1
	148,854		5.875			08/25/33		148,610
Countrywide Securities Corp. Series 2006-OA19, Class A1
	23,500,000		5.525			12/25/46		23,500,000
CS First Boston Mortgage Securities Corp. Series 2003-AR9, Class 2A2
	190,862		5.100			03/25/33		189,991
Downey Savings & Loan Association Mortgage Loan Trust Series 2005-AR6, Class 2A1A
	12,027,364		5.610			10/19/45		12,072,785
Harborside Mortgage Loan Trust Series 2006-12, Class 2A2A
	28,000,000		5.500			12/19/45		28,000,000
Harborview Mortgage Loan Trust Series 2005-10, Class 2A1A
	16,250,622		5.630			11/19/35		16,300,277
Harborview Mortgage Loan Trust Series 2005-16, Class 2A1A
	3,721,952		5.560			01/19/36		3,732,111
Harborview Mortgage Loan Trust Series 2005-16, Class 3A1A
	20,179,514		5.570			01/19/36		20,173,593
Impac CMB Trust Series 2004-8, Class 1A
	2,761,614		5.680			10/25/34		2,777,551
Impac CMB Trust Series 2005-6, Class 1A1
	13,772,017		5.570			10/25/35		13,781,915
Impac Secured Assets Corp. Series 2005-2, Class A1W
	13,345,329		5.570			03/25/36		13,361,747
Indymac Index Mortgage Loan Trust Series 2006-AR2, Class 1A1A
	11,953,992		5.540			04/25/46		11,963,711

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

GOLDMAN SACHS CORE FIXED INCOME FUND


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Mortgage-Backed Obligations – (continued)

Adjustable Rate Non-Agency^(b) – (continued)
Indymac Index Mortgage Loan Trust Series 2006-AR4 Class A1A
$	14,044,558		5.540	%		05/25/46	$	14,052,172
Lehman XS Trust Series 2005-5N, Class 3A1A
	14,052,398		5.620			11/25/35		14,064,400
Lehman XS Trust Series 2005-9N, Class 1A1
	14,461,015		5.590			02/25/36		14,474,572
Luminent Mortgage Trust Series 2006-2, Class A1A
	14,297,019		5.520			02/25/46		14,302,112
Luminent Mortgage Trust Series 2006-2, Class A1B
	2,859,404		5.600			02/25/46		2,862,363
Master Adjustable Rate Mortgages Trust Series 2004-9, Class 2A1
	762,621		5.700			11/25/34		766,563
MLCC Mortgage Investors, Inc. Series 2004-E, Class A2B
	6,543,407		5.780			11/25/29		6,547,493
Mortgage IT Trust Series 2005-AR1, Class 1A1
	13,622,184		5.580			11/25/35		13,666,056
Sequoia Mortgage Trust Series 2003-4, Class 1A2
	3,906,931		5.913			07/20/33		3,911,650
Structured Asset Mortgage Investments, Inc. Series 2006-AR1, Class 3A1
	18,780,416		5.550			02/25/36		18,801,039
Structured Asset Mortgage Investments, Inc. Series 2006-AR2, Class A1
	12,378,766		5.550			02/25/36		12,392,227
Structured Asset Securities Corp. Series 2003-37A, Class 3A7
	5,158,162		4.520			12/25/33		5,122,190
Thornburg Mortgage Securities Trust Series 2006-5, Class A1
	29,519,526		5.450			08/25/36		29,454,208
UBS Warburg LLC Series 2006-0A2, Class 4A1
	17,275,725		5.503			11/25/46		17,267,627
Washington Mutual Series 2002-AR19, Class A7
	926,911		4.679			02/25/33		915,365
Washington Mutual Series 2005-AR8, Class 2A1A
	17,805,153		5.610			07/25/45		17,872,164
Washington Mutual Series 2005-AR11, Class A1A
	10,180,960		5.640			08/25/45		10,211,176
Washington Mutual Series 2005-AR13, Class A1A1
	17,635,704		5.610			10/25/45		17,733,519
Washington Mutual Series 2005-AR15, Class A1A1
	19,388,223		5.580			11/25/45		19,453,391
Washington Mutual Series 2005-AR17, Series A1A1
	14,445,066		5.590			12/25/45		14,408,809
Washington Mutual Series 2006-AR13, Class 1A
	17,526,099		5.544			10/25/46		17,519,938
Washington Mutual, Inc. Series 2006-AR11, Class 3A1A
	4,942,505		5.584			09/25/46		4,946,173
Wells Fargo Mortgage Backed Securities Trust Series 2005-AR16, Class 1A1
	14,807,765		4.977			10/25/35		14,824,832
Wells Fargo Mortgage Backed Securities Trust Series 2006-AR2, Class 2A3
	27,808,893		5.092			03/25/36		27,647,109
WMALT Mortgage Pass-Through Certificates Series 2006-AR7, Class A1A
	12,312,420		5.483			09/25/46		12,329,254
WMALT Mortgage Pass-Through Certificates Series 2006-AR9, Class 2A
	24,000,000		5.504			11/25/46		24,000,000

								596,746,352

CMBS – 8.9%
Interest Only^(a)(b)(c) – 0.1%
Bear Stearns Commercial Mortgage Securities, Inc. Series 2001-TOP2, Class X2
	38,000,000		1.288			02/15/35		623,671
CS First Boston Mortgage Securities Corp. Series 2002-CKS4, Class ASP
	26,177,440		1.592			11/15/36		1,022,483

								1,646,154

Sequential Fixed Rate – 8.8%
Asset Securitization Corp. Series 1997-D4, Class A1D
	578,455		7.490			04/14/29		581,262
Banc of America Commercial Mortgage, Inc. Series 2005-6, Class A4
	20,000,000		5.182			09/10/47		19,934,392
Banc of America Commercial Mortgage, Inc. Series 2006-4 Class A4
	12,000,000		5.634			07/10/46		12,297,287
Bear Stearns Commercial Mortgage Securities Series 2006-PW12, Class A4
	12,500,000		5.711			09/11/38		12,950,467
Citigroup Commercial Mortgage Trust Series 2006-C4, Class A3
	13,000,000		5.720			03/15/49		13,467,649
Citigroup/Deutsche Bank Commercial Mortgage Trust Series 2006-C02, Class A4
	15,000,000		5.362			01/15/46		15,135,822
Commercial Mortgage Acceptance Corp. Series 1997-ML1, Class A3
	2,800,000		6.570			12/15/30		2,814,607
Commercial Mortgage Pass Through Certificates Series 2006-C7, Class A4
	24,000,000		5.769			06/10/46		24,922,730
CS First Boston Mortgage Securities Corp. Series 1997-C2, Class A3
	9,360,907		6.550			01/17/35		9,446,219
First Union National Bank Commercial Mortgage Trust Series 2000-C2, Class A2
	17,000,000		7.202			10/15/32		18,082,618
GMAC Commercial Mortgage Securities, Inc. Series 2002-C1, Class A2
	15,000,000		6.278			11/15/39		15,668,217
LB-UBS Commercial Mortgage Trust Series 2005-C5, Class A4
	9,000,000		4.954			09/15/30		8,806,822

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

GOLDMAN SACHS CORE FIXED INCOME FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Mortgage-Backed Obligations – (continued)

Sequential Fixed Rate – (continued)
LB-UBS Commercial Mortgage Trust Series 2005-C7, Class A4
$	10,175,000		5.197	%		11/15/30	$	10,123,483
LB-UBS Commercial Mortgage Trust Series 2006-C1, Class A4
	12,000,000		5.156			02/15/31		11,856,564
Merrill Lynch Mortgage Investors, Inc. Series 1998-C2, Class A2
	1,231,678		6.390			02/15/30		1,238,418
Merrill Lynch Mortgage Investors, Inc. Series 1999-C1, Class A2
	4,133,319		7.560			11/15/31		4,335,752
Morgan Stanley Capital I Series 2006-T21, Class A4
	19,000,000		5.162			10/12/52		18,830,408
Washington Mutual Series 2006-AR17, Class 1A
	9,000,000		5.504			11/25/46		9,000,000

								209,492,717

TOTAL CMBS								211,138,871

CMO – 0.6%
Interest Only^(c) – 0.1%
ABN AMRO Mortgage Corp. Series 2003-5, Class A2
	2,419,335		5.500			04/25/33		241,717
Countrywide Home Loan Trust Series 2003-42, Class 2X1^(b)
	3,136,476		0.364			10/25/33		15,328
CS First Boston Mortgage Securities Corp. Series 2002-AR31, Class 5X^(b)
	1,428,402		0.000			11/25/32		857
CS First Boston Mortgage Securities Corp. Series 2003-08, Class 3A2
	475,374		5.500			04/25/33		25,903
CS First Boston Mortgage Securities Corp. Series 2003-10, Class 3A13
	368,365		5.750			05/25/33		14,423
CS First Boston Mortgage Securities Corp. Series 2003-11, Class 1A2
	322,300		5.500			06/25/33		20,484
CS First Boston Mortgage Securities Corp. Series 2003-AR18, Class 2X^(b)
	3,375,278		0.782			07/25/33		22,210
CS First Boston Mortgage Securities Corp. Series 2003-AR20, Class 2X^(b)
	3,814,326		0.605			08/25/33		24,375
FNMA Series 1992-24, Class N
	94		789.000			03/25/07		184
FNMA Series 2004-47, Class EI^(b)
	7,004,709		0.000			06/25/34		283,033
FNMA Series 2004-62, Class DI^(b)
	3,102,415		0.000			07/25/33		126,996
FNMA Series 2004-71, Class DI^(b)
	6,364,157		0.000			04/25/34		166,143
Washington Mutual Series 2003-AR04, Class X1^(b)
	5,213,208		1.181			01/25/08		58,333
Washington Mutual Series 2003-AR05, Class X1^(b)
	14,753,636		0.756			02/25/08		125,543
Washington Mutual Series 2003-AR06, Class X2
	11,481,200		0.371			05/25/08		48,591
Washington Mutual Series 2003-AR07, Class X^(b)
	18,557,053		0.940			06/25/08		196,532
Washington Mutual Series 2003-AR12, Class X^(b)
	12,589,701		0.484			02/25/34		88,162
Wells Fargo Mortgage Backed Securities Trust Series 2003-G, ClassAI0^(b)
	13,192,041		0.760			06/25/33		352,226

								1,811,040

Inverse Floaters^(b) – 0.2%
FHLMC Series 1544, Class M
	44,368		11.206			07/15/08		45,634
FNMA Series 1993-072, Class SA
	17,370		9.123			05/25/08		17,836
FNMA Series 1993-093, Class SA
	24,598		11.994			05/25/08		25,644
FNMA Series 1993-095, Class SE
	29,490		12.304			06/25/08		30,902
FNMA Series 1993-135, Class S
	60,779		6.500			07/25/08		62,228
FNMA Series 1993-175, Class SA
	208,973		11.895			09/25/08		219,606
GNMA Series 2001-48, Class SA
	229,983		9.198			10/16/31		260,933
GNMA Series 2001-51, Class SA
	445,156		9.447			10/16/31		513,234
GNMA Series 2001-51, Class SB
	460,045		9.198			10/16/31		518,578
GNMA Series 2001-59, Class SA
	81,205		9.035			11/16/24		92,153
GNMA Series 2002-11, Class SA
	231,889		12.740			02/16/32		291,323
GNMA Series 2002-13, Class SB
	540,552		12.740			02/16/32		675,387
Morgan Stanley Mortgage Trust Series 40, Class 16
	825,544		8.949			01/20/22		829,078

								3,582,536

PAC – 0.0%
FNMA Series 1999-51, Class LG
	260,717		6.500			12/25/28		260,564

Regular Floater^(b) – 0.0%
FNMA REMIC Trust Series 1993-175, Class FA
	451,383		4.060			09/25/08		445,440

Sequential Fixed Rate – 0.3%
FHLMC Series 2367, Class BC
	798,949		6.000			04/15/16		798,149
FNMA REMIC Trust Series 1993-78, Class H
	440,829		6.500			06/25/08		442,134
FNMA Series 1999-1, Class PG
	419,833		6.500			04/25/28		418,378

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

GOLDMAN SACHS CORE FIXED INCOME FUND


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Mortgage-Backed Obligations – (continued)

Sequential Fixed Rate – (continued)
FNMA Series 2001-M2, Class C
$	5,390,822		6.300	%		09/25/15	$	5,532,221

								7,190,882

TOTAL CMO								13,290,462

FHLB – 0.1%
	1,269,571		7.040			08/01/15		1,405,487

FHLMC – 4.2%
	307,624		5.000			12/01/12		305,919
	31,793		5.500			07/01/13		31,948
	206,753		5.500			12/01/13		207,766
	2,630,624		6.500			12/01/13		2,683,946
	77,600		5.500			02/01/14		77,980
	29,064		5.500			06/01/14		29,188
	71,152		5.500			09/01/14		71,457
	4,270		7.000			10/01/14		4,365
	1,431,625		6.000			12/01/14		1,438,261
	39,883		7.000			05/01/15		40,769
	116,244		8.000			07/01/15		122,492
	14,995		7.000			02/01/16		15,381
	36,508		7.000			03/01/16		37,447
	920,941		7.500			05/01/16		960,436
	3,337		7.000			10/01/17		3,468
	2,712,191		4.500			05/01/18		2,626,047
	642,321		4.500			06/01/18		621,964
	2,639,004		4.500			09/01/18		2,555,368
	1,907,283		4.500			10/01/18		1,846,794
	1,746,747		5.000			10/01/18		1,723,439
	2,450,002		4.500			11/01/18		2,372,296
	2,027,363		4.500			12/01/18		1,963,110
	5,753,406		5.000			12/01/18		5,676,648
	713,466		4.500			01/01/19		690,854
	1,900,635		4.500			03/01/19		1,839,636
	44,941,106		4.000			06/01/19		42,557,092
	8,796,067		4.500			06/01/19		8,517,296
	707,572		5.000			06/01/19		697,355
	3,897,313		4.500			02/01/20		3,773,797
	1,980,535		5.500			05/01/23		1,970,672
	1,219,650		5.500			06/01/23		1,213,576
	1,198,962		5.500			07/01/23		1,192,990
	3,673,384		4.500			10/01/23		3,509,053
	598,378		5.500			10/01/25		596,435
	830,783		5.500			11/01/25		828,086
	83,586		7.000			06/01/26		86,565
	63,263		7.500			03/01/27		65,470
	18,178		6.500			06/01/29		18,651
	2,551,175		6.500			12/01/29		2,618,353
	68,591		7.500			12/01/30		70,982
	59,294		7.500			01/01/31		61,360
	86,875		6.500			03/01/32		88,974
	20,738		6.500			04/01/32		21,239
	220,271		6.500			07/01/32		225,593
	1,544,475		6.500			08/01/33		1,581,788
	559,423		6.500			10/01/33		571,892

								98,214,198

FNMA – 9.4%
	1,378		9.000			09/15/08		1,409
	385,815		8.500			10/01/15		411,007
	15,724		7.000			01/01/16		16,060
	757,630		6.000			12/01/16		770,406
	9,027,578		5.000			10/01/17		8,913,529
	60,225,431		5.000			12/01/17		59,464,581
	1,729,759		5.000			01/01/18		1,707,907
	5,904,194		5.000			02/01/18		5,828,264
	1,240,941		4.500			04/01/18		1,203,128
	1,781,531		5.000			04/01/18		1,758,587
	10,507,014		4.500			05/01/18		10,186,855
	1,281,235		5.000			05/01/18		1,264,735
	14,268,178		4.500			06/01/18		13,833,408
	951,153		5.000			06/01/18		938,903
	6,867,767		4.000			07/01/18		6,523,402
	2,294,832		4.500			07/01/18		2,224,905
	3,431,988		4.000			08/01/18		3,259,900
	1,594,679		4.500			08/01/18		1,546,087
	91,931		6.000			08/01/18		92,870
	28,726,158		4.000			09/01/18		27,285,761
	2,955,559		4.500			10/01/18		2,865,499
	3,012,917		5.000			11/01/18		2,974,115
	94,510		4.500			12/01/18		91,630
	2,692,365		5.500			12/01/18		2,702,604
	339,820		4.500			02/01/19		329,094
	2,839,584		4.500			04/01/19		2,749,953
	3,213,774		5.000			04/01/19		3,172,385
	1,194,113		4.500			05/01/19		1,156,420
	210,534		5.000			05/01/19		207,644
	1,102,085		4.500			06/01/19		1,067,796
	372,550		5.000			06/01/19		367,752
	126,504		4.500			09/01/19		122,511
	138,648		4.500			10/01/19		134,272
	539,333		4.500			11/01/19		522,307
	472,937		5.000			11/01/19		466,446
	197,800		4.500			12/01/19		191,556
	891,669		5.000			12/01/19		880,186
	11,844,589		4.500			09/01/23		11,322,610
	1,923,403		4.500			10/01/23		1,828,001
	2,800,430		6.460			12/01/28		2,970,401
	12,050		7.500			03/01/29		12,452
	11,237		7.500			08/01/29		11,612
	4,273		7.500			11/01/29		4,415
	56,027		6.500			12/01/30		57,379
	86,933		7.500			12/01/30		89,627
	153,453		8.000			01/01/31		160,445
	105,759		8.000			02/01/31		111,266
	852,286		7.000			03/01/31		879,231
	17,101		6.500			09/01/33		17,470
	981,824		8.000			11/01/36		1,021,251

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

GOLDMAN SACHS CORE FIXED INCOME FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount*		Rate			Date			Value
Mortgage-Backed Obligations – (continued)

FNMA – (continued)
$	19,000,000		7.000	%		TBA-15yr	^(d)	$	19,534,375
	16,000,000		7.500			TBA-15yr	^(d)		16,584,992

									221,839,401

Principal Only^(e) – 0.6%
FHLMC Series 235, Class PO
	9,078,767		0.000			02/01/36			6,735,242
FNMA Series 363, Class 1
	9,187,288		0.000			11/01/35			6,883,038

									13,618,280

TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $1,163,444,174)								$	1,166,533,393

Agency Debentures – 18.0%

FFCB
$	2,500,000		3.250	%		06/15/07		$	2,469,670
	2,000,000		3.625			01/04/08			1,967,062
	3,000,000		3.150			07/21/08			2,912,643
	9,000,000		4.830			12/22/14			8,915,931
FHLB
	5,000,000		4.125			11/15/06			4,997,425
	13,000,000		4.875			11/15/06			12,996,997
	37,000,000		5.270	^(b)		12/13/06			37,000,666
	100,000,000		4.800			05/02/08			99,814,100
	1,500,000		5.800			09/02/08			1,522,218
	5,000,000		5.375	^(f)		05/15/09			5,057,566
	10,000,000		6.715			06/29/09			10,480,760
	10,000,000		6.500			08/14/09			10,417,316
	2,500,000		4.000			02/15/11			2,416,300
	9,595,000		4.250			11/15/11			9,327,146
	17,360,000		4.500			09/14/12			16,979,005
FHLMC
	5,000,000		6.700			01/05/07			5,010,870
	2,500,000		3.050			01/19/07			2,487,438
	1,950,000		3.500			09/15/07			1,923,133
	10,540,000		3.650			01/23/08			10,364,730
	40,000,000		4.480			09/19/08			39,659,144
	1,810,000		5.125			07/15/12			1,829,818
	9,000,000		5.000			01/30/14			8,941,711
FNMA
	15,000,000		3.550			01/12/07			14,945,625
	19,000,000		6.160			12/18/07			19,216,619
	2,850,000		5.750			02/15/08			2,875,524
	50,000,000		4.200			03/24/08			49,414,450
	1,000,000		5.250			01/15/09			1,008,160
	5,000,000		6.250			02/01/11			5,234,872
	19,560,000		5.300			02/22/11			19,495,878
	11,000,000		5.625			02/28/12			10,958,796
	4,500,000		5.250			08/01/12			4,541,454
Small Business Administration
	890,061		6.300			06/01/18			914,432

TOTAL AGENCY DEBENTURES
(Cost $427,578,616)								$	426,097,459

Asset-Backed Securities – 4.7%

Credit Card – 0.1%
MBNA Master Credit Card Trust II Series 1999-J, Class A
$	3,000,000		7.000	%		02/15/12		$	3,166,680

Home Equity^(b) – 4.2%
Amortizing Residential Collateral Trust Series 2002-BC1M, Class A
	1,326,370		5.600			01/01/32			1,324,297
ContiMortgage Home Equity Loan Trust Series 1999-1, Class A7
	19,968		6.970			12/25/13			19,931
Countrywide Asset-Backed Certificates Series 2004-BC5, Class A2
	1,008,621		5.590			10/25/34			1,008,810
Countrywide Home Equity Loan Trust Series 2002-E, Class A
	2,817,283		5.580			10/15/28			2,826,200
Countrywide Home Equity Loan Trust Series 2003-A, Class A
	8,931,627		5.670			03/15/29			8,953,148
Countrywide Home Equity Loan Trust Series 2004-G, Class 2A
	1,960,895		5.540			12/15/29			1,965,196
Countrywide Home Equity Loan Trust Series 2004-S, Class 1A
	6,348,916		5.560			02/15/30			6,357,254
Countrywide Home Equity Loan Trust Series 2005-I, Class 2A
	12,523,449		5.550			02/15/36			12,503,881
Countrywide Home Equity Loan Trust Series 2006-H, Class 2A1B
	40,000,000		5.489			11/15/36			39,975,000
First Franklin Mortgage Loan Asset Backed Certificates Series 2004-FF11, Class 2A2
	6,843,043		5.600			01/25/35			6,850,529
Impac CMB Trust Series 2004-10, Class 2A
	6,913,736		5.640			03/25/35			6,935,904
Morgan Stanley ABS Capital I Series 2004-HE1, Class A4
	8,393,298		5.690			01/25/34			8,411,400
Popular ABS Mortgage Pass-Through Trust Series 2004-5, Class AV2
	2,039,582		5.660			12/25/34			2,041,814

									99,173,364

Manufactured Housing – 0.1%
Mid-State Trust Series 4, Class A
	1,963,425		8.330			04/01/30			2,026,098

Utilities – 0.3%
Massachusetts RRB Special Purpose Trust Series 1999-1, Class A5
	6,150,000		7.030			03/15/12			6,424,659

TOTAL ASSET-BACKED SECURITIES
(Cost $110,947,162)								$	110,790,801

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

GOLDMAN SACHS CORE FIXED INCOME FUND


Principal		Interest			Maturity
Amount*		Rate			Date		Value
U.S. Treasury Obligations – 6.6%

United States Treasury Bonds
$	31,100,000		4.500	%		02/15/36	$	30,016,352
United States Treasury Inflation Protected Securities
	6,882,682		1.875			07/15/13		6,664,907
	6,730,984		2.000			01/15/14		6,560,340
	10,924,665		2.000			07/15/14		10,641,301
	15,618,329		1.875			07/15/15		15,041,232
	4,828,122		2.000			01/15/16		4,690,443
	20,595,432		2.500			07/15/16		20,891,491
United States Treasury Notes
	2,000,000		5.625			05/15/08		2,025,600
	1,000,000		6.500			02/15/10		1,057,290
United States Treasury Principal-Only STRIPS^(e)
	560,000		0.000			05/15/18		325,802
	10,200,000		0.000			05/15/20		5,336,640
	1,800,000		0.000			08/15/20		928,355
	56,700,000		0.000			11/15/21		27,466,615
	6,250,000		0.000			11/15/22		2,886,250
	25,800,000		0.000			02/15/25		10,672,944
	27,700,000		0.000			11/15/26		10,582,342

TOTAL U.S. TREASURY OBLIGATIONS
(Cost $155,360,003)							$	155,787,904

Emerging Markets Debt – 0.3%

VTB Capital (Vneshtorgbank)^(a)
$	7,980,000		5.970	%		08/01/08	$	7,980,000
(Cost $7,980,000)

TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT – 94.7%
(Cost $2,232,550,739)							$	2,238,275,835

Repurchase Agreement^(g) – 9.3%

Joint Repurchase Agreement Account II
$	220,000,000		5.316	%		11/01/06	$	220,000,000
Maturity Value: $220,032,463
(Cost $220,000,000)

TOTAL INVESTMENTS – 104.0%
(Cost $2,452,550,739)							$	2,458,275,835

LIABILITIES IN EXCESS OF OTHER ASSETS – (4.0)%								(93,920,315	)

NET ASSETS – 100.0%							$	2,364,355,520


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


*	The principal amount of each security is stated in the currency in which the bond is denominated. All amounts shown are in U.S. dollars unless otherwise noted. See below.


Currency Description

EUR	=	Euro Currency


(a)	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Under procedures approved by the Board of Trustees, such securities have been determined to be liquid by the Investment Adviser and may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounts to $59,277,748, which represents approximately 2.5% of net assets as of October 31, 2006.

(b)	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2006.

(c)	Represents security with nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.

(d)	TBA (To Be Announced) securities are purchased on a forward commitment basis with an approximate principal amount and no defined maturity date. The actual principal and maturity date will be determined upon settlement when the specific mortgage pools are assigned. Total market value of TBA securities amounts to $36,119,367 which represents approximately 1.5% of net assets as of October 31, 2006.

(e)	Security issued with a zero coupon. Income is recognized through the accretion of discount.

(f)	A portion of this security is segregated as collateral for initial margin requirement on futures transactions.

(g)	Joint repurchase agreement was entered into on October 31, 2006. Additional information appears on page 55.



Investment Abbreviations:
CMBS	—	Commercial Mortgage Backed Securities
CMO	—	Collateralized Mortgage Obligations
FFCB	—	Federal Farm Credit Bank
FHLB	—	Federal Home Loan Bank
FHLMC	—	Federal Home Loan Mortgage Corp.
FNMA	—	Federal National Mortgage Association
GNMA	—	Government National Mortgage Association
PAC	—	Planned Amortization Class
REIT	—	Real Estate Investment Trust
REMIC	—	Real Estate Mortgage Investment Conduit
STRIPS	—	Separate Trading of Registered Interest and Principal of Securities

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

GOLDMAN SACHS CORE FIXED INCOME FUND

Schedule of Investments (continued)

October 31, 2006

ADDITIONAL INVESTMENT INFORMATION

FORWARD FOREIGN CURRENCY CONTRACTS — At October 31, 2006, the Fund had outstanding forward foreign currency exchange contracts, both to purchase and sell foreign currencies:


Open Forward Foreign Currency	Expiration		Value on		Current		Unrealized
Purchase Contracts	Date		Settlement Date		Value		Gain (Loss)

Australian Dollar		12/20/06	$	51,179,702	$	51,927,482	$	747,780
British Pound		12/20/06		63,532,090		64,271,560		739,470
Canadian Dollar		12/20/06		8,234,000		8,170,760		(63,240	)
Euro		12/20/06		37,317,000		37,659,327		342,327
Japanese Yen		12/20/06		14,954,000		15,054,289		100,289
New Zealand Dollar		12/20/06		22,395,000		22,879,338		484,338
Norwegian Krone		12/20/06		7,450,000		7,640,079		190,079
		12/20/06		7,821,158		7,781,363		(39,795	)
Swedish Krona		12/20/06		22,845,237		23,010,005		164,768

TOTAL OPEN FORWARD FOREIGN CURRENCY PURCHASE CONTRACTS			$	235,728,187	$	238,394,203	$	2,666,016


Open Forward Foreign Currency	Expiration		Value on		Current		Unrealized
Sale Contracts	Date		Settlement Date		Value		Gain (Loss)

Australian Dollar		12/20/06	$	30,532,361	$	31,670,863	$	(1,138,502	)
British Pound		11/16/06		2,698,374		2,719,707		(21,333	)
		12/20/06		22,276,000		22,754,332		(478,332	)
Canadian Dollar		12/20/06		16,076,491		15,924,739		151,752
Euro		11/29/06		4,137,670		4,169,341		(31,671	)
		12/20/06		56,002,398		56,430,525		(428,127	)
Japanese Yen		12/20/06		20,168,027		20,163,471		4,556
		12/20/06		40,000,839		40,025,994		(25,155	)
New Zealand Dollar		12/20/06		34,269,464		35,652,173		(1,382,709	)
Norwegian Krone		12/20/06		14,945,000		14,999,630		(54,630	)
Swedish Krona		12/20/06		15,600,000		15,760,335		(160,335	)
Swiss Franc		12/20/06		23,640,144		23,544,581		95,563
		12/20/06		7,450,000		7,591,912		(141,912	)

TOTAL OPEN FORWARD FOREIGN CURRENCY SALE CONTRACTS			$	287,796,768	$	291,407,603	$	(3,610,835	)

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

GOLDMAN SACHS CORE FIXED INCOME FUND

ADDITIONAL INVESTMENT INFORMATION (continued)

FUTURES CONTRACTS — At October 31, 2006, the following futures contracts were open:


	Number of
	Contracts			Settlement	Market			Unrealized
Type	Long (Short)			Month	Value			Gain (Loss)

Eurodollars		869		December 2006	$	205,594,537		$	1,707
Eurodollars		457		March 2007		108,286,150			84,946
Eurodollars		397		June 2007		94,237,875			(125,647	)
Eurodollars		314		September 2007		74,673,125			39,832
Eurodollars		151		December 2007		35,954,987			70,274
Eurodollars		158		March 2008		37,637,575			82,413
Eurodollars		92		June 2008		21,910,950			45,687
U.S. Treasury Bonds		327		December 2006		36,838,594			772,237
2 Year U.S. Treasury Notes		(1,202	)	December 2006		(245,696,312	)		306,283
5 Year U.S. Treasury Notes		(1,699	)	December 2006		(179,350,687	)		(799,074	)
10 Year U.S. Treasury Notes		(1,277	)	December 2006		(138,195,344	)		(1,264,517	)

TOTAL					$	51,891,450		$	(785,859	)

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

GOLDMAN SACHS CORE FIXED INCOME FUND

Schedule of Investments (continued)

October 31, 2006

ADDITIONAL INVESTMENT INFORMATION (continued)

SWAP CONTRACTS — At October 31, 2006, the Fund had outstanding swap contracts with the following terms:

INTEREST RATE SWAP CONTRACTS


					Rates Exchanged
							Upfront
	Notional				Payments	Payments	Payments
	Amount		Termination		received by	made by	made by		Unrealized
Swap Counterparty	(000s)		Date		the Fund	the Fund	the Fund		Gain (Loss)

Banc of America Securities LLC	$	60,000		12/27/06	3.427%	3 month LIBOR	$	—	$	207,261
Banc of America Securities LLC		100,000		10/14/08	3.514%	3 month LIBOR		—		(2,993,118	)
Banc of America Securities LLC^(a)		127,100		12/21/09	5.600%	3 month LIBOR		1,647,015		443,192
Banc of America Securities LLC		80,000		09/02/10	4.309%	3 month LIBOR		—		(2,125,442	)
Banc of America Securities LLC		65,000		10/06/10	4.702%	3 month LIBOR		—		(770,070	)
Deutsche Bank Securities, Inc.^(a)		112,800		12/20/11	5.600%	3 month LIBOR		2,219,729		583,906
Banc of America Securities LLC^(a)		60,000		12/20/11	5.600%	3 month LIBOR		1,109,027		385,670
Banc of America Securities LLC		65,000		04/19/12	4.547%	3 month LIBOR		—		(1,573,393	)
J.P. Morgan Securities, Inc.^(a)		100,000		12/20/13	5.650%	3 month LIBOR		1,882,500		1,459,601
Deutsche Bank Securities, Inc.^(a)		90,000		12/20/13	5.650%	3 month LIBOR		1,665,000		1,342,891
Banc of America Securities LLC		11,000		05/26/15	4.532%	3 month LIBOR		—		(332,961	)
Banc of America Securities LLC		25,000		10/19/15	4.965%	3 month LIBOR		—		(283,252	)
Bear Stearns & Co., Inc.		85,000		06/19/06	5.666%	3 month LIBOR		—		4,661,276
J.P. Morgan Securities, Inc.^(a)		69,800		12/20/16	5.700%	3 month LIBOR		2,194,421		859,778
Banc of America Securities LLC		80,000		03/23/20	3 month LIBOR	5.108%		—		664,835
Banc of America Securities LLC		9,000		03/30/35	5.320%	3 month LIBOR		—		79,977
Banc of America Securities LLC		10,000		04/09/35	5.265%	3 month LIBOR		—		7,007

TOTAL							$	10,717,692	$	2,617,158


(a)	Represents forward starting interest rate swaps whose effective dates of commencement of accruals and cash flows occur subsequent to October 31, 2006.

LIBOR — London Interbank Offered Rate

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

GOLDMAN SACHS CORE FIXED INCOME FUND

ADDITIONAL INVESTMENT INFORMATION (continued)

CREDIT DEFAULT SWAP CONTRACTS


										Upfront
			Notional		Rate					Payments
			Amount		Paid by			Termination		(received)			Unrealized
Referenced Obligation	Swap Counterparty		(000s)		Fund			Date		by the Fund			Loss

Protection Purchased:
First Data Corp. 5.625% 11/01/11		J.P. Morgan Chase Securities, Inc.	$	2,800		0.500	%		03/21/11	$	—		$	(20,829	)
First Data Corp. 5.625% 11/01/11		J.P. Morgan Chase Securities, Inc.		1,525		0.250			06/20/11		—			(6,737	)
PHH Corp. 7.125% 03/01/13		Bear Stearns & Co., Inc.		2,600		1.150			06/20/13		—			(28,094	)
Core Investment Grade Bond Trust		Deutsche Bank Securities, Inc.		231,900		0.650			12/20/16		(611,670	)		(1,012,842	)

TOTAL										$	(611,670	)	$	(1,068,502	)

TOTAL RETURN INDEX SWAP CONTRACTS

Rates Exchanged

Notional

Payments

Swap

Amount

Termination

Reference

received by

made by

Unrealized

Counterparty

(000s)

Date

Underlying

the Fund

Gain

Citibank, N.A.

25,000

03/31/07

Banc of America Securities LLC CMBS AAA 10 Yr Index

Any positive monthly duration adjusted return on the underlying index

Any negative monthly duration adjusted return on the underlying index

12,420

Banc of America Securities LLC

25,000

09/28/07

Banc of America Securities LLC CMBS AAA 10 Yr Index

Any positive monthly duration adjusted return on the underlying index

Any negative monthly duration adjusted return on the underlying index

6,425

TOTAL

18,845

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

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

Performance Summary

October 31, 2006 (Unaudited)

The following graph shows the value, as of October 31, 2006, of a $10,000 investment made on November 3, 2003 (commencement of operations) in the Separate Account Institutional Shares of the Goldman Sachs Investment Grade Credit Fund. For comparative purposes, the performance of the Fund’s benchmark, the Lehman Brothers U.S. Credit Index (“Lehman U.S. Credit 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 and Institutional Shares will vary from Separate Account Institutional Shares due to differences in fees and loads. In addition to the investment adviser’s decisions regarding issuer/ industry investment selection and allocation, other factors may affect Fund performance. These factors include, but are not limited to, Fund operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the Fund.

Investment Grade Credit Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested November 3, 2003 to October 31, 2006.


Average Annual Total Return through October 31, 2006	Since Inception		One Year
Class A (commenced November 3, 2003)
Excluding sales charges		4.08%		4.84%
Including sales charges		2.50%		0.11%

Institutional Class (commenced November 3, 2003)		4.57%		5.35%

Separate Account Institutional (commenced November 3, 2003)		4.59%		5.30%

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

Schedule of Investments

October 31, 2006


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – 92.0%

Automotive – 1.8%
DaimlerChrysler NA
$	400,000		8.500	%		01/18/31	$	480,661
DaimlerChrysler NA Holding Corp.^(a)
	380,000		5.870			09/10/07		380,949
Ford Motor Credit Co.
	1,700,000		5.700			01/15/10		1,577,220
General Motors Acceptance Corp.
	1,275,000		6.875			09/15/11		1,284,957

								3,723,787

Banks – 21.0%
ANZ Capital Trust I^(b)
	325,000		4.484			01/15/49		315,999
	800,000		5.360			12/29/49		779,748
Astoria Financial Corp.
	225,000		5.750			10/15/12		226,607
Banca Popolare di Bergamo Capital Trust^(a)
	EUR475,000		8.364			02/15/49		692,947
Bank United Corp.
$	250,000		8.875			05/01/07		254,156
Citigroup, Inc.
	589,000		7.250			10/15/11		638,057
Commonwealth Bank of Australia^(a)(b)
	1,325,000		6.024			03/29/49		1,328,338
Credit Suisse (USA), Inc.
	1,000,000		5.250			03/02/11		1,002,476
Credit Suisse First Boston London^(a)(b)
	1,625,000		7.900			05/29/49		1,644,885
Danske Bank A/S^(a)(b)
	300,000		7.400			06/15/10		303,829
Firstar Capital Trust I
	2,500,000		8.320			12/15/26		2,611,027
ForeningSparbanken AB (Swedbank)^(a)(b)
	500,000		7.500			05/01/49		500,000
Greater Bay Bancorp Series D
	2,700,000		5.125			04/15/10		2,672,954
GreenPoint Financial Corp.
	600,000		3.200			06/06/08		581,096
HBOS PLC^(a)(b)
	1,750,000		5.375			12/29/49		1,727,625
HSBC Capital Funding LP^(a)(b)
	1,050,000		4.610			06/27/49		981,790
HSBC USA, Inc.
	250,000		6.625			03/01/09		258,053
Huntington National Bank
	1,000,000		8.000			04/01/10		1,084,961
J.P. Morgan Chase & Co.
	550,000		6.625			03/15/12		584,521
Key Bank N.A.^(c)
	1,000,000		6.500			10/15/27		1,021,510
Lehman Brothers Holdings E-Capital Trust I^(a)
	675,000		6.173			08/19/65		679,561
Manufacturers & Traders Trust Co.^(a)
	1,495,000		5.585			12/28/20		1,484,414
Mizuho JGB Investment LLC^(a)(b)
	1,275,000		9.870			06/30/49		1,362,048
MUFG Capital Finance 1 Ltd.^(a)
	2,400,000		6.346			07/25/16		2,423,746
Nordbanken AB^(a)(b)
	2,380,000		8.950			11/12/09		2,604,655
North Fork Bancorp.^(a)
	1,350,000		5.000			08/15/12		1,345,833
PNC Funding Corp.
	600,000		7.500			11/01/09		638,069
Popular North America, Inc.
	1,775,000		5.200			12/12/07		1,768,180
	1,795,000		4.250			04/01/08		1,767,049
RBS Capital Trust II^(a)
	1,000,000		5.512			09/30/49		984,730
Resona Bank Ltd.^(a)(b)
	EUR925,000		4.125			09/27/49		1,148,970
	1,475,000		5.850			09/29/49		1,444,829
Resona Preferred Global Securities Ltd.^(a)(b)
$	2,000,000		7.191			07/30/49		2,097,040
Royal Bank of Scotland Group PLC
	400,000		9.118			03/31/49		445,465
Sovereign Bank
	1,000,000		4.000			02/01/08		983,325
	300,000		5.125			03/15/13		294,568
	455,000		4.375	^(a)		08/01/13		445,968
Tokai Preferred Capital Co. LLC^(a)(b)
	650,000		9.980			12/29/49		694,962
Unicredito Italiano Capital Trust^(a)(b)
	500,000		9.200			10/05/49		565,038
Wachovia Capital Trust III^(a)
	1,825,000		5.800			08/29/49		1,841,073
Washington Mutual Bank
	500,000		5.950			05/20/13		511,207

								44,741,309

Brokerage – 1.0%
Morgan Stanley
	2,200,000		5.050			01/21/11		2,187,992

Captive Financial – 0.8%
Nelnet, Inc.
	1,760,000		5.125			06/01/10		1,723,262

Consumer Cyclical Services – 0.6%
Sabre Holdings Corp.
	1,300,000		6.350			03/15/16		1,292,639

Diversified Manufacturing – 1.7%
Tyco International Group Participation Certificate^(b)
	2,350,000		4.436			06/15/07		2,333,719
Tyco International Group SA
	1,300,000		6.750			02/15/11		1,375,329

								3,709,048

Electric – 8.5%
Arizona Public Service Co.
	2,000,000		6.875			08/01/36		2,128,156

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

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – (continued)

Electric – (continued)
Calenergy, Inc.
$	1,575,000		7.630	%		10/15/07	$	1,607,713
	280,000		7.520			09/15/08		291,174
Centerpoint Energy, Inc.
	2,100,000		5.875			06/01/08		2,111,731
Centerpoint Energy, Inc. Series B
	350,000		7.250			09/01/10		370,376
FirstEnergy Corp. Series C
	1,745,000		7.375			11/15/31		2,036,309
MidAmerican Energy Holdings Co.
	2,100,000		6.125			04/01/36		2,159,508
Nisource Finance Corp.^(a)
	500,000		5.968			11/23/09		499,955
Ohio Edison Co.
	1,500,000		6.875			07/15/36		1,667,292
Progress Energy, Inc.
	2,175,000		5.625			01/15/16		2,180,524
	1,000,000		7.000			10/30/31		1,125,810
Southwestern Public Service Cos.
	375,000		6.000			10/01/36		376,015
Tampa Electric Co.
	275,000		6.550			05/15/36		296,604
TXU Corp. Series O
	1,225,000		4.800			11/15/09		1,197,249

								18,048,416

Energy – 2.5%
Canadian Natural Resources Ltd.
	925,000		6.500			02/15/37		951,418
Hess Corp.
	1,950,000		7.125			03/15/33		2,171,631
Kerr-McGee Corp.
	800,000		6.950			07/01/24		867,367
XTO Energy, Inc.
	1,200,000		6.250			04/15/13		1,243,423

								5,233,839

Entertainment – 0.9%
Time Warner Entertainment Co.
	1,290,000		8.375			03/15/23		1,499,960
Time Warner Entertainment Co. LP
	325,000		7.250			09/01/08		333,863

								1,833,823

Food & Drug Retailing – 0.1%
Fred Meyer, Inc.
	250,000		7.450			03/01/08		256,492

Gaming – 1.1%
Harrahs Operating Co., Inc.
	2,425,000		5.500			07/01/10		2,329,123

Life Insurance – 7.6%
Americo Life, Inc.^(b)
	550,000		7.875			05/01/13		554,620
AmerUs Group Co.
	1,575,000		5.950			08/15/15		1,614,449
AXA Financial, Inc.
	805,000		7.750			08/01/10		870,141
Lincoln National Corp.
	1,000,000		6.200			12/15/11		1,037,898
	1,600,000		7.000	^(a)		05/17/66		1,684,254
Phoenix Life Insurance Co.^(b)
	2,275,000		7.150			12/15/34		2,458,397
PRICOA Global Funding I^(b)
	600,000		4.200			01/15/10		581,152
Reinsurance Group of America, Inc.
	625,000		6.750			12/15/11		656,779
	2,250,000		6.750	^(a)		12/15/65		2,234,078
Royal & Sun Alliance Insurance Group PLC
	GBP225,000		8.500			07/29/49		495,939
SL Finance PLC
	EUR650,000		6.375			07/12/22		910,414
The MONY Group, Inc.
$	1,000,000		8.350			03/15/10		1,091,780
ZFS Finance USA Trust I^(a)(b)
	1,875,000		6.150			12/15/65		1,885,787

								16,075,688

Media – Cable – 3.4%
Comcast Cable Communications Holdings, Inc.
	575,000		6.875			06/15/09		597,440
	1,350,000		9.455			11/15/22		1,753,378
Cox Communications, Inc.
	850,000		4.625			01/15/10		830,133
Cox Enterprises, Inc.^(b)
	3,275,000		4.375			05/01/08		3,215,490
Viacom, Inc.
	850,000		5.750			04/30/11		851,058

								7,247,499

Media – Non-Cable – 0.8%
Clear Channel Communications, Inc.
	1,700,000		8.000			11/01/08		1,772,386

Noncaptive – Financial – 7.7%
American General Finance Corp.^(c)
	1,825,000		8.450			10/15/09		1,981,466
Capital One Bank
	325,000		5.000			06/15/09		322,866
Capital One Financial Corp.
	1,775,000		5.700			09/15/11		1,799,573
GATX Financial Corp.
	3,400,000		5.125			04/15/10		3,362,603
MGIC Investment Corp.
	1,300,000		5.625			09/15/11		1,305,811
Nelnet, Inc.^(a)
	625,000		7.400			09/29/36		632,443
PHH Corp.
	3,088,000		6.000			03/01/08		3,094,821
	750,000		7.125			03/01/13		766,126

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

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – (continued)

Noncaptive – Financial – (continued)
Waddell & Reed Financial, Inc.
$	3,250,000		5.600	%		01/15/11	$	3,226,555

								16,492,264

Pipelines – 3.3%
Energy Transfer Partners
	1,375,000		5.650			08/01/12		1,377,204
	2,000,000		5.950			02/01/15		2,018,710
Enterprise Products Partners LP
	1,805,000		4.950			06/01/10		1,774,939
	275,000		5.000			03/01/15		259,914
ONEOK Partners LP
	1,375,000		5.900			04/01/12		1,394,715
Panhandle Eastern Pipeline
	150,000		4.800			08/15/08		148,677

								6,974,159

Property/Casualty Insurance – 6.4%
Ace Capital Trust II
	250,000		9.700			04/01/30		341,000
AON Capital Trust A
	1,000,000		8.205			01/01/27		1,162,539
Arch Capital Group Ltd.
	1,245,000		7.350			05/01/34		1,364,362
Aspen Insurance Holdings Ltd.
	1,025,000		6.000			08/15/14		1,003,216
CNA Financial Corp.
	520,000		6.750			11/15/06		520,178
	350,000		6.600			12/15/08		358,427
	1,000,000		5.850			12/15/14		1,006,080
Endurance Specialty Holdings Ltd.
	500,000		6.150			10/15/15		498,033
	775,000		7.000			07/15/34		804,298
Liberty Mutual Group^(b)
	2,040,000		7.000			03/15/34		2,110,746
Marsh & McLennan Cos., Inc.
	1,000,000		5.150			09/15/10		958,848
	1,000,000		5.750			09/15/15		963,638
QBE Insurance Group Ltd.^(a)(b)
	855,000		5.647			07/01/23		833,613
Symetra Financial Corp.^(b)
	1,600,000		6.125			04/01/16		1,622,154
Zurich Capital Trust I^(b)
	125,000		8.376			06/01/37		131,347

								13,678,479

REIT – 13.1%
Arden Realty LP
	1,160,000		5.200			09/01/11		1,162,192
BRE Properties Inc.
	3,525,000		7.450			01/15/11		3,792,005
Camden Property Trust
	1,650,000		4.375			01/15/10		1,608,219
Colonial Realty LP
	1,750,000		6.050			09/01/16		1,770,212
EOP Operating LP
	1,692,000		7.750			11/15/07		1,731,475
Health Care Property Investors, Inc.
	1,825,000		5.950			09/15/11		1,845,966
Heritage Property Investment Trust
	885,000		4.500			10/15/09		864,206
iStar Financial, Inc. Series B
	3,200,000		5.700			03/01/14		3,187,117
Liberty Property LP
	225,000		7.750			04/15/09		236,057
Pan Pacific Retail Properties, Inc.
	1,350,000		5.950			06/01/14		1,373,699
Post Apartment Homes LP
	1,500,000		7.700			12/20/10		1,615,518
	3,000,000		6.300			06/01/13		3,091,164
ProLogis
	2,250,000		5.500			04/01/12		2,251,676
Shurgard Storage Centers, Inc.
	2,050,000		7.750			02/22/11		2,217,331
Simon Property Group LP
	200,000		7.000	^(c)		06/15/08		205,170
	1,000,000		5.600			09/01/11		1,011,107

								27,963,114

Software – 1.1%
Oracle Corp. and Ozark Holdings, Inc.
	2,400,000		5.000			01/15/11		2,383,697

Technology – 0.7%
First Data Corp.
	1,375,000		5.625			11/01/11		1,405,260

Tobacco – 1.2%
Altria Group, Inc.
	275,000		7.000			11/04/13		301,161
	893,000		7.750			01/15/27		1,095,566
Imperial Tobacco Overseas BV
	1,200,000		7.125			04/01/09		1,244,343

								2,641,070

Wireless Telecommunications – 1.6%
America Movil SA de CV
	800,000		5.500			03/01/14		781,408
AT&T Wireless Services, Inc.
	950,000		7.875			03/01/11		1,041,553
	900,000		8.750			03/01/31		1,178,054
Intelsat
	350,000		5.250			11/01/08		338,625

								3,339,640

Wirelines Telecommunications – 5.1%
Ameritech Capital Funding
	575,000		6.250			05/18/09		583,647
Bellsouth Telecommunications, Inc.
	426,000		6.125			09/23/08		431,306

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

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

Schedule of Investments (continued)

October 31, 2006


Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – (continued)

Wirelines Telecommunications – (continued)
Deutsche Telekom International Finance BV
$	550,000		5.375	%		03/23/11	$	549,053
	1,650,000		8.250			06/15/30		2,047,425
Embarq Corp.
	500,000		7.995			06/01/36		531,700
France Telecom SA
	EUR175,000		8.125			01/28/33		306,842
GTE Corp.
$	1,260,000		7.510			04/01/09		1,319,430
Sprint Capital Corp.
	850,000		6.875			11/15/28		871,986
Telecom Italia Capital
	700,000		4.000			01/15/10		666,728
	1,700,000		4.950			09/30/14		1,576,869
TPSA Finance BV
	350,000		7.750	^(b)		12/10/08		365,565
	1,500,000		7.625			01/30/11		1,616,933

								10,867,484

TOTAL CORPORATE BONDS
(Cost $196,719,956)							$	195,920,470

Emerging Markets Debt – 0.4%

Korea Development Bank
$	150,000		5.750	%		09/10/13	$	153,170
VTB Capital (Vneshtorgbank)^(a)(b)
	700,000		5.970			08/01/08		700,000

TOTAL EMERGING MARKETS DEBT
(Cost $852,500)							$	853,170

U.S. Treasury Obligations – 0.7%

United States Treasury Bonds
$	900,000		4.500	%		02/15/36	$	865,055
United States Treasury Principal-Only STRIPS^(d)
	1,500,000		0.000			11/15/26		573,051

TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,390,703)							$	1,438,106

TOTAL INVESTMENTS BEFORE REPURCHASE AGREEMENT — 93.1%
(Cost $198,963,159)							$	198,211,746

Repurchase Agreement^(e) – 3.9%

Joint Repurchase Agreement Account II
$	8,300,000		5.316	%		11/01/06	$	8,300,000
Maturity Value: $8,301,226
(Cost $8,300,000)

TOTAL INVESTMENTS — 97.0%
(Cost $207,263,159)							$	206,511,746

OTHER ASSETS IN EXCESS OF LIABILITIES — 3.0%								6,346,826

NET ASSETS — 100.0%							$	212,858,572


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


*	The principal amount of each security is stated in the currency in which the bond is denominated. All amounts shown are in U.S. dollars unless otherwise noted. See below.


Currency Description

EUR	=	Euro Currency
GBP	=	British Pounds


(a)	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2006.

(b)	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Under procedures approved by the Board of Trustees, such securities have been determined to be liquid by the Investment Adviser and may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounts to $34,292,346, which represents approximately 16.1% of net assets as of October 31, 2006.

(c)	Securities with “Put” features with resetting interest rates. Maturity dates disclosed are the final maturity dates.

(d)	Security issued with a zero coupon. Income is recognized through the accretion of discount.

(e)	Joint repurchase agreement was entered into on October 31, 2006. Additional information appears on page 55.

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

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

ADDITIONAL INVESTMENT INFORMATION

FORWARD FOREIGN CURRENCY CONTRACTS — At October 31, 2006, the Fund had outstanding forward foreign currency exchange contracts, to sell foreign currencies:


Open Forward Foreign Currency	Expiration		Value on		Current		Unrealized
Sale Contract	Date		Settlement Date		Value		Loss

British Pound		11/16/06	$	496,924	$	500,853	$	(3,929	)
Euro		11/29/06		3,051,060		3,074,414		(23,354	)

TOTAL OPEN FORWARD FOREIGN CURRENCY SALE CONTRACT			$	3,547,984	$	3,575,267	$	(27,283	)

FUTURES CONTRACTS — At October 31, 2006, the following futures contracts were open:


	Number of
	Contracts			Settlement	Market			Unrealized
Type	Long (Short)			Month	Value			Gain (Loss)

Eurodollars		(12	)	March 2007	$	(2,843,400	)	$	27,859
Eurodollars		8		June 2007		1,899,000			1,473
Eurodollars		6		September 2007		1,426,875			1,967
Eurodollars		6		December 2007		1,428,675			2,792
Eurodollars		7		March 2008		1,667,488			3,664
Eurodollars		4		June 2008		952,650			1,986
U.S. Treasury Bonds		21		December 2006		2,365,781			16,368
2 Year U.S. Treasury Notes		(69	)	December 2006		(14,104,031	)		(15,642	)
5 Year U.S. Treasury Notes		(173	)	December 2006		(18,262,313	)		(123,619	)
10 Year U.S. Treasury Notes		102		December 2006		11,038,313			57,261

TOTAL					$	(14,430,962	)	$	(25,891	)

SWAP CONTRACTS — At October 31, 2006, the Fund had outstanding swap contracts with the following terms:

INTEREST RATE SWAP CONTRACTS


					Rates Exchanged

	Notional				Payments			Payments
Swap	Amount		Termination		received by			made by	Unrealized
Counterparty	(000s)		Date		the Fund			the Fund	Gain (Loss)

Banc of America Securities LLC	$	8,000		09/02/10		4.309	%	3 month LIBOR	$	(212,544	)
Banc of America Securities LLC		5,000		05/23/12		4.374		3 month LIBOR		(118,944	)
Banc of America Securities LLC		7,000		10/19/15		4.965		3 month LIBOR		(79,310	)
Banc of America Securities LLC		4,000		03/19/35		5.288		3 month LIBOR		15,618
Banc of America Securities LLC		2,800		04/09/35		5.266		3 month LIBOR		1,962

TOTAL									$	(393,218	)

LIBOR — London Interbank Offered Rate

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

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

Schedule of Investments (continued)

October 31, 2006

ADDITIONAL INVESTMENT INFORMATION (continued)

CREDIT DEFAULT SWAP CONTRACTS


									Upfront
		Notional		Rate					Payments
		Amount		Paid by			Termination		(received)			Unrealized
Referenced Obligation	Swap Counterparty	(000s)		Fund			Date		by the Fund			Loss

Protection Purchased
First Data Corp. 5.625%, 11/1/2011	J.P. Morgan Securities, Inc.	$	1,300		0.500	%		03/21/11	$	—		$	(9,662	)
First Data Corp. 5.625%, 11/1/2011	J.P. Morgan Securities, Inc.		210		0.250			06/20/11		—			(928	)
Autozone, Inc. 5.875%, 10/15/2012	Bear Stearns & Co., Inc.		2,000		0.680			06/20/11		—			(23,777	)
Bear Stearns Co., Inc. 7.625%, 12/7/2009	J.P. Morgan Securities, Inc.		4,000		0.300			06/20/13		—			(14,806	)
Centex Corp. 5.250%, 6/15/2015	Bear Stearns & Co., Inc.		2,000		0.845			06/20/13		—			(22,822	)
Lowe’s Co., Inc. 8.250%, 6/1/2010	Banc of America Securities LLC		5,000		0.180			06/20/13		—			(1,498	)
Core Investment Grade Bond Trust	Deutsche Bank Securities, Inc.		33,500		0.650			12/20/16		(98,576	)		(134,442	)

TOTAL									$	(98,576	)	$	(207,935	)

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

ADDITIONAL INVESTMENT INFORMATION (continued)

JOINT REPURCHASE AGREEMENT ACCOUNT II — At October 31, 2006, the Funds had undivided interests in the Joint Repurchase Agreement Account II, as follows:


Fund	Principal Amount

Government Income	$	112,200,000

U.S. Mortgages		14,600,000

Core Fixed Income		220,000,000

Investment Grade Credit		8,300,000


	Principal		Interest			Maturity	Maturity
Repurchase Agreements	Amount		Rate			Date	Value

ABN Amro, Inc.	$	500,000,000		5.32	%	11/01/06	$	500,073,889

Banc of America Securities LLC		2,750,000,000		5.31		11/01/06		2,750,405,625

Barclays Capital PLC		200,000,000		5.31		11/01/06		200,029,500

Barclays Capital PLC		2,000,000,000		5.32		11/01/06		2,000,295,557

Bear Stearns		500,000,000		5.32		11/01/06		500,073,889

Credit Suisse Securities (USA) LLC		750,000,000		5.32		11/01/06		750,110,834

Greenwich Capital Markets		300,000,000		5.32		11/01/06		300,044,334

Merrill Lynch		500,000,000		5.31		11/01/06		500,073,750

Wachovia Bank		250,000,000		5.31		11/01/06		250,036,875

UBS Securities LLC		2,700,200,000		5.32		11/01/06		2,700,399,027

TOTAL	$	10,450,200,000					$	10,451,543,280

At October 31, 2006, the Joint Repurchase Agreement Account II was fully collateralized by Federal Home Loan Bank, 0.00% to 5.75%, due 12/14/06 to 09/22/15; Federal Home Loan Mortgage Association, 2.35% to 9.50%, due 11/17/06 to 09/01/36; Federal National Mortgage Association, 0.00% to 11.00%, due 11/1/06 to 11/01/36; Government National Mortgage Association, 4.50% to 9.00%, due 10/15/09 to 10/15/36 and U.S. Treasury Notes, 4.25% to 4.88% due 03/31/11 to 01/15/14. The aggregate market value of the collateral, including accrued interest, was $10,679,289,697.

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Statements of Assets and Liabilities

October 31, 2006


		Government			U.S. Mortgages			Core Fixed			Investment Grade
		Income Fund			Fund			Income Fund			Credit Fund

Assets:

Investments in securities, at value (identified cost $537,624,178, $482,694,739, $2,232,550,739 and $198,963,159, respectively)		$	534,844,155		$	481,474,370		$	2,238,275,835		$	198,211,746
Repurchase agreement, at value			112,200,000			14,600,000			220,000,000			8,300,000
Cash^(a)			10,894,581			3,746,965			38,894,865			3,054,450
Foreign currencies, at value (identified cost $687 for Core Fixed Income Fund)			—			—			696			—
Receivables:
	Investment securities sold		14,066,740			36,788,069			51,691,509			3,730,997
	Swap contracts, at value (includes upfront payments made of $3,336,775, $992,119, $10,717,692 and $0, respectively)		5,915,513			1,451,883			21,431,931			17,580
	Interest, at value		3,348,872			1,649,853			16,498,984			3,242,651
	Fund shares sold		844,590			—			6,087,540			—
	Reimbursement from investment adviser		51,652			14,789			—			17,091
	Due from broker		25,438			—			—			—
	Forward foreign currency exchange contracts, at value		—			—			3,020,922			—
Other assets, at value			2,606			1,959			5,530			556

Total assets			682,194,147			539,727,888			2,595,907,812			216,575,071

Liabilities:

Payables:
	Investment securities purchased		37,823,650			105,726,458			204,517,514			2,537,750
	Swap contracts, at value (includes upfront payments received $0, $0, $611,670 and $98,576, respectively)		2,605,091			793,521			9,758,408			717,309
	Fund shares repurchased		2,071,622			56			8,132,099			34
	Income distribution		326,685			301,430			2,812,936			204,021
	Forward foreign currency exchange contracts, at value		—			—			3,965,741			27,283
	Amounts owed to affiliates		482,326			127,174			1,107,084			62,354
	Due to broker		—			184,381			865,292			7,675
Accrued expenses			233,219			189,630			393,218			160,073

Total liabilities			43,543,293			107,322,650			231,552,292			3,716,499

Net Assets:

Paid-in capital			651,009,122			435,025,598			2,383,745,773			218,129,321
Accumulated undistributed (distributions in excess of) net investment income			2,438,600			889,846			(3,125,486	)		277,965
Accumulated net realized loss on investments, futures, swaps and foreign currency related transactions			(12,474,096	)		(1,615,491	)		(21,835,885	)		(4,145,521	)
Net unrealized appreciation (depreciation) on investments, futures, swaps and translation of assets and liabilities denominated in foreign currencies			(2,322,772	)		(1,894,715	)		5,571,118			(1,403,193	)

NET ASSETS		$	638,650,854		$	432,405,238		$	2,364,355,520		$	212,858,572

Net Assets:
	Class A	$	432,761,594		$	6,972,976		$	714,876,529		$	3,420,358
	Class B		18,712,710			—			22,971,472			—
	Class C		16,931,338			—			20,937,147			—
	Institutional		146,783,760			117,497,444			1,558,970,671			3,316,684
	Service		23,461,452			—			46,599,701			—
	Separate Account Institutional Shares		—			307,934,818			—			206,121,530

Shares Outstanding:
	Class A		29,555,889			704,293			72,780,585			343,719
	Class B		1,277,939			—			2,329,026			—
	Class C		1,156,993			—			2,121,786			—
	Institutional		10,035,821			11,852,914			158,124,682			332,724
	Service		1,605,403			—			4,724,351			—
	Separate Account Institutional Shares		—			31,085,655			—			20,691,618

Total shares outstanding, $0.001 par value (unlimited number of shares authorized)			43,632,045			43,642,862			240,080,430			21,368,061

Net asset value, offering and redemption price per share:^(b)
	Class A		$14.64		$	9.90		$	9.82		$	9.95
	Class B		14.64			—			9.86			—
	Class C		14.63			—			9.87			—
	Institutional		14.63			9.91			9.86			9.97
	Service		14.61			—			9.86			—
	Separate Account Institutional Shares		—			9.91			—			9.96


(a)	Includes restricted cash of $3,000,000, $450,000 and $275,000, relating to initial margin requirements and collateral on futures transactions for Government Income, U.S. Mortgages and Investment Grade Credit, respectively, and includes restricted cash of $6,519,266, $2,863,549, $33,559,856 and $2,699,840 relating to swap contracts for Government Income, U.S. Mortgages, Core Fixed Income and Investment Grade Credit, respectively.
(b)	Maximum public offering price per share for Class A shares of Government Income, U.S. Mortgages, Core Fixed Income and Investment Grade Credit (NAV per share multiplied by 1.0471) is $15.33, $10.37, $10.28, and $10.42, 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.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Statements of Operations

For the Year Ended October 31, 2006


		Government			U.S. Mortgages			Core Fixed			Investment Grade
		Income Fund			Fund			Income Fund			Credit Fund

Investment income:

Interest^(a)		$	39,267,344		$	23,877,664		$	111,009,476		$	11,993,578

Total income			39,267,344			23,877,664			111,009,476			11,993,578


Expenses:

Management fees			4,481,364			1,917,539			8,316,527			854,824
Distribution and Service fees^(b)			2,036,968			19,601			2,226,502			9,551
Transfer Agent fees^(b)			1,169,147			201,163			1,771,193			90,067
Custody and accounting fees			315,453			311,423			474,492			118,412
Printing fees			103,089			81,586			200,539			63,015
Registration fees			146,339			43,728			125,688			40,583
Professional fees			77,345			77,345			117,651			80,039
Service share fees			95,515			49,742			197,790			3,665
Trustee fees			16,201			16,201			16,201			16,201
Other			120,745			34,572			142,820			23,050

Total expenses			8,562,166			2,752,900			13,589,403			1,299,407

Less — expense reductions			(813,458	)		(1,010,624	)		(212,151	)		(527,076	)

Net expenses			7,748,708			1,742,276			13,377,252			772,331

NET INVESTMENT INCOME			31,518,636			22,135,388			97,632,224			11,221,247


Realized and unrealized gain (loss) on investment, futures, swaps and foreign currency related transactions:

Net realized gain (loss) from:
	Investment transactions		(7,881,384	)		(37,744	)		(8,333,961	)		(2,672,331	)
	Futures transactions		(4,241,535	)		(146,131	)		(6,593,357	)		578,868
	Swap contracts		(2,001,989	)		(158,362	)		(8,178,308	)		(1,693,487	)
	Foreign currency related transactions		—			—			(7,245,498	)		(183,354	)
Net change in unrealized gain (loss) on:
	Investments		6,699,801			4,348,418			26,190,788			3,714,878
	Futures		303,462			(167,971	)		(850,613	)		(225,191	)
	Swap contracts		4,337,671			926,943			13,975,767			4,912
	Translation of assets and liabilities denominated in foreign currencies		—			—			(2,168,739	)		(25,150	)

Net realized and unrealized gain (loss) on investment, futures, swaps and foreign currency related transactions			(2,783,974	)		4,765,153			6,796,079			(500,855	)

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		$	28,734,662		$	26,900,541		$	104,428,303		$	10,720,392


(a)	Net of $1,269 in foreign withholding tax for the Investment Grade Credit Fund.
(b)	Class specific Distribution and Service and Transfer Agent fees were as follows:


	Distribution and Service Fees						Transfer Agent Fees												Service Share Fees

																	Separate				Separate
																	Account				Account
Fund	Class A		Class B		Class C		Class A		Class B		Class C		Institutional		Service		Institutional		Service		Institutional

Government Income	$	1,646,136	$	213,883	$	176,949	$	1,053,527	$	34,221	$	28,312	$	45,446	$	7,641		—		—		—
U.S. Mortgages		19,601		—		—		12,546		—		—		36,657		—	$	151,960	$	45,822	$	3,920
Core Fixed Income		1,757,491		253,996		215,015		1,124,795		40,639		34,403		555,533		15,823		—		—		—
Investment Grade Credit		9,551		—		—		6,113		—		—		1,404		—		82,550		1,755		1,910

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Statements of Changes in Net Assets


		Government Income Fund

		For the			For the
		Year Ended			Year Ended
		October 31, 2006			October 31, 2005

From operations:

Net investment income		$	31,518,636		$	20,216,131
Net realized gain (loss) on investment, futures, swaps and foreign currency related transactions			(14,124,908	)		4,302,059
Net change in unrealized gain (loss) on investments, futures, swaps and translation of assets and liabilities denominated in foreign currencies			11,340,934			(19,757,697	)

Net increase (decrease) in net assets from operations			28,734,662			4,760,493

Distributions to shareholders:

From net investment income
	Class A Shares		(24,629,669	)		(15,966,212	)
	Class B Shares		(650,709	)		(533,992	)
	Class C Shares		(542,468	)		(370,892	)
	Institutional Shares		(4,808,529	)		(1,564,131	)
	Service Shares		(711,718	)		(322,759	)
	Separate Account Institutional Shares		—			—
From net realized gains
	Class A Shares		(160,181	)		(5,845,096	)
	Class B Shares		(5,062	)		(362,623	)
	Class C Shares		(3,803	)		(237,517	)
	Institutional Shares		(12,822	)		(745,239	)
	Service Shares		(3,776	)		(116,638	)
	Separate Account Institutional Shares		—			—
From capital
	Class A Shares		—			—
	Class B Shares		—			—
	Class C Shares		—			—
	Institutional Shares		—			—
	Service Shares		—			—

Total distributions to shareholders			(31,528,737	)		(26,065,099	)

From share transactions:

Net proceeds from sales of shares			490,086,040			452,723,542
Proceeds received in connection with merger			—			—
Reinvestment of dividends and distributions			28,194,885			24,158,646
Cost of shares repurchased			(727,312,932	)		(232,780,488	)

Net increase (decrease) in net assets resulting from share transactions			(209,032,007	)		244,101,700

TOTAL INCREASE (DECREASE)			(211,826,082	)		222,797,094

Net assets:

Beginning of year			850,476,936			627,679,842

End of year		$	638,650,854		$	850,476,936

Accumulated undistributed (distributions in excess of) net investment income		$	2,438,600		$	5,254,578

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS


U.S. Mortgages Fund						Core Fixed Income Fund						Investment Grade Credit Fund

For the			For the			For the			For the			For the			For the
Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
October 31, 2006			October 31, 2005			October 31, 2006			October 31, 2005			October 31, 2006			October 31, 2005



$	22,135,388		$	11,749,541		$	97,632,224		$	56,281,074		$	11,221,247		$	6,144,224
	(342,237	)		1,244,830			(30,351,124	)		24,313,407			(3,970,304	)		(506,457	)
	5,107,390			(7,922,884	)		37,147,203			(58,064,406	)		3,469,449			(5,666,468	)

	26,900,541			5,071,487			104,428,303			22,530,075			10,720,392			(28,701	)



	(327,343	)		(315,229	)		(27,592,559	)		(22,356,546	)		(173,533	)		(140,714	)
	—			—			(809,299	)		(883,632	)		—			—
	—			—			(683,475	)		(672,754	)		—			—
	(4,165,860	)		(3,367,214	)		(59,364,208	)		(40,113,425	)		(173,199	)		(95,385	)
	—			—			(1,497,789	)		(1,048,118	)		—			—
	(17,156,726	)		(9,159,690	)		—			—			(10,283,179	)		(5,873,577	)
	—			(13,456	)		(4,057,820	)		(6,881,068	)		—			(8,899	)
	—			—			(173,446	)		(394,357	)		—			—
	—			—			(143,326	)		(302,043	)		—			—
	—			(2,109,001	)		(6,915,957	)		(10,458,548	)		—			(269,174	)
	—			(1,830,428	)		(198,051	)		(285,885	)		—			—
	—			—			—			—			—			(293	)
	—			—			(666,129	)		—			—			—
	—			—			(19,538	)		—			—			—
	—			—			(16,500	)		—			—			—
	—			—			(1,433,147	)		—			—			—
	—			—			(36,159	)		—			—			—

	(21,649,929	)		(16,795,018	)		(103,607,403	)		(83,396,376	)		(10,629,911	)		(6,388,042	)



	293,021,211			584,326,694			1,051,438,670			958,769,563			68,516,397			181,422,818
	—			—			230,276,588			73,493,151			—			—
	18,063,365			13,333,622			70,943,055			57,569,645			8,219,129			5,592,276
	(353,767,406	)		(338,784,172	)		(829,727,761	)		(648,011,975	)		(63,423,525	)		(53,666,553	)

	(42,682,830	)		258,876,144			522,930,552			441,820,384			13,312,001			133,348,541

	(37,432,218	)		247,152,613			523,751,452			380,954,083			13,402,482			126,931,798



	469,837,456			222,684,843			1,840,604,068			1,459,649,985			199,456,090			72,524,292

$	432,405,238		$	469,837,456		$	2,364,355,520		$	1,840,604,068		$	212,858,572		$	199,456,090

$	889,846		$	(75,909	)	$	(3,125,486	)	$	(695,234	)	$	277,965		$	119,287

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements

October 31, 2006

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 Goldman Sachs Government Income Fund (“Government Income”), Goldman Sachs U.S. Mortgages Fund (“U.S. Mortgages”), Goldman Sachs Core Fixed Income Fund (“Core Fixed Income”) and Goldman Sachs Investment Grade Credit Fund (“Investment Grade Credit”) (collectively, the “Funds” or individually a “Fund”). Each Fund is a diversified portfolio of the Trust. U.S. Mortgages and Investment Grade Credit offer three classes of shares — Class A, Institutional and Separate Account Institutional. Government Income and Core Fixed Income offer five classes of shares — Class A, Class B, Class C, Institutional and Service. Class A shares of the Funds charge a maximum initial sales charge of 4.50%. The contingent deferred sales charge for Class B shares is 5.00% maximum declining to zero after six years for Government Income and Core Fixed Income. The Class C shares of Government Income and Core Fixed Income have a contingent deferred sales charge of 1.00% during the first 12 months. Institutional, Service and Separate Account Institutional shares are not subject to a sales charge. Goldman, Sachs & Co. (“Goldman Sachs”) as distributor of the Funds receives such sales loads of which a certain portion may be retained.

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 — Portfolio securities for which market quotations are readily available are valued at market value on the basis of quotations furnished by a pricing service or provided by dealers in such securities. Short-term debt obligations maturing in sixty days or less are valued at amortized cost, which approximates market value. Portfolio securities for which market quotations are not readily available or are deemed not to reflect market value by the investment adviser are valued based on yield equivalents, pricing matrices or other sources, under valuation procedures established 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. 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 Funds based upon the relative proportion of net assets of each class.

Certain mortgage security paydown gains and losses are recorded as interest income (loss) and are included in interest income in the accompanying Statements of Operations. Original issue discounts (OID) on debt securities are accreted to interest income over the life of the security with a corresponding increase in the cost basis of that security. Market discounts and market premiums on debt securities are accreted/amortized to interest income over the expected life of the security with a corresponding adjustment in the cost basis of that security.

Pursuant to applicable law and procedures adopted by the Trust’s Board of Trustees, securities transactions in portfolio securities (including futures transactions) may be effected from time to time through Goldman Sachs or an affiliate. In order for Goldman Sachs or an affiliate, acting as agent, to effect securities or futures transactions for a Fund, the commissions, fees or other remuneration received by Goldman Sachs or an affiliate must be reasonable and fair compared to the commissions, fees or other remuneration received by other brokers in connection with comparable transactions involving similar securities or futures contracts.

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Administration Plans. Each class of shares of the Funds separately bear its respective class-specific Transfer Agency fees. Class A and Institutional shareholders of U.S. Mortgages and Investment Grade Credit bear their respective class specific Account Services fees.

D. Federal Taxes and Distribution to Shareholders — It is each Fund’s policy to comply with the requirements of the Internal Revenue Code (the “Code”) applicable to regulated investment companies and to distribute each year substantially all of its investment company taxable and tax-exempt 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 are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid annually. Net capital losses are carried forward to future years and may be used to the extent allowed by the Code to offset any future capital gains. Utilization of capital loss carryforwards will reduce the requirement of future capital gain distributions.

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

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

Net realized and unrealized gain (loss) on foreign currency transactions will represent: (i) foreign exchange gains and losses from the sale and holdings of foreign currencies; (ii) gains and losses from the sale of investments (applicable to fixed income securities); (iii) currency gains and losses between trade date and settlement date on investment securities transactions and forward exchange contracts; and (iv) gains and losses from the difference between amounts of interest, dividends and foreign withholding taxes recorded and the amounts actually received. The effect of changes in foreign currency exchange rates on securities and derivative instruments are segregated in the Statements of Operations from the effects of changes in market prices of those securities and derivative instruments, but are included with the net realized and unrealized gain (loss) on securities and derivative instruments. Net unrealized foreign exchange gains and losses arising from changes in the value of other assets and liabilities as a result of changes in foreign exchange rates are included as increases and decreases in unrealized gain (loss) on foreign currency related transactions.

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

The contractual amounts of forward foreign currency exchange contracts do not necessarily represent the amounts potentially subject to risk. The measurement of the risks associated with these instruments is meaningful only when all related and offsetting transactions are considered. At October 31, 2006, Core Fixed Income and Investment Grade Credit had segregated sufficient cash and/or securities to cover any commitments under these contracts.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements (continued)

October 31, 2006

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

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

H. 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, or in the absence of a sale, the last bid 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 segregate 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, dependent 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. These risks may decrease the effectiveness of the Funds’ strategies and potentially result in a loss.

I. Mortgage Dollar Rolls — The Funds may enter into mortgage “dollar rolls” in which the Funds sell securities in the current month for delivery and simultaneously contract with the same counterparty to repurchase similar (same type, coupon and maturity) but not identical securities on a specified future date. For financial reporting and tax reporting purposes, the Funds treat mortgage dollar rolls as two separate transactions; one involving the purchase of a security and a separate transaction involving a sale.

During the settlement period between sale and repurchase, the Funds will not be entitled to accrued interest and/or receive principal payments on the securities sold. Dollar roll transactions involve the risk that the market value of the securities sold by the Funds may decline below the repurchase price of those securities. In the event the buyer of the securities under a dollar roll transaction files for bankruptcy or becomes insolvent, the Funds’ use of proceeds of the transaction may be restricted pending a determination by, or with respect to, the other party.

J. Repurchase Agreements — Repurchase agreements involve the purchase of securities subject to the seller’s agreement to repurchase the securities 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 (“SEC”) and terms and conditions contained therein, the Funds, together with other registered investment companies having management or investment advisory agreements with Goldman Sachs Asset Management, L.P. (“GSAM”), or its affiliates, may transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

K. Securities purchased on a when-issued or delayed-delivery basis — The Funds may purchase securities on a when-issued or delayed-delivery basis. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after trade date; interest income is not accrued until settlement date. At the time a Fund enters into such transactions, it is required to have segregated assets with a current value at least equal to the amount of its when-issued or delayed-delivery purchase commitments. Credit risks exist on these commitments to the extent of any unrealized gains on the underlying securities purchased and any unrealized losses on the underlying securities sold. Market risk exists on these

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

commitments to the same extent as if the securities were owned on a settled basis and gains and losses are recorded and reported in the same manner. In addition to the normal credit and market risks, transactions with delayed settlement dates may expose the Funds to greater risk that such transactions may not be consummated.

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

M. Swap Contracts — The Funds may enter into swap transactions for hedging purposes or to seek to increase total return. Risks may arise as a result of the failure of the counterparty to the swap contract to comply with the terms of the swap contract. The loss incurred by the failure of a counterparty is generally limited to the net payment to be received by the Funds, and/or the termination value at the end of the contract. Therefore, the Funds consider the creditworthiness of each counterparty to a contract in evaluating potential credit risk. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying reference asset or index. Entering into these agreements involves, to varying degrees, market, liquidity, elements of credit, legal and documentation risk in excess of amounts recognized in the Statement of Assets and Liabilities. The Funds may invest in the following types of swaps;

An interest rate swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specific prices, rates or indices for a specified amount of an underlying notional amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other.

A total return swap is an agreement that gives the Fund the right to receive the appreciation in the value of a specified security, index or other instrument in return for a fee paid to the counterparty, which will typically be an agreed upon interest rate. If the underlying asset declines in value over the term of the swap, the Fund may also be required to pay the dollar value of that decline to the counterparty.

Credit default swap agreements involve one party making a stream of payments to another party in exchange for the right to receive a specified return in the event of a default by a third party, typically a corporate issuer on its obligation. A Fund may use credit default swaps to provide a measure of protection against defaults of a corporate issuer or to take an active long or short position with respect to the likelihood of a particular issuer’s default. As a seller of protection, a Fund generally receives an upfront payment or a fixed rate of income throughout the term of the swap provided that there is no credit event. Credit default swaps may involve greater risks than if a Fund had invested in the referenced obligation directly. If the Fund enters into a buy contract and no credit event occurs, its exposure is limited to the periodic payments previously made to the counterparty. In addition, if the Fund enters into a sale contract and a credit event occurs, the value of the referenced obligation received by the Fund reduced by the period payments previously received may be less than the maximum payment it pays to the counterparty, resulting in a loss to the Fund.

Swaps are marked to market daily using either pricing vendor quotations, counterparty prices or models prices and the change in value, if any, is recorded as unrealized gain or loss in the Statement of Operations. An upfront payment made and/or received by the Funds, is recorded as an asset and/or liability on the Statement of Assets and Liabilities and is only recorded as a realized gain or loss when either the contract’s term ends or, with respect to a Credit Default Swap, a credit event occurs. Periodic payments received or made on swap contracts are recorded as realized gain or loss in the Statement of Operations. Gains or losses are also realized upon early termination of the swap agreements.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements (continued)

October 31, 2006

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

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

3. AGREEMENTS

GSAM, an affiliate of Goldman Sachs, serves as investment adviser pursuant to an Investment Management Agreement (the “Agreement”) with the Trust on behalf of the 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.

For the period from February 28, 2006 through October 31, 2006, GSAM received a Management fee on a contractual basis at the following rates:


	Government						Core Fixed			Investment
Average Daily Net Assets	Income			U.S. Mortgages¹			Income			Grade Credit¹

Up to $1 billion		0.54	%		0.40	%		0.40	%		0.40	%

Next $1 billion		0.49			0.36			0.36			0.36

Over $2 billion		0.47			0.34			0.34			0.34


¹	GSAM has voluntarily agreed not to impose a portion of the Management fee on U.S. Mortgages and Investment Grade Credit Funds equal to 0.07% and 0.07%, respectively, of such Funds’ average daily net assets. As a result of fee waiver, the current Management fees of the U.S. Mortgages and Investment Credit Funds is 0.33% and 0.33%, respectively, of such Funds’ average daily net assets.

Prior to February 28, 2006, the contractual Management fee for Government Income, U.S. Mortgages, Core Fixed Income and Investment Grade Credit as an annual percentage rate of average daily net assets was 0.54%, 0.40%, 0.40% and 0.40%, respectively. For the period prior to February 28, 2006, GSAM entered into a voluntary fee reduction commitment for the Funds, in order to achieve the rates in the above table.

GSAM has also voluntarily agreed to limit certain “Other Expenses” (excluding Management fees, Distribution and Service fees, Transfer Agency fees and expenses, Service Share fees, Account Service 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. For the year ended October 31, 2006, the Other Expense limitations for Government Income, U.S. Mortgages, Core Fixed Income, and Investment Grade Credit as an annual percentage rate of average daily net assets were 0.004%, 0.004%, 0.104% and 0.004%, respectively.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

3. AGREEMENTS (continued)

The Trust, on behalf of each Fund, has adopted Distribution and Service 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% of the average daily net assets of U.S. Mortgages and Investment Grade Credit attributable to Class A shares and 0.025%, 0.75% and 0.75% the average daily net assets of the Government Income and Core Fixed Income 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 the average daily net assets of Government Income and Core Fixed Income attributable to Class B or Class C Shares.

Goldman Sachs serves as Distributor of the 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 October 31, 2006, 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

Government Income	$	35,800	$	200	$	8,900

U.S. Mortgages		100		—		—

Core Fixed Income		137,800		—		100

Investment Grade Credit		900		—		—

Goldman Sachs also serves as 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: 0.16% 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 Separate Account Institutional (U.S. Mortgages and Investment Grade Credit only), Institutional and Service shares (Government Income and Core Fixed Income only). For the year ended October 31, 2006, Goldman Sachs has voluntarily agreed to waive a portion of the Transfer Agent fees equal to 0.02% of the average daily net assets attributable to Institutional and Separate Account Institutional Shares of U.S. Mortgages and Investment Grade Credit. Goldman Sachs may discontinue or modify this waiver in the future at its discretion.

The Trust, on behalf of Government Income and Core Fixed Income, has adopted a Service Plan and a 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 each share class. The Trust, on behalf of Class A and Institutional Class Shares of U.S. Mortgages and Investment Grade Credit Funds, has adopted Account Service Plans. Under these plans, Goldman Sachs and authorized dealers are entitled to receive a fee for account service and account maintenance equal to, on an annual basis, 0.05% of the average daily net assets of U.S. Mortgages and Investment Grade Credit Funds attributable to Class A and Institutional Class Shares.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements (continued)

October 31, 2006

3. AGREEMENTS (continued)

For the year ended October 31, 2006, GSAM and the Distributor have voluntarily agreed to waive certain fees and reimburse other expenses. In addition, the Funds have entered into certain offset arrangements with the custodian and transfer agent resulting in a reduction of the Funds’ expenses. For the year ended October 31, 2006, expense reductions were as follows (in thousands):


	Fee Waivers						Fee Credits

	Management		Transfer		Other Expense				Transfer		Total Expense
Fund	Fees		Agent Fees		Reimbursement		Custody Fee		Agent Fee		Reductions

Government Income	$	—	$	—	$	746	$	21	$	46	$	813

U.S. Mortgages		336		94		546		34		1		1,011

Core Fixed Income		117		—		—		48		47		212

Investment Grade Credit		149		42		333		3		—		527

At October 31, 2006, the amounts owed to affiliates of the Trust were as follows (in thousands):


	Management		Distribution and		Transfer
Fund	Fees		Service Fees		Agent Fees		Total

Government Income	$	291	$	122	$	69	$	482

U.S. Mortgages		118		1		8		127

Core Fixed Income		754		193		160		1,107

Investment Grade Credit		58		1		3		62

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

4. PORTFOLIO SECURITIES TRANSACTIONS

The cost of purchases and proceeds from sales and maturities of long-term securities for the year ended October 31, 2006 were as follows:


					Sales and		Sales and Maturities
	Purchases of		Purchases		Maturities of		(Excluding
	U.S. Government		(Excluding		U.S. Government		U.S. Government
	and Agency		U.S. Government and		and Agency		and Agency
Fund	Obligations		Agency Obligations)		Obligations		Obligations)

Government Income	$	5,856,214,906	$	153,036,227	$	6,013,828,136	$	132,440,229

U.S. Mortgages		9,331,554,238		155,752,252		9,366,360,741		67,312,909

Core Fixed Income		11,371,326,934		969,701,773		11,522,181,489		276,889,510

Investment Grade Credit		20,297,224		152,242,825		22,747,980		140,591,630

For the year ended October 31, 2006, Government Income, U.S. Mortgages, Core Fixed Income and Investment Grade Credit paid commissions of approximately $69,500, $35,000, $154,300 and $17,700, respectively, in connection with futures contracts entered into with Goldman Sachs.

5. LINE OF CREDIT FACILITY

The Funds participate in a $400,000,000 committed, unsecured revolving line of credit facility together with other registered investment companies having management or investment advisory agreements 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 that has not been utilized. For the year ended October 31, 2006, the Funds did not have any borrowings under this facility.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements (continued)

October 31, 2006

6. TAX INFORMATION

The tax character of distributions paid during the fiscal year ended October 31, 2006 was as follows:


		Government		U.S.		Core Fixed		Investment Grade
		Income		Mortgages		Income		Credit

Distributions paid from:
Ordinary Income		$	31,528,737	$	21,649,929	$	96,989,608	$	10,629,911
Net long-term capital gains			—		—		4,446,322		—

	Total taxable distributions	$	31,528,737	$	21,649,929	$	101,435,930	$	10,629,911
	Tax return of capital		—		—	$	2,171,473		—

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


		Government		U.S.		Core Fixed		Investment Grade
		Income		Mortgages		Income		Credit

Distributions paid from:
Ordinary Income		$	19,974,907	$	15,374,235	$	70,913,539	$	6,245,239
Net long-term capital gains			6,090,192		1,420,783		12,482,837		142,803

	Total taxable distributions	$	26,065,099	$	16,795,018	$	83,396,376	$	6,388,042

As of October 31, 2006, the components of accumulated earnings (losses) on a tax basis were as follows.


		Government			U.S.			Core Fixed			Investment Grade
		Income			Mortgages			Income			Credit

Undistributed ordinary income — net		$	1,392,480		$	1,241,148			—		$	373,244
Capital loss carryforward:⁽¹⁾
	Expiring 2013		—			(936,118	)		—			(419,693	)
	Expiring 2014		(11,925,097	)		(978,868	)	$	(22,304,650	)		(3,690,267	)

Total capital loss carryforward		$	(11,925,097	)	$	(1,914,986	)	$	(22,304,650	)	$	(4,109,960	)

Timing differences (dividends payable, straddles)			(326,685	)		(311,786	)		(2,837,105	)		(251,423	)
Unrealized gains (losses) — net			(1,498,966	)		(1,634,736	)		5,751,502			(1,282,610	)

Total accumulated losses — net			(12,358,268	)		(2,620,360	)		(19,390,253	)		(5,270,749	)


(1)	Expiration occurs on October 31 of the year indicated.

As of October 31, 2006, the Funds’ aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes was as follows:


	Government			U.S.			Core Fixed			Investment
	Income			Mortgages			Income			Grade Credit

Tax Cost	$	648,829,287		$	497,319,082		$	2,452,843,664		$	207,192,082

Gross unrealized gain		3,674,616			1,832,727			16,427,625			1,704,286
Gross unrealized loss		(5,459,748	)		(3,077,439	)		(10,995,454	)		(2,384,622	)

Net unrealized security gain (loss)	$	(1,785,132	)	$	(1,244,712	)	$	5,432,171		$	(680,336	)

Net unrealized gain (loss) on other investments	$	286,166		$	(390,024	)	$	319,331		$	(602,274	)

Net unrealized gain (loss)		(1,498,966	)		(1,634,736	)		5,751,502			(1,282,610	)

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

6. TAX INFORMATION (continued)

The differences between book-basis and tax-basis unrealized gains (losses) is attributable to wash sales, differences related to the tax treatment of non-periodic swap payments, amortization of swaps, market discount accretion and premium amortization and mark-to-market gains (losses) on 1256 futures contracts.

In order to present certain components of the Fund’s 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 the tax treatment of foreign currency, swap transactions, and tax treatment of certain bonds.


						Accumulated
			Accumulated			Undistributed
			Net Realized			Net Investment
Fund	Paid-in-Capital		Gain (Loss)			Income

Government Income	$	1,062,705	$	1,928,816		$	(2,991,521	)

U.S. Mortgages		—		(480,292	)		480,292

Core Fixed Income		1,103,311		9,011,835			(10,115,146	)

Investment Grade Credit		—		432,658			(432,658	)

7. OTHER MATTERS

As of October 31, 2006 the Goldman Sachs Growth and Income Strategy Portfolio was the beneficial owner of approximately 3% of the outstanding shares of the Core Fixed Income.

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. These Funds, along with certain other investment portfolios of the Trust, were named as nominal defendants in the amended complaint. Plaintiffs filed a second amended consolidated complaint on April 15, 2005. The second amended consolidated complaint alleges violations of the Act and the Investment Advisers Act of 1940. The complaint also asserts claims involving common law breach of fiduciary duty and unjust enrichment. The complaint alleges, among other things, that between April 2, 1999 and January 9, 2004 (the “Class Period”), GSAM and other defendants made improper and excessive brokerage commission and other payments to brokers that sold shares of the Goldman Sachs Funds and omitted statements of fact in registration statements and reports filed pursuant to the Act which were necessary to prevent such registration statements and reports from being materially false and misleading. The complaint further alleges that the Goldman Sachs Funds paid excessive and improper advisory fees to Goldman Sachs. The complaint also alleges that GSAM and GSAMI used 12b-1 fees for improper purposes and made improper use of soft dollars. The complaint further alleges that the Trust’s Officers and Trustees breached their fiduciary duties in connection with the foregoing. On January 13, 2006, all claims against the defendants were dismissed by the U.S. District Court. On February 22, 2006, the plaintiffs appealed this decision. By agreement, the plaintiffs subsequently withdrew their appeal without prejudice but reserved their right to reactivate their appeal pending a decision by the circuit court of appeals in similar litigation.

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements (continued)

October 31, 2006

7. OTHER MATTERS (continued)

Mergers and Reorganizations — At a meeting held on November 4, 2004, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization (the “Expedition Agreement”) providing for the tax-free acquisition of the Expedition Investment Grade Bond Fund by Core Fixed Income. The acquisition was completed on February 25, 2005.

Pursuant to the Expedition Agreement, the assets and liabilities of the Expedition Investment Grade Bond Fund (“Acquired Fund”) Class A, Class B and Institutional Class were transferred into the Goldman Sachs Core Fixed Income (“Survivor Fund”) Class A, Class B and Institutional Class, respectively, in a tax-free exchange as follows:


	Exchanged Shares				Acquired Fund’s
	of Survivor		Value of		Shares Outstanding
Survivor Share Class/Acquired Fund Share Class	Issued		Exchanged Shares		as of February 25, 2005

Core Fixed Income Class A/Expedition Investment Grade Bond Fund Class A		443,072	$	4,452,854		430,741

Core Fixed Income Class B/Expedition Investment Grade Bond Fund Class B		168,369		1,698,846		163,996

Core Fixed Income Institutional Class/Expedition Investment Grade Bond Fund Institutional Class		6,680,820		67,342,702		6,509,242

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

Survivor Fund’s

Acquired Fund’s

Aggregate

Acquired

Net Assets

Fund’s

Immediately

Before

Unrealized

After

Survivor/Acquired Fund

Acquisition

Appreciation

Acquisition

Core Fixed Income/Expedition Investment Grade Bond Fund

1,459,857,120

73,494,402

4,701,480

1,533,351,522

At a meeting held on December 14, 2005, the Board of Trustees of the Trust approved an Agreement and Plan of Reorganization (the “First Funds Agreement”) providing for the tax-free acquisition of the First Funds Intermediate Bond Portfolio by Core Fixed Income. On April 7, 2006, the Board of Trustees approved certain amendments to the First Funds Agreement. The acquisition was completed on June 5, 2006, as of the close of business June 2, 2006.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

7. OTHER MATTERS (continued)

Pursuant to the First Funds Agreement, the assets and liabilities of the First Funds Intermediate Bond Portfolio (“Acquired Fund”) Institutional Class, Class A, Class B and Class C were transferred into the Core Fixed Income (“Survivor Fund”) Institutional Class and Class A, respectively, in a tax free exchange as follows:


					Acquired Fund’s
					Shares
	Exchanged Shares of		Value of Exchanged		Outstanding as of
Survivor Share Class/Acquired Fund Share Class	Survivor Issued		Shares		June 2, 2006

Core Fixed Income Institutional Class/First Funds Intermediate Bond Portfolio Institutional Class		23,256,054	$	225,816,117		22,869,788

Core Fixed Income Class A/First Fund Intermediate Bond Portfolio Class A		249,590		2,413,528		244,781

Core Fixed Income Class A/First Funds Intermediate Bond Portfolio Class B		32,136		310,758		31,472

Core Fixed Income Class A/First Funds Intermediate Bond Portfolio Class C		179,544		1,736,185		175,687

Survivor Fund’s

Acquired Fund’s

Survivor Fund’s

Aggregate Net

Acquired Fund’s

Aggregate Net

Assets Before

Unrealized

Assets Immediately

Survivor/Acquired Fund

Acquisition

Depreciation

After Acquisition

Core Fixed Income/First Funds Intermediate Bond Portfolio

2,168,716,107

230,276,588

5,005,096

2,398,992,695

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

On September 15, 2006, FASB released Statement Financial Accounting Standard No. 157 “Fair Value Measurement” (“FAS 157”) which provides enhanced guidance for using fair value to measure assets and liabilities. The standard requires companies to provide expanded information about the assets and liabilities measured at fair value and the potential effect of these fair valuations on an entity’s financial performance. The standard does not expand the use of fair value in any new circumstances, but provides clarification on acceptable fair valuation methods and applications. FAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. The adviser does not believe the adoption of FAS 157 will impact the amounts reported in the financial statements, however, additional disclosures will be required.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements (continued)

October 31, 2006

8. SUMMARY OF SHARE TRANSACTIONS

Share activity is as follows:


	Government Income Fund

	For the Year Ended						For the Year Ended
	October 31, 2006						October 31, 2005

	Shares			Dollars			Shares			Dollars

Class A Shares
Shares sold		19,006,196		$	276,486,239			25,751,238		$	380,364,618
Shares converted from Class B^(a)		71,331			1,040,729			31,509			463,949
Reinvestment of dividends and distributions		1,574,240			22,857,034			1,408,483			20,800,018
Shares repurchased		(41,202,955	)		(593,696,503	)		(10,066,631	)		(148,602,957	)

		(20,551,188	)		(293,312,501	)		17,124,599			253,025,628

Class B Shares
Shares sold		131,172			1,901,404			138,121			2,040,240
Reinvestment of dividends and distributions		33,925			492,693			44,355			655,380
Shares converted to Class A^(a)		(71,326	)		(1,040,729	)		(31,509	)		(463,949	)
Shares repurchased		(523,718	)		(7,594,308	)		(627,907	)		(9,275,437	)

		(429,947	)		(6,240,940	)		(476,940	)		(7,043,766	)

Class C Shares
Shares sold		273,958			3,976,041			362,664			5,356,965
Reinvestment of dividends and distributions		28,527			414,100			33,061			488,032
Shares repurchased		(429,252	)		(6,230,332	)		(497,938	)		(7,351,325	)

		(126,767	)		(1,840,191	)		(102,213	)		(1,506,328	)

Institutional Shares
Shares sold		13,235,776			192,106,435			3,678,638			53,949,896
Reinvestment of dividends and distributions		285,861			4,144,669			129,590			1,911,519
Shares repurchased		(7,659,473	)		(111,004,132	)		(4,293,634	)		(63,362,003	)

		5,862,164			85,246,972			(485,406	)		(7,500,588	)

Service Shares
Shares sold		1,077,215			15,615,921			745,365			11,011,823
Reinvestment of dividends and distributions		19,752			286,389			20,599			303,697
Shares repurchased		(605,504	)		(8,787,657	)		(284,114	)		(4,188,766	)

		491,463			7,114,653			481,850			7,126,754

NET INCREASE (DECREASE)		(14,754,275	)	$	(209,032,007	)		16,541,890		$	244,101,700


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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

8. SUMMARY OF SHARE TRANSACTIONS (continued)


	U.S. Mortgages Fund

	For the Year Ended						For the Year Ended
	October 31, 2006						October 31, 2005

	Shares			Dollars			Shares			Dollars

Class A Shares
Shares sold		74,629		$	736,840			5,019,581		$	50,101,170
Reinvestment of dividends and distributions		32,146			315,209			24,573			244,529
Shares repurchased		(208,971	)		(2,050,018	)		(4,299,105	)		(42,967,447	)

		(102,196	)		(997,969	)		745,049			7,378,252

Institutional Shares
Shares sold		4,996,084			49,157,500			4,946,142			49,304,140
Reinvestment of dividends and distributions		365,157			3,584,728			295,772			2,952,261
Shares repurchased		(1,103,686	)		(10,910,941	)		(9,444,926	)		(93,957,727	)

		4,257,555			41,831,287			(4,203,012	)		(41,701,326	)

Separate Account Institutional Shares
Shares sold		24,833,736			243,126,871			48,765,071			484,921,384
Reinvestment of dividends and distributions		1,443,931			14,163,428			1,017,500			10,136,832
Shares repurchased		(34,651,048	)		(340,806,447	)		(20,254,960	)		(201,858,998	)

		(8,373,381	)		(83,516,148	)		29,527,611			293,199,218

NET INCREASE (DECREASE)		(4,218,022	)	$	(42,682,830	)		26,069,648		$	258,876,144

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Notes to Financial Statements (continued)

October 31, 2006

8. SUMMARY OF SHARE TRANSACTIONS (continued)


	Core Fixed Income Fund

	For the Year Ended						For the Year Ended
	October 31, 2006						October 31, 2005

	Shares			Dollars			Shares			Dollars

Class A Shares
Shares sold		33,915,411		$	330,454,717			35,960,982		$	361,963,182
Shares issued in connection with merger		461,270			4,460,471			443,072			4,452,854
Shares converted from Class B^(a)		94,032			918,118			46,202			464,412
Reinvestment of dividends and distributions		2,859,107			27,907,378			2,464,922			24,786,186
Shares repurchased		(31,237,706	)		(304,040,411	)		(23,268,765	)		(233,859,094	)

		6,092,114			59,700,273			15,646,413			157,807,540

Class B Shares
Shares sold		413,768			4,040,182			415,966			4,202,378
Shares issued in connection with merger		—			—			168,245			1,697,595
Reinvestment of dividends and distributions		80,189			786,518			95,011			959,791
Shares converted to Class A^(a)		(93,649	)		(918,118	)		(46,019	)		(464,412	)
Shares repurchased		(1,008,157	)		(9,859,452	)		(811,301	)		(8,186,679	)

		(607,849	)		(5,950,870	)		(178,098	)		(1,791,327	)

Class C Shares
Shares sold		861,312			8,439,976			941,827			9,522,000
Reinvestment of dividends and distributions		75,872			744,534			86,409			872,871
Shares repurchased		(1,179,491	)		(11,563,276	)		(1,028,149	)		(10,392,335	)

		(242,307	)		(2,378,766	)		87			2,536

Institutional Shares
Shares sold		70,215,331			684,433,513			55,776,185			561,484,946
Shares issued in connection with merger		23,256,054			225,816,117			6,680,820			67,342,702
Reinvestment of dividends and distributions		4,149,150			40,632,934			2,981,398			30,085,346
Shares repurchased		(50,393,455	)		(494,390,692	)		(38,187,685	)		(385,523,566	)

		47,227,080			456,491,872			27,250,718			273,389,428

Service Shares
Shares sold		2,448,389			24,070,282			2,143,270			21,597,057
Reinvestment of dividends and distributions		88,895			871,691			85,720			865,451
Shares repurchased		(1,010,620	)		(9,873,930	)		(997,254	)		(10,050,301	)

		1,526,664			15,068,043			1,231,736			12,412,207

NET INCREASE (DECREASE)		53,995,702		$	522,930,552			43,950,856		$	441,820,384


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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

8. SUMMARY OF SHARE TRANSACTIONS (continued)


	Investment Grade Credit Fund

	For the Year Ended						For the Year Ended
	October 31, 2006						October 31, 2005

	Shares			Dollars			Shares			Dollars

Class A Shares
Shares sold		122,758		$	1,221,812			320,645		$	3,263,617
Reinvestment of dividends and distributions		13,743			135,325			11,900			121,009
Shares repurchased		(157,724	)		(1,542,363	)		(178,972	)		(1,810,430	)

		(21,223	)		(185,226	)		153,573			1,574,196

Institutional Shares
Shares sold		22,238			219,000			470,899			4,733,479
Reinvestment of dividends and distributions		16,932			166,973			9,313			94,718
Shares repurchased		(72,211	)		(705,458	)		(121,782	)		(1,237,372	)

		(33,041	)		(319,485	)		358,430			3,590,825

Separate Account Institutional Shares
Shares sold		6,781,618			67,075,585			16,984,506			173,425,722
Reinvestment of dividends and distributions		803,525			7,916,831			528,785			5,376,549
Shares repurchased		(6,233,643	)		(61,175,704	)		(4,986,999	)		(50,618,751	)

		1,351,500			13,816,712			12,526,292			128,183,520

NET INCREASE		1,297,236		$	13,312,001			13,038,295		$	133,348,541

GOLDMAN SACHS GOVERNMENT INCOME 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
	beginning		investment			and unrealized			investment		investment			realized			Total
Year - Share Class	of year		income^(a)			gain (loss)			operations		income			gains			distributions

FOR THE YEARS ENDED OCTOBER 31,

2006 - A	$	14.57	$	0.55		$	0.08		$	0.63	$	(0.56	)	$	—	^(e)	$	(0.56	)
2006 - B		14.57		0.44			0.08			0.52		(0.45	)		—	^(e)		(0.45	)
2006 - C		14.56		0.44			0.08			0.52		(0.45	)		—	^(e)		(0.45	)
2006 - Institutional		14.55		0.60			0.09			0.69		(0.61	)		—	^(e)		(0.61	)
2006 - Service		14.54		0.53			0.08			0.61		(0.54	)		—	^(e)		(0.54	)

2005 - A		15.00		0.43			(0.30	)		0.13		(0.39	)		(0.17	)		(0.56	)
2005 - B		15.00		0.30			(0.28	)		0.02		(0.28	)		(0.17	)		(0.45	)
2005 - C		14.99		0.31			(0.29	)		0.02		(0.28	)		(0.17	)		(0.45	)
2005 - Institutional		14.98		0.46			(0.27	)		0.19		(0.45	)		(0.17	)		(0.62	)
2005 - Service		14.98		0.41			(0.31	)		0.10		(0.37	)		(0.17	)		(0.54	)

2004 - A		14.88		0.39			0.33			0.72		(0.47	)		(0.13	)		(0.60	)
2004 - B		14.88		0.28			0.32			0.60		(0.35	)		(0.13	)		(0.48	)
2004 - C		14.87		0.28			0.32			0.60		(0.35	)		(0.13	)		(0.48	)
2004 - Institutional		14.85		0.46			0.33			0.79		(0.53	)		(0.13	)		(0.66	)
2004 - Service		14.85		0.37			0.34			0.71		(0.45	)		(0.13	)		(0.58	)

2003 - A		14.95		0.41			0.05			0.46		(0.51	)		(0.02	)		(0.53	)
2003 - B		14.95		0.31			0.04			0.35		(0.40	)		(0.02	)		(0.42	)
2003 - C		14.94		0.31			0.04			0.35		(0.40	)		(0.02	)		(0.42	)
2003 - Institutional		14.93		0.47			0.04			0.51		(0.57	)		(0.02	)		(0.59	)
2003 - Service		14.92		0.41			0.04			0.45		(0.50	)		(0.02	)		(0.52	)

2002 - A		14.96		0.63	^(d)		0.19	^(d)		0.82		(0.67	)		(0.16	)		(0.83	)
2002 - B		14.96		0.52	^(d)		0.19	^(d)		0.71		(0.56	)		(0.16	)		(0.72	)
2002 - C		14.95		0.51	^(d)		0.20	^(d)		0.71		(0.56	)		(0.16	)		(0.72	)
2002 - Institutional		14.94		0.69	^(d)		0.19	^(d)		0.88		(0.73	)		(0.16	)		(0.89	)
2002 - Service		14.93		0.62	^(d)		0.19	^(d)		0.81		(0.66	)		(0.16	)		(0.82	)


(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)	The portfolio turnover rate excluding the effect of mortgage dollar rolls is 690% for the year ended October 31, 2006. Prior years include the effect of mortgage dollar roll transactions.
(d)	As required, effective November 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing all premiums and discounts on debt securities. The effect of this change for the year ended October 31, 2002 was to decrease net investment income per share by $0.06, increase net realized and unrealized gains and losses per share by $0.06, and decrease the ratio of net investment income to average net assets with and without expense reductions by 0.44%.
(e)	Amount is less than $0.005 per share.

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

GOLDMAN SACHS GOVERNMENT INCOME FUND


													Ratios assuming no
													expense reductions

										Ratio of			Ratio of			Ratio of
					Net assets		Ratio of			net investment			total			net investment
Net asset					at end of		net expenses			income to			expenses			income to			Portfolio
value, end		Total			year		to average			average net			to average			average net			turnover
of year		return^(b)			(in 000s)		net assets			assets			net assets			assets			rate^(c)



$	14.64		4.40	%	$	432,762		0.95	%		3.77	%		1.04	%		3.68	%		766	%
	14.64		3.62			18,713		1.70			3.03			1.79			2.94			766
	14.63		3.63			16,931		1.70			3.04			1.79			2.95			766
	14.63		4.86			146,784		0.58			4.18			0.67			4.09			766
	14.61		4.27			23,461		1.08			3.67			1.17			3.58			766

	14.57		0.80			729,958		0.97			2.83			1.07			2.73			256
	14.57		0.04			24,882		1.72			2.08			1.83			1.97			256
	14.56		0.11			18,692		1.72			2.08			1.83			1.97			256
	14.55		1.26			60,747		0.58			3.20			0.69			3.08			256
	14.54		0.69			16,198		1.08			2.74			1.18			2.64			256

	15.00		4.99			494,883		0.98			2.60			1.17			2.41			609
	15.00		4.21			32,782		1.73			1.93			1.92			1.74			609
	14.99		4.14			20,778		1.73			1.91			1.92			1.72			609
	14.98		5.35			69,770		0.58			3.12			0.77			2.93			609
	14.98		4.90			9,467		1.08			2.55			1.27			2.36			609

	14.88		3.11			358,058		0.99			2.78			1.18			2.59			520
	14.88		2.34			44,120		1.74			2.06			1.93			1.87			520
	14.87		2.34			23,720		1.74			2.05			1.93			1.86			520
	14.85		3.60			151,111		0.59			3.16			0.78			2.97			520
	14.85		3.01			10,491		1.09			2.72			1.28			2.53			520

	14.95		5.77			248,719		0.98			4.26	^(d)		1.24			4.00	^(d)		226
	14.95		4.99			51,124		1.73			3.54	^(d)		1.99			3.28	^(d)		226
	14.94		4.99			24,095		1.73			3.49	^(d)		1.99			3.23	^(d)		226
	14.93		6.13			82,523		0.58			4.74	^(d)		0.84			4.48	^(d)		226
	14.92		5.68			10,762		1.08			4.25	^(d)		1.34			3.99	^(d)		226

GOLDMAN SACHS U.S. MORTGAGES FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Year


			Income from							Distributions
			investment operations							to shareholders

	Net asset
	value,		Net		Net realized			Total from		From net			From net
	beginning		investment		and unrealized			investment		investment			realized			Total
Year - Share Class	of period		income^(a)		gain (loss)			operations		income			gains			distributions

FOR THE YEAR ENDED OCTOBER 31,

2006 - A	$	9.82	$	0.41	$	0.08		$	0.49	$	(0.41	)	$	—		$	(0.41	)
2006 - Institutional		9.82		0.45		0.08			0.53		(0.44	)		—			(0.44	)
2006 - Separate Account Institutional		9.82		0.45		0.09			0.54		(0.45	)		—			(0.45	)

2005 - A		10.22		0.28		(0.17	)		0.11		(0.33	)		(0.18	)		(0.51	)
2005 - Institutional		10.22		0.33		(0.18	)		0.15		(0.37	)		(0.18	)		(0.55	)
2005 - Separate Account Institutional		10.21		0.36		(0.20	)		0.16		(0.37	)		(0.18	)		(0.55	)
FOR THE PERIOD ENDED OCTOBER 31,

2004 - A (commenced November 3, 2003)		10.00		0.22		0.33			0.55		(0.33	)		—			(0.33	)
2004 - Institutional (commenced November 3, 2003)		10.00		0.29		0.31			0.60		(0.38	)		—			(0.38	)
2004 - Separate Account Institutional (commenced November 3, 2003)		10.00		0.31		0.28			0.59		(0.38	)		—			(0.38	)


(a)	Calculated based on the average shares outstanding methodology.
(b)	Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the period and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Total returns for the periods less than one full year are not annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares.
(c)	The portfolio turnover rate excluding the effect of mortgage dollar rolls is 1442% for the year ended October 31, 2006. Prior years include the effect of mortgage dollar roll transactions.
(d)	Annualized.

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

GOLDMAN SACHS U.S. MORTGAGES FUND


													Ratios assuming no
													expense reductions

										Ratio of			Ratio of			Ratio of
					Net assets		Ratio of			net investment			total			net investment
Net asset					at end of		net expenses			income to			expenses			income to			Portfolio
value, end		Total			period		to average			average net			to average			average net			turnover
of period		return^(b)			(in 000s)		net assets			assets			net assets			assets			rate^(c)



$	9.90		5.21	%	$	6,973		0.79	%		4.24	%		0.98	%		4.05	%		1665	%
	9.91		5.56			117,497		0.40			4.64			0.61			4.43			1665
	9.91		5.73			307,935		0.35			4.62			0.56			4.41			1665

	9.82		1.00			7,916		0.81			2.88			0.98			2.71			2006
	9.82		1.49			74,616		0.40			3.43			0.58			3.24			2006
	9.82		1.54			387,306		0.35			3.42			0.53			3.24			2006


	10.22		5.60			628		0.82	^(d)		1.95	^(d)		1.08	^(d)		1.69	^(d)		1953
	10.22		6.07			120,628		0.40	^(d)		2.86	^(d)		0.68	^(d)		2.58	^(d)		1953
	10.21		6.03			101,429		0.35	^(d)		2.98	^(d)		0.63	^(d)		2.70	^(d)		1953

GOLDMAN SACHS CORE FIXED INCOME 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
	beginning		investment		and unrealized			investment		investment			realized			From			Total
Year - Share Class	of year		income^(a)		gain (loss)			operations		income			gains			capital			distributions

FOR THE YEARS ENDED OCTOBER 31,

2006 - A	$	9.87	$	0.41	$	(0.01	)	$	0.40	$	(0.38	)	$	(0.06	)	$	(0.01	)	$	(0.45	)
2006 - B		9.91		0.34		(0.01	)		0.33		(0.31	)		(0.06	)		(0.01	)		(0.38	)
2006 - C		9.91		0.34		—			0.34		(0.31	)		(0.06	)		(0.01	)		(0.38	)
2006 - Institutional		9.90		0.45		—			0.45		(0.42	)		(0.06	)		(0.01	)		(0.49	)
2006 - Service		9.91		0.40		(0.01	)		0.39		(0.37	)		(0.06	)		(0.01	)		(0.44	)

2005 - A		10.25		0.32		(0.20	)		0.12		(0.37	)		(0.13	)		—			(0.50	)
2005 - B		10.29		0.24		(0.20	)		0.04		(0.29	)		(0.13	)		—			(0.42	)
2005 - C		10.29		0.24		(0.20	)		0.04		(0.29	)		(0.13	)		—			(0.42	)
2005 - Institutional		10.28		0.36		(0.21	)		0.15		(0.40	)		(0.13	)		—			(0.53	)
2005 - Service		10.29		0.31		(0.21	)		0.10		(0.35	)		(0.13	)		—			(0.48	)

2004 - A		10.31		0.30		0.32			0.62		(0.33	)		(0.35	)		—			(0.68	)
2004 - B		10.35		0.23		0.31			0.54		(0.25	)		(0.35	)		—			(0.60	)
2004 - C		10.35		0.23		0.31			0.54		(0.25	)		(0.35	)		—			(0.60	)
2004 - Institutional		10.35		0.34		0.31			0.65		(0.37	)		(0.35	)		—			(0.72	)
2004 - Service		10.35		0.29		0.32			0.61		(0.32	)		(0.35	)		—			(0.67	)

2003 - A		10.07		0.40		0.28			0.68		(0.40	)		(0.04	)		—			(0.44	)
2003 - B		10.10		0.33		0.28			0.61		(0.32	)		(0.04	)		—			(0.36	)
2003 - C		10.10		0.33		0.28			0.61		(0.32	)		(0.04	)		—			(0.36	)
2003 - Institutional		10.09		0.45		0.29			0.74		(0.44	)		(0.04	)		—			(0.48	)
2003 - Service		10.09		0.40		0.29			0.69		(0.39	)		(0.04	)		—			(0.43	)

2002 - A		10.25		0.50		(0.13	)		0.37		(0.52	)		(0.03	)		—			(0.55	)
2002 - B		10.29		0.43		(0.15	)		0.28		(0.44	)		(0.03	)		—			(0.47	)
2002 - C		10.29		0.43		(0.15	)		0.28		(0.44	)		(0.03	)		—			(0.47	)
2002 - Institutional		10.28		0.55		(0.15	)		0.40		(0.56	)		(0.03	)		—			(0.59	)
2002 - Service		10.28		0.51		(0.16	)		0.35		(0.51	)		(0.03	)		—			(0.54	)


(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)	The portfolio turnover rate excluding the effect of mortgage dollar rolls is 516% for the year ended October 31, 2006. Prior years include the effect of mortgage dollar roll transactions.

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

GOLDMAN SACHS CORE FIXED INCOME FUND


													Ratios assuming no
													expense reductions

										Ratio of						Ratio of
					Net assets		Ratio of			net investment			Ratio of			net investment
Net asset					at end of		net expenses			income to			total expenses			income to			Portfolio
value, end		Total			year		to average			average net			to average			average net			turnover
of year		return^(b)			(in 000s)		net assets			assets			net assets			assets			rate^(c)



$	9.82		4.21	%	$	714,877		0.83	%		4.25	%		0.84	%		4.24	%		562	%
	9.86		3.42			22,971		1.58			3.49			1.59			3.48			562
	9.87		3.52			20,937		1.58			3.49			1.59			3.48			562
	9.86		4.69			1,558,971		0.46			4.65			0.47			4.64			562
	9.86		4.06			46,600		0.96			4.13			0.97			4.12			562

	9.87		1.14			658,114		0.86			3.14			0.87			3.13			283
	9.91		0.38			29,096		1.61			2.40			1.62			2.39			283
	9.91		0.38			23,432		1.61			2.40			1.62			2.39			283
	9.90		1.53			1,098,280		0.47			3.54			0.48			3.53			283
	9.91		1.02			31,682		0.97			3.03			0.98			3.02			283

	10.25		6.24			523,045		0.90			2.96			0.90			2.96			549
	10.29		5.43			32,040		1.65			2.21			1.65			2.21			549
	10.29		5.42			24,323		1.65			2.21			1.65			2.21			549
	10.28		6.55			860,021		0.50			3.36			0.50			3.36			549
	10.29		6.22			20,221		1.00			2.86			1.00			2.86			549

	10.31		7.03			445,178		0.89			3.91			0.89			3.91			489
	10.35		6.31			37,120		1.64			3.21			1.64			3.21			489
	10.35		6.21			25,409		1.64			3.16			1.64			3.16			489
	10.35		7.54			695,181		0.49			4.39			0.49			4.39			489
	10.35		6.90			21,827		0.99			3.89			0.99			3.89			489

	10.07		3.59			315,441		0.90			5.03			0.90			5.03			437
	10.10		2.70			36,131		1.65			4.33			1.65			4.33			437
	10.10		2.80			20,176		1.65			4.32			1.65			4.32			437
	10.09		3.99			733,996		0.50			5.51			0.50			5.51			437
	10.09		3.47			29,761		1.00			5.05			1.00			5.05			437

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Year


			Income from							Distributions
			investment operations							to shareholders

	Net asset
	value,		Net		Net realized			Total from		From net			From net
	beginning		investment		and unrealized			investment		investment			realized			Total
Year - Share Class	of year		income^(a)		gain (loss)			operations		income			gains			distributions

FOR THE YEAR ENDED OCTOBER 31,

2006 - A	$	9.93	$	0.47	$	—		$	0.47	$	(0.45	)	$	—		$	(0.45	)
2006 - Institutional		9.95		0.51		—			0.51		(0.49	)		—			(0.49	)
2006 - Separate Account Institutional		9.94		0.52		(0.01	)		0.51		(0.49	)		—			(0.49	)

2005 - A		10.31		0.40		(0.35	)		0.05		(0.39	)		(0.04	)		(0.43	)
2005 - Institutional		10.32		0.52		(0.42	)		0.10		(0.43	)		(0.04	)		(0.47	)
2005 - Separate Account Institutional		10.31		0.46		(0.35	)		0.11		(0.44	)		(0.04	)		(0.48	)
FOR THE PERIOD ENDED OCTOBER 31,

2004 - A (commenced November 3, 2003)		10.00		0.38		0.31			0.69		(0.38	)		—			(0.38	)
2004 - Institutional (commenced November 3, 2003)		10.00		0.44		0.30			0.74		(0.42	)		—			(0.42	)
2004 - Separate Account Institutional (commenced November 3, 2003)		10.00		0.43		0.31			0.74		(0.43	)		—			(0.43	)


(a)	Calculated based on the average shares outstanding methodology.
(b)	Assumes investment at the net asset value at the beginning of the period, reinvestment of all dividends and distributions, a complete redemption of the investment at the net asset value at the end of the period and no sales or redemption charges. Total return would be reduced if a sales or redemption charge were taken into account. Total returns for periods less than one full year are not annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares.
(c)	Annualized.

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

GOLDMAN SACHS INVESTMENT GRADE CREDIT FUND


													Ratios assuming no
													expense reductions

										Ratio of						Ratio of
					Net assets		Ratio of			net investment			Ratio of			net investment
Net asset					at end of		net expenses			income to			total expenses			income to			Portfolio
value, end		Total			period		to average			average net			to average			average net			turnover
of period		return^(b)			(in 000s)		net assets			assets			net assets			assets			rate



$	9.95		4.84	%	$	3,420		0.79	%		4.82	%		1.04	%		4.57	%		74	%
	9.97		5.35			3,317		0.40			5.21			0.65			4.96			74
	9.96		5.30			206,122		0.35			5.26			0.60			5.01			74

	9.93		0.50			3,622		0.81			3.88			1.07			3.62			88
	9.95		0.89			3,638		0.40			4.40			0.66			4.14			88
	9.94		1.04			192,196		0.35			4.34			0.62			4.07			88


	10.31		7.00			2,179		0.82	^(c)		3.66	^(c)		1.85	^(c)		2.63	^(c)		78
	10.32		7.57			76		0.40	^(c)		4.28	^(c)		1.45	^(c)		3.23	^(c)		78
	10.31		7.52			70,269		0.35	^(c)		4.26	^(c)		1.40	^(c)		3.21	^(c)		78

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 Government Income Fund, Goldman Sachs U.S. Mortgages Fund, Goldman Sachs Core Fixed Income Fund and Goldman Sachs Investment Grade Credit Fund (four of the funds comprising the Goldman Sachs Trust) (the “Funds”), as of October 31, 2006, 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 periods indicated therein. 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 October 31, 2006, 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 Government Income Fund, Goldman Sachs U.S. Mortgages Fund, Goldman Sachs Core Fixed Income Fund and Goldman Sachs Investment Grade Credit Fund at October 31, 2006, 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 periods indicated therein, in conformity with U.S. generally accepted accounting principles.

New York, New York

December 21, 2006

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Fund Expenses (Unaudited) — Six Month Period Ended October 31, 2006

As a shareholder of Class A, Class B, Class C, Institutional, Service or Separate Account Institutional 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 (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, Service and Separate Account Institutional Shares of the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2006 through October 31, 2006.

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

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

Please note that the expenses shown in the table are meant to highlight your ongoing costs only 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.



	Government Income Fund							U.S. Mortgages Fund							Core Fixed Income Fund							Investment Grade Credit Fund

						Expenses							Expenses							Expenses							Expenses
	Beginning		Ending			Paid for the		Beginning		Ending			Paid for the		Beginning		Ending			Paid for the		Beginning		Ending			Paid for the
	Account Value		Account Value			6 months ended		Account Value		Account Value			6 months ended		Account Value		Account Value			6 months ended		Account Value		Account Value			6 months ended
Share Class	05/01/06		10/31/06			10/31/06*		05/01/06		10/31/06			10/31/06*		05/01/06		10/31/06			10/31/06*		05/01/06		10/31/06			10/31/06*

Class A
Actual	$	1,000.00	$	1,037.20		$	4.88	$	1,000.00	$	1,038.30		$	4.06	$	1,000.00	$	1,037.10		$	4.21	$	1,000.00	$	1,049.00		$	4.10
Hypothetical 5% return		1,000.00		1,020.41	+		4.84		1,000.00		1,021.23	+		4.02		1,000.00		1,021.07	+		4.18		1,000.00		1,021.20	+		4.05

Class B
Actual		1,000.00		1,033.30			8.70		N/A		N/A			N/A		1,000.00		1,033.10			8.05		N/A		N/A			N/A
Hypothetical 5% return		1,000.00		1,016.64	+		8.63		N/A		N/A			N/A		1,000.00		1,017.28	+		7.99		N/A		N/A			N/A

Class C
Actual		1,000.00		1,032.60			8.70		N/A		N/A			N/A		1,000.00		1,034.10			8.05		N/A		N/A			N/A
Hypothetical 5% return		1,000.00		1,016.65	+		8.63		N/A		N/A			N/A		1,000.00		1,017.29	+		7.99		N/A		N/A			N/A

Institutional
Actual		1,000.00		1,039.20			2.98		1,000.00		1,040.10			2.05		1,000.00		1,040.00			2.31		1,000.00		1,051.00			2.08
Hypothetical 5% return		1,000.00		1,022.28	+		2.95		1,000.00		1,023.20	+		2.03		1,000.00		1,022.94	+		2.29		1,000.00		1,023.17	+		2.06

Separate Account Institutional
Actual		N/A		N/A			N/A		1,000.00		1,041.40			1.79		N/A		N/A			N/A		1,000.00		1,051.30			1.83
Hypothetical 5% return		N/A		N/A			N/A		1,000.00		1,023.45	+		1.77		N/A		N/A			N/A		1,000.00		1,023.42	+		1.80

Service
Actual		1,000.00		1,035.90			5.52		N/A		N/A			N/A		1,000.00		1,036.30			4.88		N/A		N/A			N/A
Hypothetical 5% return		1,000.00		1,019.78	+		5.48		N/A		N/A			N/A		1,000.00		1,020.41	+		4.84		N/A		N/A			N/A

Expenses for each share class are calculated using the Funds’ annualized expense ratio for each class, which represents the ongoing expenses as a percentage of net assets for the six months ended 10/31/06. Expenses are calculated by multiplying the annualized expense ratio by the average account value for the period; then multiplying the result by the number of days in the most recent fiscal half year; and then dividing that result by the number of days in the fiscal year. The annualized expense ratios for the period were as follows:


																Separate Account
Fund	Class A			Class B			Class C			Institutional			Service			Institutional

Government Income		0.95	%		1.70	%		1.70	%		0.58	%		1.08	%		N/A
U.S. Mortgages		0.79			N/A			N/A			0.40			N/A			0.35	%
Core Fixed Income		0.82			1.57			1.57			0.45			0.95			N/A
Investment Grade Credit		0.79			N/A			N/A			0.40			N/A			0.35


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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Statement Regarding Basis for Approval of Management Agreements (Unaudited)

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

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

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

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

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Statement Regarding Basis for Approval of Management Agreements (Unaudited) (continued)

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

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

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

The Trustees also considered the investment performance of the Funds and the Investment Adviser. In this regard, the Trustees compared the investment performance of the Funds to the performance of other SEC-registered funds and to rankings and ratings issued by the Outside Data Provider. The Trustees also reviewed the Funds’ investment performance relative to their respective performance benchmarks. For Funds that had been in existence for the respective periods, this information on the Funds’ investment performance was provided for one, three, five and ten (where applicable) year periods. In addition, the Trustees considered the investment performance trends of the Funds over time, and reviewed the investment performance of the Funds in light of their respective investment objectives, policies and credit and duration parameters, as well as in light of periodic analyses of their respective quality and risk profiles. In addition, the Trustees considered whether the Funds had operated within their investment policies, and their record of compliance with their investment limitations. The Trustees believed that the Funds were providing investment performance within a competitive range for long-term investors.

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Statement Regarding Basis for Approval of Management Agreements (Unaudited) (continued)

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

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


	Management Fee			Average Daily
Fund	Annual Rate			Net Assets

Government Income Fund		0.54	%	First $	1 Billion
		0.49		Next $	1 Billion
		0.47		Over $	2 Billion

U.S. Mortgages Fund		0.40		First $	1 Billion
		0.36		Next $	1 Billion
		0.34		Over $	2 Billion

Core Fixed Income Fund		0.40		First $	1 Billion
		0.36		Next $	1 Billion
		0.34		Over $	2 Billion

Investment Grade Credit Fund		0.40		First $	1 Billion
		0.36		Next $	1 Billion
		0.34		Over $	2 Billion

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

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME FUNDS

Statement Regarding Basis for Approval of Management Agreements (Unaudited) (continued)

The Trustees also considered the other benefits derived by the Investment Adviser and its affiliates from the Funds as stated above, including the fees received by them for transfer agency, securities lending, distribution and brokerage services. The Trustees noted the reduction of the transfer agency fees on Class A, Class B and Class C Shares of the Funds in 2005. In addition, the Trustees reviewed the Investment Adviser’s pre-tax revenues and pre-tax margins with respect to the Trust and the Funds. In this regard the Trustees reviewed, among other things, profitability analyses and summaries, revenue and expense schedules and expense allocation methodologies, as well as a report of independent accountants regarding the results of certain agreed-upon procedures to verify expense allocation calculations that were designed to assist the Trustees in their evaluation of the Investment Adviser’s schedules of revenues and expenses. The Trustees considered the Investment Adviser’s revenues and margins both in absolute terms and in comparison to the information on the reported margins earned by other asset management firms.

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

Goldman Sachs Single/Multi-Sector Taxable Fixed Income Funds — Tax Information (Unaudited)


Pursuant to Section 852 of the Internal Revenue Code, the Core Fixed Income Fund designates $4,446,322 as capital gain dividends paid during the year ended October 31, 2006.

Pursuant to Section 871(k) of the Internal Revenue Code, the Government Income and Core Fixed Income Funds designate $182,487 and $7,042,948, respectively, as short-term capital gain dividends paid during the year ended October 31, 2006.

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME 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: 64	Chairman of the Board of Trustees	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 of Trustees — Goldman Sachs Mutual Fund Complex (registered investment companies).	77	None

John P. Coblentz, Jr. Age: 65	Trustee	Since 2003	Partner, Deloitte & Touche LLP (June 1975-May 2003). Trustee — Goldman Sachs Mutual Fund Complex (registered investment companies).	77	None

Patrick T. Harker Age: 48	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 1999-2000); 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).	77	None

Mary P. McPherson Age: 71	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).	77	None

Wilma J. Smelcer Age: 57	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).	77	Lawson Products Inc. (distributor of industrial products).

GOLDMAN SACHS SINGLE/MULTI-SECTOR TAXABLE FIXED INCOME 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: 67	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) (1999-2005); 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).	77	Gildan Activewear Inc. (clothing marketing and manufacturing company); Cardean Learning Group (provider of educational services via the internet); Northern Mutual Fund Complex (58 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: 57	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).	77	None

*Kaysie P. Uniacke Age: 45	Trustee &	Since 2001	Managing Director, Goldman Sachs (1997-Present).	77	None
	President	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). Trustee — Gettysburg College


*		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: Peter V. Bonanno.
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 October 31, 2006, the Trust consisted of 65 portfolios, including the Funds described in this Annual Report, and Goldman Sachs Variable Insurance Trust consisted of 12 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.

GOLDMAN SACHS SINGLE/MULTI SECTOR TAXABLE FIXED INCOME FUNDS

Trustees and Officers (Unaudited) (continued)

Officers of the Trust*


		Term of
		Office and
	Position(s) Held	Length of
Name, Age And Address	With the Trust	Time Served¹	Principal Occupation(s) During Past 5 Years

Kaysie P. Uniacke 32 Old Slip New York, NY 10005 Age: 45	President & Trustee	Since 2002 Since 2001	Managing Director, Goldman Sachs (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). Trustee — Gettysburg College.

James A. Fitzpatrick 71 South Wacker Drive Suite 500 Chicago, IL 60606 Age: 46	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: 44	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: 42	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).

Peter V. Bonanno 32 Old Slip New York, NY 10005 Age: 37	Secretary	Since 2006	Managing Director, Goldman Sachs (December 2006-Present); Associate General Counsel, Goldman Sachs (2002-Present); Vice President Goldman Sachs (1999-2006); Assistant General Counsel, Goldman Sachs (1999-2002). Secretary — Goldman Sachs Mutual Fund Complex (registered investment companies).


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.

FUNDS PROFILE

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 $610.2 billion in assets under management as of September 30, 2006 — our investment professionals bring firsthand knowledge of local markets to every investment decision, making us one of the few truly global asset managers.

GOLDMAN SACHS FUNDS

In building a globally diversified portfolio, you can select from more than 50 Goldman Sachs Funds and gain access to investment opportunities across borders, investment styles, asset classes and security capitalizations.


Money Market Funds¹Fixed Income Funds ▪ Enhanced Income Fund ▪ Ultra-Short Duration Government Fund ▪ Short Duration Government Fund ▪ Short Duration Tax-Free Fund ▪ California Intermediate AMT-Free Municipal Fund ▪ New York Intermediate AMT-Free Municipal Fund ▪ Tennessee Municipal Fund ▪ Municipal Income Fund ▪ U.S. Mortgages Fund ▪ Government Income Fund ▪ Core Fixed Income Fund ▪ Core Plus Fixed Income Fund ▪ Investment Grade Credit Fund ▪ Global Income Fund ▪ High Yield Municipal Fund ▪ High Yield Fund ▪ Emerging Markets Debt Fund		Domestic Equity Funds ▪ Balanced Fund ▪ Growth and Income Fund ▪ Structured Large Cap Value²▪ Large Cap Value ▪ Structured U.S. Equity Fund²▪ Structured U.S. Equity Flex Fund ▪ Structured Large Cap Growth Fund²▪ Capital Growth Fund ▪ Strategic Growth Fund ▪ Concentrated Growth Fund ▪ Mid Cap Value Fund ▪ Growth Opportunities Fund ▪ Small/Mid Cap Growth Fund ▪ Structured Small Cap Equity Fund²▪ Small Cap Value Fund		International Equity Funds ▪ Structured International Equity Fund²▪ Structured International Equity Flex Fund ▪ Concentrated International Equity Fund²▪ Japanese Equity Fund ▪ International Small Cap Fund²▪ Asia Equity Fund²▪ Emerging Markets Equity Fund ▪ BRIC Fund (Brazil, Russia, India, China) Asset Allocation Funds³Specialty Funds³▪ U.S. Equity Dividend and Premium Fund ▪ Structured Tax-Managed Equity Fund²▪ Real Estate Securities Fund ▪ International Real Estate Securities Fund ▪ Tollkeeper Fund^SM


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 Cap 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. Effective December 26, 2006, the International Equity Fund was renamed the Concentrated International Equity Fund.

³	Individual Funds within the Asset Allocation and Specialty categories will have various placement on the risk/return spectrum and may have greater or lesser risk than that indicated by the placement of the general Asset Allocation or Specialty category.

The Goldman Sachs Tollkeeper Fund^SM is a registered service mark of Goldman, Sachs & Co.

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


TRUSTEES Ashok N. Bakhru, Chairman John P. Coblentz, Jr. Patrick T. Harker Mary Patterson McPherson Alan A. Shuch Wilma J. Smelcer Richard P. Strubel Kaysie P. Uniacke		OFFICERS Kaysie P. Uniacke, President James A. Fitzpatrick, Vice President James A. McNamara, Vice President John M. Perlowski, Treasurer Peter V. Bonanno, Secretary


GOLDMAN, SACHS & CO. Distributor and Transfer Agent		GOLDMAN SACHS ASSET MANAGEMENT, L.P. Investment Adviser

Visit our Web site at www.goldmansachsfunds.com to obtain the most recent month-end returns.

The reports concerning the Funds included in this shareholder report may contain certain forward-looking statements about the factors that may affect the performance of the Funds in the future. These statements are based on Fund management’s predictions and expectations concerning certain future events and their expected impact on the Funds, such as performance of the economy as a whole and of specific industry sectors, changes in the levels of interest rates, the impact of developing world events, and other factors that may influence the future performance of the Funds. Management believes these forward-looking statements to be reasonable, although they are inherently uncertain and difficult to predict. Actual events may cause adjustments in portfolio management strategies from those currently expected to be employed.

A description of the policies and procedures that the 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 January 31, 2005 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).

Foreign and emerging markets investments may be more volatile and less liquid than investment in U.S. securities and will be subject to the risks of currency fluctuations and sudden economic or political developments. At times, the Core Fixed Income and Investment Grade Credit Funds may be unable to sell certain of their portfolio securities without a substantial drop in price, if at all. The Core Fixed Income and Investment Grade Credit Funds may also engage in foreign currency transactions for hedging purposes including cross hedging or for speculative purposes. Forward foreign currency exchange contracts are subject to the risk that the counterparty to the contract will default on its obligations.

Holdings and allocations shown may not be representative of current or future investments. Holdings and allocations may not include the Funds’ entire investment portfolio, which may change at any time. Fund holdings should not be relied on in making investment decisions and should not be construed as research or investment advice regarding particular securities.

This material is not authorized for distribution to prospective investors unless preceded or accompanied by a current Prospectus. Please consider a Fund’s objectives, risks, and charges and expenses, and read the Prospectus carefully before investing. The Prospectus contains this and other information about the Funds.


Copyright 2006 Goldman, Sachs & Co. All rights reserved. 06-1991	SMSTFIAR / 43.1K / 12-06