Goldman Sachs Funds

TAXABLE INVESTMENT GRADE FUNDS

Annual Report October 31, 2003

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

Goldman Sachs Taxable Investment Grade Funds

GOLDMAN SACHS ENHANCED INCOME FUND

GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND GOLDMAN SACHS GOVERNMENT INCOME FUND

GOLDMAN SACHS CORE FIXED INCOME FUND

GOLDMAN SACHS GLOBAL INCOME FUND

NOT FDIC-INSURED May Lose Value No Bank Guarantee

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

What Distinguishes Goldman Sachs’ Fixed Income Investing 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:

1 RIGOROUS SECURITY SELECTION

Assess relative value among sectors (such as mortgages and corporates) and sub-sectors

Leverage the vast resources of Goldman Sachs in selecting securities for each portfolio

2 PRECISE PORTFOLIO CONSTRUCTION

Team approach to decision making

Manage risk by avoiding significant sector and interest rate bets

Careful management of yield curve strategies — while closely managing portfolio duration

RESULT

Fixed Income portfolios that:

Include domestic and global investment options, tax-free income opportunities, and access to areas of specialization such as high yield

Capitalize on GSAM’s industry-renowned credit research capabilities

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

Enhanced Income Fund

Dear Shareholder,

This report provides an overview on the performance of the Goldman Sachs Enhanced Income Fund during the one-year

reporting period that ended October 31, 2003.

Performance Review

Over the one-year period that ended October 31, 2003, the Fund’s Class A, Institutional, and Administration Shares generated cumulative total returns, without sales charges, of 1. 77%, 2. 18%, and 1. 93%, respectively. These returns compare to the 1. 39% and 1. 57% cumulative total returns of the Fund’s benchmarks, the Six-Month U. S. Treasury Bill Index and the One-Year U. S. Treasury Note Index, respectively. *

During the period, the Fund’s outperformance versus its benchmarks was primarily due to its exposure to corporate securities.

Investment Objective

The Fund seeks to generate a return in excess of traditional money market products while maintaining an emphasis on preservation of capital and liquidity. It is important to note that the Fund is not a money market fund and its net asset value will fluctuate.

Portfolio Composition

The Fund targets a duration of nine months, with diversified holdings in high credit quality sectors including U. S. Treasuries, agency, corporate, asset-backed, and money market instruments. The Fund invests in securities with a minimum credit quality of “A” by a Nationally Recognized Statistical Rating Organization (“NRSRO”) at the time of purchase or if unrated, determined by the investment adviser to be of comparable quality. The Fund’s duration position was neutral relative to its benchmarks over much of the period.

The Fund continues to emphasize shorter-term, higher credit securities that we believe have the potential to enhance results.

Portfolio Highlights

Agencies — 40. 0% on October 31, 2002 and 39. 1% on October 31, 2003.

Asset-Backed Securities (ABS) — 25. 9% on October 31, 2002 and 29. 6% on October 31, 2003.

Corporate Bonds — 26. 5% on October 31, 2002 and 28. 9% on October 31, 2003.

U. S. Treasuries — 4. 0% on October 31, 2002 and 0. 0% on October 31, 2003.

Cash Equivalents — 0. 0% on October 31, 2002 and 1. 6% on October 31, 2003.

* Based on performance returns that do not reflect the deduction of any applicable sales loads.

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

During the reporting period, the Fund’s corporate exposure was the leading driver of outperformance, as corporate spreads rallied over the period. Improving technicals, positive fundamentals, and declining volatility fueled the corporate sector’s strong recovery. Within the Fund, we continued to emphasize companies in sectors that showed persistent evidence of improving their balance sheets and those firms that we believe would benefit most from a business recovery.

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

Goldman Sachs U. S. Fixed Income Investment Management Team

November 10, 2003

3 FUND BASICS Enhanced Income Fund as of October 31, 2003

PERFORMANCE REVIEW Six-Month            One-Year November 1, 2002– Fund Total Return 30-Day            U. S. Treasury            U. S. Treasury Assets Under Management            October 31, 2003 (based on NAV)1 Standardized Yield2 Bill Index3 Note Index3

Class A 1. 77% 2. 16% 1. 39% 1. 57% $1. 5 Billion            Institutional 2. 18 2. 59 1. 39 1. 57 Administration 1. 93 2. 34 1. 39 1. 57

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 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities N A S D A Q S Y M B O L S 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 Class A Shares reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders. 3 The Six-Month U. S. Treasury Bill Index and One-Year U. S. Treasury Note Index, as reported by Merrill Lynch, do not reflect any GEIAX deduction for fees, expenses or taxes.

STANDARDIZED TOTAL RETURNS4

Institutional Shares For the period ended 9/30/03 Class A            Institutional            Administration GEIIX            One Year 0. 34% 2. 24% 1. 88% Since Inception 3. 91 4. 78 4. 51 (8/2/00) (8/2/00) (8/2/00)

Administration Shares 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 net asset value. These returns reflect a maximum initial sales charge of 1. 5% for Class A Shares. Because Institutional and Administration Shares do not involve a sales charge, such a charge is not applied to their Standardized GEADX Total Returns.

Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may 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.

PORTFOLIO COMPOSITION AS OF 10/31/035 Sector Allocation Agency Debentures* 39. 1% Asset-Backed Securities 29. 6 Corporate Bonds 28. 9 Cash Equivalents 1. 6

5 Figures represent a percentage of net assets and, due to rounding, may not sum to 100%. The Fund is actively managed and, as such, its composition may differ over time.

* Please note that not all Agencies are Agency rated for credit allocation purposes.

PORTFOLIO RESULTS

Ultra-Short Duration Government Fund

Dear Shareholder:

This report provides an overview on the performance of the Goldman Sachs Ultra-Short Duration Government Fund

during the one-year reporting period that ended October 31, 2003.

Performance Review

Over the one-year period that ended October 31, 2003, the Fund’s Class A, Institutional, and Service Shares generated cumulative total returns, without sales charges, of 1. 40%, 1. 69%, and 1. 29%, respectively. These returns compare to the 1. 39% and 1. 57% cumulative total returns of the Fund’s benchmarks, the Six-Month U. S. Treasury Bill Index and the One-Year U. S. Treasury Note Index, respectively. *

The Fund’s performance was generally in line with its benchmarks during the fiscal year. Security and sector selection typically helped returns while, toward the end of the period, the Fund’s mortgage holdings hurt relative results.

Investment Objective

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

Portfolio Composition

Over the period, the portfolio management team maintained a bias towards prepayment-protected mortgage securities, as investors took advantage of lower interest rates and mortgage refinancing reached record levels. As spreads widened at the end of the period, the Fund increased its exposure to premium collateralized mortgage obligations (CMOs) and adjustable rate mortgages (ARMs) at attractive valuations. The Fund reduced its exposure to agency debentures in favor of more attractive valuations within the mortgage sector.

On average, the Fund’s duration position generally was neutral relative to the benchmark over the period.

Portfolio Highlights

Adjustable Rate Mortgage Securities — 14. 8% on October 31, 2002 and 29. 3% on October 31, 2003.

Collateralized Mortgage Obligations — 19. 9% on October 31, 2002 and 23. 8% on October 31, 2003.

Fixed Rate Pass-Throughs — 23. 5% on October 31, 2002 and 25. 9% on October 31, 2003.

Agency Debentures — 24. 5% on October 31, 2002 and 8. 2% on October 31, 2003.

* Based on performance returns that do not reflect the deduction of any applicable sales loads.

PORTFOLIO RESULTS

During the reporting period, security selection among ARMs, CMOs, and fixed rate pass-throughs was a leading driver of performance. As mortgage refinancing reached historical highs, exposure to mortgage securities with lower call risks enhanced results. At the end of the reporting period, the mortgage sector proved to be somewhat of a drag on returns, as volatility persisted and mortgages underperformed Treasuries.

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

Goldman Sachs U. S. Fixed Income Investment Management Team

November 10, 2003

FUND BASICS

Ultra-Short Duration Government Fund

as of October 31, 2003

PERFORMANCE REVIEW

Six-Month One-Year November 1, 2002– Fund Total Return 30-Day U. S. Treasury U. S. Treasury Assets Under Management October 31, 2003 (based on NAV)1 Standardized Yield2 Bill Index3 Note Index3

Class A 1. 40% 1. 78% 1. 39% 1. 57% $247. 8 $2. 8 Billion Million Institutional 1. 69 2. 20 1. 39 1. 57 Service 1. 29 1. 70 1. 39 1. 57

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 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities N A S D A Q S Y M B O L S 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 Class A Shares reflect income actually earned and distributed by the Fund and, therefore, may not be correlated with the dividends or other distributions paid to shareholders. 3 The Six-Month U. S. Treasury Bill Index and One-Year U. S. Treasury Note Index, as reported by Merrill Lynch, do not reflect any GSAMX deduction for fees, expenses or taxes.

STANDARDIZED TOTAL RETURNS4 Institutional Shares For the period ended 9/30/03 Class A            Institutional            Service

GSARX One Year -0. 01% 1. 94% 1. 43% Five Years 3. 98 4. 75 4. 21 Ten Years N/A 5. 02 N/A Service Shares Since Inception 4. 73 5. 15 4. 42 (5/15/95) (7/17/91) (3/27/97)

GSASX 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 net asset value. These returns reflect a maximum initial sales charge of 1. 5% for Class A Shares. Because Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.

Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may 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.

PORTFOLIO COMPOSITION AS OF 10/31/03 5

Sector Allocation

Adjustable Rate Mortgage Securities 29. 3% Fixed Rate Pass-Throughs 25. 9 Collateralized Mortgage Obligations 23. 8 Agency Debentures 8. 2 Cash Equivalents 6. 0 Asset-Backed Securities 5. 2 U. S. Treasuries 1. 1 Commercial Mortgage-Backed Securities 0. 7

5 Figures represent a percentage of net assets and, due to rounding, may not sum to 100%. The Fund is actively managed and, as such, its composition may differ over time.

PORTFOLIO RESULTS

Short Duration Government Fund

Dear Shareholder:

This report provides an overview on the performance of the Goldman Sachs Short Duration Government Fund during the one-year reporting period that ended October 31, 2003.

Performance Review

Over the one-year period that ended October 31, 2003, the Fund’s Class A, B, C, Institutional, and Service Shares generated cumulative total returns, without sales charges, of 2. 11%, 1. 41%, 1. 26%, 2. 43%, and 1. 92%, respectively. These returns compare to the 2. 30% cumulative total return of the Fund’s benchmark, the Two-Year U. S. Treasury Note Index. *

During the reporting period, the Fund’s security and sector selection generally helped returns. While the Fund’s mortgage holdings were generally positive for results, they hurt relative results toward the end of the reporting period.

Investment Objective

The Fund seeks a high level of current income and secondarily, in seeking current income may also consider the potential for capital appreciation.

Portfolio Composition

Over the period, the portfolio management team maintained a preference for prepayment-protected mortgage securities, as investors took advantage of lower interest rates and mortgage refinancing reached record levels. The Fund continued to favor 15-year over 30-year mortgage pass-throughs and lower coupons over higher coupons. The Fund also increased its allocation to collateralized mortgage obligations (CMOs) and adjustable rate mortgages (ARMs) at attractive valuations, as spreads widened in the high refinancing rate environment. The Fund also reduced its exposure to agency debentures in favor of more attractive valuations within the mortgage sector.

The Fund’s duration strategy was neutral relative to its benchmark for much of the period. In late-March, the team implemented a long duration position relative to the benchmark as interest rates sold off. The duration was then moved back to a generally neutral position by the end of the period.

Portfolio Highlights

Adjustable Rate Mortgage Securities — 2. 9% on October 31, 2002 and 7. 3% on October 31, 2003.

Agency Debentures — 42. 8% on October 31, 2002 and 28. 8% on October 31, 2003.

Collateralized Mortgage Obligations — 21. 2% on October 31, 2002 and 23. 5% on October 31, 2003.

* Based on performance returns that do not reflect the deduction of any applicable sales loads.

PORTFOLIO RESULTS

Fixed Rate Pass-Throughs — 20. 5% on October 31, 2002 and 28. 6% on October 31, 2003.

The Fund’s continued emphasis on government-issued sectors such as agency debentures and mortgage-backed securities contributed positively to returns over the fiscal year. During the period, security selection among ARMs, CMOs, and fixed rate pass-throughs was a leading driver of performance. As mortgage refinancing reached historical highs, exposure to mortgage securities with lower call risks contributed to excess returns. At the end of the reporting period, the mortgage sector proved to be somewhat of a drag on returns, as volatility persisted and mortgages underperformed Treasuries.

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

Goldman Sachs U. S. Fixed Income Investment Management Team November 10, 2003

FUND BASICS Short Duration Government Fund as of October 31, 2003

PERFORMANCE REVIEW November 1, 2002– Fund Total Return 30-Day            Two-Year U. S. October 31, 2003 (based on NAV)1Standardized Yield2 Treasury Note Index3 Assets Under Management

Class A 2. 11% 2. 18% 2. 30% Class B 1. 41 1. 63 2. 30 $179 $919. 4 Million Class C 1. 26 1. 48 2. 30 Institutional 2. 43 2. 63 2. 30 Service 1. 92 2. 12 2. 30

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 NASDAQ SYMBOLS performance does not reflect the deduction of any applicable sales charges. 2 The 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities Class A Shares 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 GSSDX distributions paid to shareholders. 3 The Two-Year U. S. Treasury Note Index, as reported by Merrill Lynch, does not reflect any deduction for fees, expenses or taxes.

Class B Shares            STANDARDIZED TOTAL RETURNS4

For the period ended 9/30/03 Class A            Class B            Class C            Institutional            Service GSDGX One Year 0. 61% 0. 05% 0. 93% 3. 12% 2. 61% Five Years4. 984. 744. 575. 78 5. 26 Ten Years            N/A            N/A            N/A 5. 92 N/A Class C Shares Since Inception 5. 53 5. 22 4. 88 6. 76 5. 82 (5/1/97) (5/1/97) (8/15/97) (8/15/88) (4/10/96) GSDCX

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 net asset value. These returns reflect a maximum initial sales charge of 2% for Class A Shares, the assumed contingent deferred sales charge for Class B Shares (2% maximum declining to 0% after three years) and the assumed Institutional Shares contingent deferred sales charge for Class C Shares (1% if redeemed within 12 months of purchase). Because Institutional and Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.

Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The GSTGX investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance reflects expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Service Shares PORTFOLIO COMPOSITION AS OF 10/31/035 GSDSX Sector Allocation Agency Debentures 28. 8% Fixed Rate Pass-Throughs 28. 6 Collateralized Mortgage Obligations 23. 5 Adjustable Rate Mortgage Securities 7. 3 U. S. Treasuries 6. 7 Cash Equivalents 5. 5

5 Figures represent a percentage of net assets and, due to rounding, may not sum to 100%. The Fund is actively managed and, as such, its composition may differ over time.

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, 2003.

Performance Review

Over the one-year period that ended October 31, 2003, the Fund’s Class A, B, C, Institutional, and Service Shares generated cumulative total returns, without sales charges, of 3. 11%, 2. 34%, 2. 34%, 3. 60%, and 3. 01%, respectively. These returns compare to the 2. 83% cumulative total return of the Fund’s benchmark, the Lehman Brothers Government/Mortgage Index. *

The Fund’s performance was generally in line with its benchmark during the fiscal year. Security and sector selection typically helped returns while, during the third quarter of 2003, the Fund’s mortgage holdings hurt relative results.

Investment Objective

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

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 such, the Fund increased its exposure to hybrid adjustable-rate mortgages (ARMs) at attractive valuations and also added collateralized mortgage obligations (CMOs) that had suffered in the refinancing wave at the end of 2002. As a result, the Fund moved to an overweight position in the mortgage sector relative to the index.

The Fund’s duration strategy generally was neutral relative to its benchmark for much of the period. In late-March, the team implemented a long duration position relative to the benchmark as interest rates sold off. The Fund’s duration was then moved back to a generally neutral position by the end of the period.

Portfolio Highlights

Agency Debentures — 15. 8% on October 31, 2002 and 14. 9% on October 31, 2003.

Asset-Backed Securities — 9. 1% on October 31, 2002 and 2. 2% on October 31, 2003.

Mortgage-Backed Securities — 48. 6% on October 31, 2002 and 62. 7% on October 31, 2003.

U. S. Treasuries — 24. 3% on October 31, 2002 and 16. 7% on October 31, 2003.

* Based on performance returns that do not reflect the deduction of any applicable sales loads.

PORTFOLIO RESULTS

As mortgage refinancing reached record highs during the reporting period, mortgage security selection among ARMs, CMOs, and fixed rate pass-throughs was a major driver of Fund outperformance. Exposure to mortgage securities with lower call risks also enhanced returns. In the third quarter of 2003, the Fund’s overweight exposure to the mortgage sector relative to the index proved to be somewhat of a drag on returns, as volatility persisted and mortgages underperformed Treasuries.

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

Goldman Sachs U. S. Fixed Income Investment Management Team

November 10, 2003

FUND BASICS

Government Income Fund

as of October 31, 2003

PERFORMANCE REVIEW

November 1, 2002– Fund Total Return 30-Day Lehman Govt. / October 31, 2003 (based on NAV)1 Standardized Yield2 Mortgage Index3 Assets Under Management Class A 3. 11% 2. 41% 2. 83% Class B 2. 34 1. 77 2. 83 $587. 5 Million Class C 2. 34 1. 77 2. 83 Institutional 3. 60 2. 91 2. 83 Service 3. 01 2. 41 2. 83

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 NASDAQ SYMBOLS performance does not reflect the deduction of any applicable sales charges. 2 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 Class A Shares 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. GSGOX 3 The Lehman Brothers Government/Mortgage Index, an unmanaged index, does not reflect any deduction for fees, expenses or taxes.

STANDARDIZED TOTAL RETURNS4

Class B Shares

For the period ended 9/30/03 Class A            Class B            Class C            Institutional            Service GSOBX One Year -0. 94% -2. 19% 1. 93% 4. 22% 3. 63% Five Years 4. 95 4. 68 5. 10 6. 32 5. 77 Ten Years 6. 02 N/A            N/A            N/A 6. 415 Class C Shares Since Inception 6. 39 6. 36 6. 06 7. 26 6. 765 (2/10/93) (5/1/96) (8/15/97) (8/15/97) (2/10/93)5

GSOCX 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 net asset value. 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 Institutional Shares 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 GSOIX 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. Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may be Service Shares 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.

GSOSX PORTFOLIO COMPOSITION AS OF 10/31/036 Sector Allocation Mortgage-Backed Securities 62. 7% U. S. Treasuries 16. 7 Agency Debentures 14. 9 Cash Equivalents 10. 8 Asset-Backed Securities 2. 2 Municipal Bonds 0. 4

6 Figures represent a percentage of net assets and, due to rounding, may not sum to 100% . The Fund is actively managed and, as such, its composition may differ over time.

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, 2003.

Performance Review

Over the one-year period that ended October 31, 2003, the Fund’s Class A, B, C, Institutional, and Service Shares generated cumulative total returns, without sales charges, of 7. 03%, 6. 31%, 6. 21%, 7. 54%, and 6. 90%, respectively. These returns compare to the 4. 90% cumulative total return of the Fund’s benchmark, the Lehman Brothers Aggregate Bond Index. *

The Fund outperformed its benchmark over the reporting period. This was primarily due to the Fund’s exposure to strong performing corporate and mortgage-backed securities.

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 Composition

During 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 Fund’s benchmark. As mortgage prepayment risk remained high during much of the period, focus was placed on securities with prepayment protection. In particular, we emphasized 15-year over 30-year pass-throughs and lower coupons over higher coupons. During the period, the Fund moved from an overweight corporate bond allocation to a neutral position, while maintaining an overweight allocation to BBB rated corporate securities.

The Fund’s portfolio management team proactively managed duration and term structure strategies to respond to changing market conditions and the fluctuating interest rate environment. At the end of the 12-month period, the Fund held a neutral duration position and curve flattening bias. When the yield curve flattens, the spread between the yields of longer- and intermediate-maturity issues narrows.

Portfolio Highlights

Agency Debentures — 11. 9% on October 31, 2002 and 9. 1% on October 31, 2003.

Asset-Backed Securities (ABS) — 13. 5% on October 31, 2002 and 11. 7% on October 31, 2003.

Corporate Bonds — 27. 5% on October 31, 2002 and 19. 7% on October 31, 2003.

Emerging Market Debt (EMD) — 1. 2% on October 31, 2002 and 1. 0% on October 31, 2003.

* Based on performance returns that do not reflect the deduction of any applicable sales loads.

PORTFOLIO RESULTS

Mortgage-Backed Securities (MBS) — 39. 5% on October 31, 2002 and 52. 2% on October 31, 2003.

U. S. Treasuries — 21. 6% on October 31, 2002 and 9. 4% on October 31, 2003.

The Fund’s corporate and mortgage-backed securities were the main drivers of outperformance over the period. Specifically, the Fund’s overweight allocation to Telecom and BBB rated corporate bonds boosted returns as lower quality securities outperformed the broad corporate market. Exposure to mortgage securities with lower call risks also enhanced absolute and relative results. The Fund’s allocation to lower coupon, 15-year mortgage pass-throughs was also a positive for performance.

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

Goldman Sachs U. S. Fixed Income Investment Management Team

November 10, 2003

FUND BASICS

Core Fixed Income Fund as of October 31, 2003

PERFORMANCE REVIEW November 1, 2002– Fund Total Return 30-Day            Lehman Aggregate October 31, 2003 (based on NAV)1Standardized Yield2Bond Index3 Assets Under Management

Class A 7. 03% 2. 65% 4. 90% Class B 6. 31 2. 02 4. 90 $331. 5 $1. 2 Billion Million            Class C 6. 21 2. 03 4. 90 Institutional 7. 54 3. 17 4. 90 Service 6. 90 2. 67 4. 90

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 N A S D A Q S Y M B O L S performance does not reflect the deduction of any applicable sales charges. 2 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 Class A Shares 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. GCFIX 3 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.

Class B Shares STANDARDIZED TOTAL RETURNS4

GCFBX For the period ended 9/30/03 Class A            Class B            Class C            Institutional            Service One Year 2. 53% 1. 49% 5. 63% 8. 01% 7. 37% Five Years 5. 074. 855. 246. 475. 92 Class C Shares Since Inception 6. 50 6. 49 6. 16 7. 10 6. 93 (5/1/97) (5/1/97) (8/15/97) (1/5/94) (3/13/96) GCFCX

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 net asset value. 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 Institutional Shares Service Shares do not involve a sales charge, such a charge is not applied to their Standardized Total Returns.

Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The GSFIX investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance reflects expense limitations in effect. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Service Shares

PORTFOLIO COMPOSITION AS OF 10/31/035 GSCSX Sector Allocation Mortgage-Backed Securities 52. 2% Corporate Bonds 19. 7 Asset-Backed Securities 11. 7 U. S. Treasuries 9. 4 Agency Debentures 9. 1 Cash Equivalents* 5. 1 Other-Non-Dollar 2. 3 Emerging Market Debt 1. 0

5 Figures represent a percentage of net assets and, due to rounding, may not sum to 100%. The Fund is actively managed and, as such, its composition may differ over time.

* Cash equivalents include AAA rated and above short duration securities (duration < or = 1 year) that are defined as cash equivalents. MBS derivatives are not included.

PORTFOLIO RESULTS

Global Income Fund

Dear Shareholder:

This report provides an overview on the performance of the Goldman Sachs Global Income Fund during the one-year

reporting period that ended October 31, 2003.

Performance Review

Over the one-year period that ended October 31, 2003, the Fund’s Class A, B, C, Institutional, and Service Shares generated cumulative total returns, without sales charges, of 5. 45%, 4. 87%, 4. 96%, 6. 07%, and 5. 61%, respectively. These returns compare to the 2. 70% cumulative total return of the Fund’s benchmark, the J. P. Morgan Global Government Bond Index (hedged). *

The Fund’s outperformance versus its benchmark was largely due to the portfolio’s allocation to the corporate bond sector, while its emerging market trades, duration, and currency positions also contributed to performance.

Investment Objective

The Fund seeks a high total return, emphasizing current income, and, to a lesser extent, providing opportunities for capital appreciation.

Portfolio Positioning

The government bond market was extremely volatile over the one-year reporting period. The end of 2002 was characterized by continued uncertainty over the sustainability of an economic rebound. As the new year began, global terrorism threats and geopolitical risks, in particular the situations in Iraq, North Korea, and Venezuela, led to increased demand for fixed income securities. U. S. Treasuries rallied over February and early March 2003, as a war in Iraq appeared increasingly likely. The bond market then quickly reversed course and sold off when the major military action in Iraq ended. After the Federal Reserve Board (the “Fed”) expressed concerns over deflation, yields fell to record lows in June 2003. However, optimistic comments from Fed Chairman Alan Greenspan caused a market sell-off in July. Bonds then rallied in September as the Fed stressed the need for improvement in the labor market before it would consider raising short-term interest rates. As the reporting period came to a close, bond prices were generally weak as strong economic data signaled continued growth momentum.

The Fund’s long U. S. security position, initiated in July, detracted from results. This position was subsequently eliminated in August 2003. The Fund’s short Europe/long U. S. security position detracted from performance in July, as European bonds outperformed U. S. 10-year bonds. The Fund’s U. S. curve flattening positions, held throughout the second quarter of 2003, hurt performance as the curve steepened and yields rose substantially across the curve. The Fund maintained its underweight Japan position over the period, since yields were close to all

* Based on performance returns that do not reflect the deduction of any applicable sales loads.

PORTFOLIO RESULTS

time lows and we saw little further upside to owning short maturity Japanese government bonds. Finally, during the reporting period, the Fund’s long U. S. /short Canada and short UK/long Europe security positions also enhanced results.

The Fund’s overweight allocation to corporate bonds was a positive contributor to performance during the fiscal year. The corporate sector staged a dramatic rally in response to falling investor risk aversion, rising equity markets, declining volatility, and stronger economic data releases from the U. S. Expectations of improving credit quality were based on continued corporate balance sheet repair. The Fund’s allocation to the strong-performing Auto and Telecom sectors, as well as thorough bottom-up security selection, were the key drivers of outperformance versus its benchmark.

The Fund’s currency strategy was also a positive contributor to results. In particular, our short U. S. dollar bias was beneficial as the currency depreciated substantially over the period. The dollar’s weakness gained momentum following the Group of 7 (“G7”) meeting in September 2003. The G7’s comments against fixed currency regimes reverberated through the market and provoked a sharp fall in the U. S. dollar against a range of Asian currencies.

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

Goldman Sachs Global Fixed Income Investment Management Team

November 10, 2003

FUND BASICS

Global Income Fund

as of October 31, 2003

PERFORMANCE REVIEW

November 1, 2002– Fund Total Return 30-Day JPM Global Govt. October 31, 2003 (based on NAV)1 Standardized Yield2 Bond Index3 Assets Under Management

Class A 5. 45% 2. 02% 2. 70% Class B 4. 87 1. 61 2. 70 $363. 9 Million Class C 4. 96 1. 61 2. 70 Institutional 6. 07 2. 76 2. 70 Service 5. 61 2. 26 2. 70

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 N A S D A Q S Y M B O L S performance does not reflect the deduction of any applicable sales charges. 2 The 30-Day Standardized Yield of the Fund is calculated by dividing the net investment income per share (as defined by securities Class A Shares 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 GSGIX distributions paid to shareholders. 3 The J. P. Morgan Global Government Bond Index (hedged), an unmanaged index, does not reflect any deduction for fees, expenses or taxes.

Class B Shares

STANDARDIZED TOTAL RETURNS4 GSLBX For the period ended 9/30/03 Class A            Class B            Class C            InstitutionalService One Year 0. 69% -0. 39% 3. 87% 6. 11% 5. 57% Five Years3. 15 3. 17 3. 59 4. 78 4. 24 Class C Shares Ten Years 5. 94 N/A            N/A            N/A 6. 525 Since Inception 6. 51 6. 01 5. 29 7. 68 6. 995 GSLCX (8/2/91) (5/1/96) (8/15/97) (8/1/95) (8/2/91)5

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 net asset value. These returns reflect a maximum initial sales charge of 4. 5% for Class A Shares, Institutional 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. GSGLX 5 Performance data for Service Shares prior to 3/12/97 (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. Service Shares Total return figures in the above charts represent past performance and do not indicate future results, which will vary. The investment return and principal value of an investment will fluctuate and, therefore, an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance reflects expense limitations in effect. In their absence, performance would GGISX be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

TOP CURRENCY POSITIONS AS OF 10/31/036 Currency Exposure (%) Euro Currency 39. 4% Canadian Dollar 2. 0% U. S. Dollar 26. 5 South African Rand 1. 0 Japanese Yen 15. 5 German Mark 1. 0 Great Britain Pound 5. 3 Danish Krone 1. 0 Australian Dollar 4. 3 Swedish Krona 0. 4

6 Figures represent a percentage of net assets and, due to rounding, may not sum to 100%. The Fund is actively managed and, as such, its composition may differ over time.

 GOLDMAN SACHS ENHANCED INCOME FUND

Performance Summary

October 31, 2003

The following graph shows the value, as of October 31, 2003, of a $10,000 investment made on August 2, 2000 (commencement of operations) in the Institutional shares of the Goldman Sachs Enhanced Income Fund. For comparative purposes, the performance of the Fund’s benchmarks, the Six-Month U.S. Treasury Bill Index and One-Year U.S. Treasury Note Index (“Six-Month T-Bill Index/One-Year T-Note Index”), as well as the Lehman Brothers Mutual Fund Short (1-2) U.S. Government Index (“Lehman 1-2 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. Performance of Class A and Administration shares will vary from 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 portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Enhanced Income Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested August 2, 2000 to October 31, 2003.

Average Annual Total Return through October 31, 2003	Since Inception		One Year
Class A (commenced August 2, 2000)
Excluding sales charges		4.29%		1.77%
Including sales charges		3.81%		0.29%
Institutional Class (commenced August 2, 2000)		4.67%		2.18%
Administration Class (commenced August 2, 2000)		4.43%		1.93%

20

GOLDMAN SACHS ENHANCED INCOME FUND 

Statement of Investments

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Corporate Bonds – 28.9%
Banks – 10.7%
Abbey National First
$	10,000,000		8.20	%		10/15/2004	$	10,631,532
Bank of America Corp.
	11,500,000		7.63			04/15/2005		12,447,861
	9,500,000		6.38			05/15/2005		10,146,419
BB&T Corp.
	15,000,000		6.38	#		06/30/2005		16,071,214
BCH Cayman Islands
	4,000,000		8.25			06/15/2004		4,162,548
Citicorp, Inc.
	6,000,000		7.75			06/15/2006		6,761,435
Credit Suisse FB USA, Inc.
	6,000,000		5.88			08/01/2006		6,486,033
Donaldson, Lufkin & Jenrette, Inc.-DLJ
	10,000,000		6.88			11/01/2005		10,881,451
FleetBoston Financial Corp.
	8,000,000		7.25			09/15/2005		8,743,220
Golden West Financial Corp.
	3,200,000		5.50			08/08/2006		3,432,765
HSBC USA, Inc.
	10,000,000		7.00			11/01/2006		11,138,721
Nordea Bank Finland PLC
	2,500,000		6.50			01/15/2006		2,711,352
PNC Bank NA
	1,800,000		7.88			04/15/2005		1,955,338
PNC Funding Corp.
	3,112,000		7.75			06/01/2004		3,223,245
Popular North America, Inc.
	5,928,000		6.63			01/15/2004		5,987,855
RBSG Capital Corp.
	11,780,000		10.13			03/01/2004		12,101,276
Santander Financial Issuances
	2,565,000		7.25			05/30/2006		2,847,014
US Bancorp
	6,000,000		6.75			10/15/2005		6,515,063
Wachovia Corp.
	6,250,000		6.88			09/15/2005		6,790,282
	2,989,000		7.50			07/15/2006		3,360,540
Washington Mutual, Inc.
	4,118,000		7.50			08/15/2006		4,615,565
Wells Fargo & Co.
	3,800,000		7.25			08/24/2005		4,148,622
	3,325,000		6.75			10/01/2006		3,685,126
	5,000,000		3.12			08/15/2008		4,832,207
							$	163,676,684
Brokerage – 1.4%
Lehman Brothers, Inc.
$	2,100,000		7.63	%		06/01/2006	$	2,353,407
Morgan Stanley Group, Inc.
	7,500,000		5.80			04/01/2007		8,140,472
The Bear Stearns Companies, Inc.
	5,000,000		6.50			05/01/2006		5,471,294
	5,000,000		5.70			01/15/2007		5,390,928
							$	21,356,101
Captive-Automotive – 0.4%
General Motors Acceptance Corp.
	5,600,000		6.38	%		01/30/2004	$	5,664,859
Chemicals – 0.6%
Rohm and Haas Co.
$	1,300,000		6.95	%		07/15/2004	$	1,347,763
The Dow Chemical Co.
	7,890,000		5.25			05/14/2004		8,009,155
							$	9,356,918
Electric – 0.8%
FPL Group Capital Inc.
$	5,000,000		1.44	%#		03/30/2005	$	4,999,725
Singapore Power Ltd.†
	6,500,000		3.80			10/22/2008		6,508,678
							$	11,508,403
Entertainment – 0.8%
CBS Corp.
$	10,000,000		7.15	%		05/20/2005	$	10,777,442
Viacom, Inc.
	1,000,000		6.40			01/30/2006		1,085,059
							$	11,862,501
Financial-Other – 0.1%
Transamerica Finance Corp.
$	2,050,000		7.50	%		03/15/2004	$	2,091,754
Food & Beverage – 0.9%
Nabisco, Inc.
$	11,500,000		6.85	%		06/15/2005	$	12,331,189
Sara Lee Corp.
	1,500,000		6.40			06/09/2005		1,601,311
							$	13,932,500
Integrated – 0.6%
Conoco Phillips
$	9,000,000		8.50	%		05/25/2005	$	9,903,995
Life Insurance – 4.9%
AXA Financial, Inc.
$	4,000,000		9.00	%		12/15/2004	$	4,310,739
Equitable Life Assurance Society†
	7,080,000		6.95			12/01/2005		7,732,181
Jackson National Life Insurance Co.†
	2,000,000		5.25			03/15/2007		2,127,798
John Hancock Global Funding
	7,600,000		6.50			06/22/2004		7,816,083
Lincoln National Corp.
	3,750,000		7.25			05/15/2005		4,056,360
Metropolitan Life Insurance Co.†
	16,290,000		7.00			11/01/2005		17,717,558
Monumental Global Funding II†
	5,000,000		6.05			01/19/2006		5,380,300
Monumental Global Funding III†
	4,390,000		5.20			01/30/2007		4,731,292
Principal Financial Group (Australia)†
	10,000,000		7.95			08/15/2004		10,414,260

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

 GOLDMAN SACHS ENHANCED INCOME FUND

Statement of Investments (continued)

April 30, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Corporate Bonds – (continued)
Life Insurance – (continued)
Prudential Insurance Co.†
$	8,450,000		6.38	%		07/23/2006	$	9,244,300
Reliastar Financial Corp.
	1,400,000		8.00			10/30/2006		1,575,560
							$	75,106,431
Media-Non Cable – 0.2%
INTELSAT
$	3,000,000		8.38	%		10/14/2004	$	3,151,395
Noncaptive-Consumer – 2.9%
American General Finance Corp.
$	9,000,000		5.88	%		07/14/2006	$	9,715,284
	8,500,000		4.50			11/15/2007		8,813,088
Aristar, Inc.
	4,000,000		8.25			06/15/2005		4,389,622
	7,500,000		6.25			05/15/2006		8,138,922
Countrywide Home Loans, Inc.
	5,500,000		1.62	#		06/02/2006		5,514,509
Household Finance Corp.
	5,000,000		5.75			01/30/2007		5,391,049
Washington Mutual Financial Corp.
	2,710,000		7.38			09/01/2004		2,840,625
							$	44,803,099
Noncaptive-Diversified – 0.2%
General Electric Capital Corp.
$	3,100,000		5.35	%		03/30/2006	$	3,305,778
Property/ Casualty Insurance – 1.3%
ACE INA Holdings, Inc.
$	2,000,000		8.20	%		08/15/2004	$	2,096,574
	2,000,000		8.30			08/15/2006		2,266,923
ACE Ltd.
	6,487,000		6.00			04/01/2007		6,998,072
The Hartford Financial Services Group, Inc.
	7,815,000		7.75			06/15/2005		8,499,533
							$	19,861,102
Tobacco – 0.1%
UST, Inc.
$	2,050,000		8.80	%		03/15/2005	$	2,223,843
Wireless Telecommunications – 2.1%
Verizon Global Funding Corp.
$	2,000,000		7.60	%		03/15/2007	$	2,276,552
	7,000,000		6.13			06/15/2007		7,700,373
Verizon Wireless Capital LLC
	9,250,000		5.38			12/15/2006		9,876,325
Vodafone Group PLC
	11,000,000		7.63			02/15/2005		11,815,302
							$	31,668,552
Wirelines Telecommunications – 0.9%
British Telecom PLC
$	13,000,000		7.88	%		12/15/2005	$	14,401,223
TOTAL CORPORATE BONDS
(Cost $432,626,081)							$	443,875,138
Agency Debentures – 39.1%
African Development Bank
$	1,000,000		6.75	%		10/01/2004	$	1,048,183
European Investment Bank
	5,000,000		8.25			12/20/2004		5,373,110
Federal Farm Credit Bank
	7,000,000		5.10			04/26/2004		7,131,313
	5,000,000		5.45			01/19/2005		5,236,100
	4,500,000		5.40			05/10/2006		4,830,350
	6,000,000		5.70			06/08/2006		6,150,750
	6,500,000		6.60			07/07/2006		7,194,057
Federal Home Loan Banks
	1,000,000		5.38			01/05/2004		1,007,210
	7,000,000		2.88			12/23/2005		7,014,651
	7,000,000		5.50			07/19/2006		7,198,289
	25,000,000		4.30			10/30/2006		26,084,825
	8,000,000		5.20			05/23/2007		8,458,272
	10,000,000		3.59			10/22/2007		10,096,690
	9,145,000		3.00			06/02/2008		8,953,083
Federal Home Loan Mortgage Corp.
	17,000,000		2.05			01/28/2005		17,022,241
	22,000,000		2.60			06/03/2005		22,021,792
	20,000,000		2.50			07/28/2005		20,045,364
	10,628,000		0.00	•		01/15/2006		10,118,483
	12,000,000		2.75			05/05/2006		12,010,262
	6,550,000		6.75			05/30/2006		7,240,762
	13,516,000		3.10			06/19/2006		13,545,154
	30,000,000		4.00			08/02/2006		30,586,620
	26,800,000		3.70			08/23/2006		27,294,192
	11,628,000		0.00	•		01/15/2007		10,623,376
	15,000,000		5.13			02/13/2007		15,164,910
	8,000,000		3.16			05/07/2007		8,075,968
	35,750,000		4.50			07/23/2007		36,387,064
	7,175,000		6.00			09/12/2008		7,461,864
Federal National Mortgage Association
	5,000,000		7.88			02/24/2005		5,409,130
	3,000,000		7.65			03/10/2005		3,252,319
	5,000,000		2.75			06/03/2005		5,005,614
	10,000,000		3.75			07/29/2005		10,162,801
	20,000,000		0.00/1.75	§		10/07/2005		20,042,300
	13,700,000		3.05			06/05/2006		13,719,892
	22,505,000		3.10	^		07/28/2006		22,581,652
	5,000,000		3.75			08/09/2006		5,088,375
	18,000,000		3.89			08/16/2006		18,344,880
	5,000,000		3.51			08/23/2006		5,058,390
	27,000,000		4.88			03/11/2007		27,343,037
	30,000,000		5.42			04/04/2007		31,428,177
	7,000,000		6.52			07/11/2007		7,876,589
	16,800,000		3.70			11/01/2007		16,984,800
	3,000,000		4.00			11/05/2007		3,000,914
	6,000,000		4.00			11/12/2008		6,063,000
Financing Corp. (FICO) Strip•
	3,073,000		0.00			04/05/2006		2,898,435

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

GOLDMAN SACHS ENHANCED INCOME FUND 

Principal		Interest			Maturity
Amount		Rate			Date		Value
Agency Debentures – (continued)
Government Backed Trust•
$	5,613,000		0.00	%		11/15/2003	$	5,610,250
Government Loan Trust•
	7,644,000		0.00			04/01/2007		6,878,927
Government Trust Certificates•
	3,000,000		0.00			11/15/2003		2,998,530
	5,000,000		0.00			05/15/2004		4,959,520
	6,187,000		0.00			11/15/2004		6,077,849
Inter-American Development Bank
	9,000,000		3.53			05/25/2005		9,245,484
	1,000,000		6.25			04/15/2006		1,091,892
KFW International Finance, Inc.
	1,000,000		5.00			11/25/2003		1,002,098
	4,650,000		8.25			11/30/2004		4,983,563
Landesbank Baden-Wuerttemberg Girozentrale
	5,170,000		7.88			04/15/2004		5,329,805
Oesterreich Federal Financing Agency
	3,000,000		7.38			05/11/2005		3,239,457
Singapore Power Ltd.
	1,500,000		7.25			04/28/2005		1,613,244
TOTAL AGENCY DEBENTURES
(Cost $592,838,014)							$	600,665,859
Asset-Backed Securities – 29.6%
Auto – 26.4%
AESOP Funding II LLC Series 2003-3A, Class A1†
$	20,000,000		2.75	%		07/20/2007	$	19,981,800
AmeriCredit Automobile Receivables Trust Series 1999-D, Class A3
	2,365,568		7.02			12/12/2005		2,376,829
AmeriCredit Automobile Receivables Trust Series 2000-A, Class A4
	14,503,754		7.29			12/05/2006		14,733,690
AmeriCredit Automobile Receivables Trust Series 2002-B, Class A3
	15,500,000		3.78			02/12/2007		15,718,045
BMW Vehicle Owner Trust Series 2002-A, Class A4
	9,000,000		4.46			05/25/2007		9,351,858
Capital One Auto Finance Trust Series 2001-A, Class A3
	10,617,757		4.83			09/15/2005		10,718,454
Capital One Auto Finance Trust Series 2002-B, Class A3A
	35,000,000		2.71			10/16/2006		35,320,254
CPS Auto Trust Series 2001-A, Class A1†
	854,747		4.37			09/15/2005		863,027
CPS Auto Trust Series 2002-A, Class A1
	1,556,824		3.74			01/15/2006		1,577,744
Daimlerchrysler Auto Trust Series 2000-B, Class A4
	19,046,841		7.63			06/08/2005		19,357,747
Daimlerchrysler Auto Trust Series 2000-D, Class A3
	489,204		6.66			01/08/2005		489,686
Daimlerchrysler Auto Trust Series 2000-D, Class A4
	15,000,000		6.70			03/08/2006		15,384,148
Daimlerchrysler Auto Trust Series 2001-D, Class A3
	11,450,954		3.15			11/06/2005		11,530,230
Drive Auto Receivables Trust Series 2002-1, Class A3†
	23,333,000		3.68			09/15/2006		23,712,161
Duck Auto Grantor Trust Series 2001-C, Class A†§
	1,820,398		0.00/3.44			05/15/2006		1,831,206
Duck Auto Grantor Trust Series 2002-A, Class A†§
	6,529,837		0.00/4.16			02/15/2007		6,613,501
Franklin Auto Trust Series 2001-2, Class A3
	6,996,134		3.77			02/20/2006		7,055,907
Franklin Auto Trust Series 2002-1, Class A3
	13,026,537		3.74			11/20/2006		13,181,227
Household Automotive Trust Series 2002-1, Class A3
	44,000,000		3.75			09/18/2006		44,696,507
Long Beach Auto Receivables Trust Series 2001-A, Class A3†
	8,736,998		5.20			03/13/2006		8,854,401
Long Beach Auto Receivables Trust Series 2001-B, Class A3†
	12,455,813		3.94			10/13/2006		12,627,081
MFN Auto Receivables Trust Series 2002-A, Class A1†
	3,808,554		3.81			01/15/2005		3,838,309
Nissan Auto Receivables Owner Trust Series 2001-C, Class A3
	3,267,671		4.31			05/16/2005		3,287,328
Onyx Acceptance Auto Trust Series 2001-D, Class A3
	3,498,508		3.63			12/15/2005		3,521,065
Onyx Acceptance Auto Trust Series 2002-A, Class A3
	8,571,397		3.75			04/15/2006		8,661,429
Onyx Acceptance Auto Trust Series 2002-C, Class A3
	21,413,658		3.29			09/15/2006		21,646,354
Union Acceptance Corp. Series 2000-D, Class A3
	187,126		6.72			10/11/2005		187,068
Union Acceptance Corp. Series 1999-C, Class A4§
	1,723,580		0.00/6.82			01/09/2006		1,732,119
Union Acceptance Corp. Series 2000-A, Class A4§
	4,629,825		0.00/7.44			04/10/2006		4,720,545
WFS Financial Owner Trust Series 2002-1, Class A3A
	34,252,458		4.15			12/20/2006		34,765,755
WFS Financial Owner Trust Series 2002-2, Class A3
	40,000,000		3.81			02/20/2007		40,580,512
World Omni Auto Receivables Trust Series 2001-B, Class A3
	6,028,746		3.79			11/21/2005		6,081,062
							$	404,997,049
Equipment – 3.0%
Ikon Receivables LLC Series 2002-1, Class A3
$	26,645,056		3.90	%		10/15/2006	$	26,995,657
Ikon Receivables LLC Series 2003-1, Class A3B
	20,000,000		2.33			12/17/2007		20,138,118
							$	47,133,775
Student Loans – 0.2%
Union Financial Services-1, Inc. Series 1998-A, Class A8
$	2,790,400		5.50	%		09/01/2005	$	2,867,052
TOTAL ASSET-BACKED SECURITIES
(Cost $452,432,024)							$	454,997,876

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

 GOLDMAN SACHS ENHANCED INCOME FUND

Statement of Investments (continued)

April 30, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Repurchase Agreement – 1.6%
Joint Repurchase Agreement Account IIΔ
$	23,800,000		1.06	%		11/03/2003	$	23,800,000
Maturity Value: $23,802,102
TOTAL REPURCHASE AGREEMENT
(Cost $23,800,000)							$	23,800,000
TOTAL INVESTMENTS
(Cost $1,501,696,119)							$	1,523,338,873

†	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounted to $142,177,853, which represents 9.3% of net assets as of October 31, 2003.
*	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2003.
§	These securities are issued with a zero coupon which increases to the stated rate at a set date in the future.
Δ	Joint repurchase agreement was entered into on October 31, 2003.
^	A portion of this security is segregated as collateral for initial margin requirement on futures transactions.
•	Security issued with a zero coupon. Income is recognized through the accretion of discount.

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

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

GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND 

Performance Summary

October 31, 2003

The following graph shows the value, as of October 31, 2003, of a $10,000 investment made on August 1, 1991 in the Institutional shares of the Goldman Sachs Ultra-Short Duration Government Fund. For comparative purposes, the performance of the Fund’s benchmarks, the Six-Month U.S. Treasury Bill Index and One-Year U.S. Treasury Note Index (“Six-Month T-Bill Index/ One-Year T-Note Index”), as well as the Lehman Brothers Mutual Fund Short (1-2) U.S. Government Index (“Lehman 1-2 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. Performance of Class A 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 investment selection and allocation, other factors may affect portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Ultra-Short Duration Government Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested August 1, 1991 to October 31, 2003.^(a)

Average Annual Total Return through October 31, 2003	Since Inception		Ten Years		Five Years		One Year
Class A (commenced May 15, 1995)
Excluding sales charges		4.88%		n/a		4.36%		1.40%
Including sales charges		4.69%		n/a		4.04%		-0.15%
Institutional Class (commenced July 17, 1991)		5.11%		5.01%		4.77%		1.69%
Service Class (commenced March 27, 1997)		4.36%		n/a		4.28%		1.29%

(a)  For comparative purposes, initial investment is assumed to be made on the first day of the month following commencement of operations.

25

 GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND

Statement of Investments

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – 79.7%
Adjustable Rate Federal Home Loan Mortgage Corp. (FHLMC)# – 3.2%
$	624,763		3.35	%		07/01/2018	$	642,373
	170,384		3.61			09/01/2018		174,342
	1,357,902		5.69			11/01/2018		1,382,464
	274,925		3.51			12/01/2018		280,986
	1,763,946		3.54			05/01/2019		1,802,346
	5,023,246		4.27			11/01/2019		5,091,663
	3,899,931		6.88			11/01/2019		4,080,888
	2,515,929		3.39			01/01/2020		2,585,359
	853,275		3.55			05/01/2020		879,198
	4,486,782		3.37			06/01/2020		4,616,141
	99,072		3.48			02/01/2021		101,351
	6,026,577		3.85			02/01/2022		6,232,746
	1,383,163		3.31			06/01/2022		1,416,165
	739,785		3.55			08/01/2022		758,220
	1,293,270		3.33			09/01/2022		1,330,498
	953,372		3.37			09/01/2022		969,980
	1,687,682		3.73			06/01/2024		1,738,335
	6,732,339		3.59			12/01/2026		6,994,319
	13,871,677		3.75			04/01/2027		14,282,801
	514,124		3.39			02/01/2028		525,752
	17,532,575		3.65			04/01/2028		18,000,664
	3,582,047		6.59			08/01/2028		3,710,786
	1,862,847		3.67			05/01/2029		1,933,901
	1,705,704		7.16			06/01/2029		1,743,124
	1,082,707		3.58			07/01/2030		1,111,146
	1,660,503		7.58			11/01/2030		1,757,692
	2,070,665		3.57			12/01/2030		2,154,540
	498,645		3.39			02/01/2031		502,110
	2,654,235		6.22			05/01/2035		2,735,192
							$	89,535,082
Adjustable Rate Federal National Mortgage Association (FNMA)# – 16.6%
$	227,753		3.23	%		11/01/2014	$	233,711
	654,441		3.52			03/01/2017		665,995
	2,475,223		6.72			04/01/2017		2,570,193
	129,784		3.08			11/01/2017		132,572
	1,151,388		2.54			03/01/2018		1,153,801
	226,613		3.07			03/01/2018		230,358
	1,030,293		3.57			03/01/2018		1,040,466
	3,728,849		3.60			07/01/2018		3,765,729
	763,534		4.03			08/01/2018		789,067
	505,080		3.18			10/01/2018		516,106
	1,121,634		3.68			10/01/2018		1,138,008
	1,249,990		3.16			11/01/2018		1,278,439
	28,576		3.17			11/01/2018		29,077
	655,569		3.47			01/01/2019		661,400
	2,009,684		4.04			04/01/2019		2,030,992
	1,341,260		3.27			05/01/2019		1,354,144
	3,552,585		3.42			05/01/2019		3,605,721
	1,211,771		3.67			06/01/2019		1,223,982
	680,268		3.82			06/01/2019		690,534
	812,162		6.16			07/01/2019		840,850
	261,345		3.23			08/01/2019		266,860
	1,005,250		3.68			08/01/2019		1,020,229
	1,358,986		4.27			08/01/2019		1,373,643
	77,946		3.37			09/01/2019		80,118
	204,036		4.22			09/01/2019		206,225
	385,733		3.30			10/01/2019		395,895
	322,094		3.72			11/01/2019		325,340
	5,759,957		3.85			11/01/2019		5,995,251
	145,573		3.70			04/01/2020		147,778
	2,958,176		5.74			05/01/2020		3,076,060
	1,568,180		3.51			06/01/2020		1,591,246
	492,365		3.76			06/01/2020		499,572
	1,688,054		2.97			07/01/2020		1,718,612
	887,115		3.70			11/01/2020		900,333
	531,867		3.81			11/01/2020		547,888
	1,829,103		2.53			12/25/2020		1,801,490
	2,236,792		3.58			01/01/2021		2,291,038
	831,154		3.59			02/01/2021		849,107
	1,024,745		3.93			03/01/2021		1,040,457
	207,326		4.00			12/01/2021		210,557
	2,967,907		3.97			01/01/2022		3,009,577
	30,886		5.98			01/01/2022		32,084
	198,229		6.34			02/01/2022		206,094
	408,681		5.07			05/20/2022		413,023
	13,101,592		2.89			12/01/2022		13,338,826
	777,951		3.43			02/01/2023		800,913
	35,922		6.23			12/01/2023		36,819
	2,560,918		3.64			01/01/2024		2,638,156
	2,026,606		3.15			03/01/2024		2,084,012
	13,675,345		3.74			04/01/2024		13,826,757
	2,337,498		5.08			06/20/2024		2,362,337
	88,803		3.42			07/01/2024		89,858
	904,355		5.15			01/01/2025		927,880
	2,598,092		3.66			05/01/2025		2,682,605
	459,253		6.70			10/01/2025		463,627
	46,944		7.20			01/01/2028		48,548
	537,453		4.80			07/01/2028		556,531
	1,702,975		3.96			01/01/2029		1,721,966
	2,515,766		5.16			07/01/2029		2,586,813
	3,929,980		3.48			01/01/2030		4,019,125
	3,270,335		4.14			05/01/2030		3,315,749
	2,089,270		2.78			06/01/2030		2,112,159
	2,070,480		2.78			11/01/2030		2,101,588
	12,060,937		3.56			01/01/2031		12,369,920
	2,705,876		5.97			05/01/2031		2,814,864
	3,205,219		5.73			06/01/2031		3,293,683
	7,666,912		5.68			07/01/2031		7,803,525
	4,950,878		5.72			08/01/2031		5,093,513
	1,190,744		6.23			08/01/2031		1,230,911
	4,647,421		6.30			08/01/2031		4,807,176
	6,240,028		5.70			11/01/2031		6,422,360
	2,121,258		5.59			12/01/2031		2,178,140
	4,836,084		6.19			01/01/2032		4,994,151
	4,451,101		6.47			01/01/2032		4,604,107
	4,037,770		6.45			02/01/2032		4,180,950
	3,761,923		5.84			03/01/2032		3,867,257
	7,472,003		6.17			03/01/2032		7,730,092
	1,655,362		5.20			05/01/2032		1,675,184

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

GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND 

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Adjustable Rate Federal National Mortgage Association (FNMA)# – (continued)
FNMA Series 1997-20, Class F
$	5,230,498		1.91	%		03/25/2027	$	5,215,010
	2,362,175		5.96			07/01/2032		2,441,138
	2,588,940		4.84			09/01/2032		2,662,914
	3,621,734		6.41			09/01/2032		3,694,711
	2,376,507		4.91			10/01/2032		2,445,371
	3,831,102		5.04			10/01/2032		3,905,057
	4,140,102		5.11			11/01/2032		4,245,389
	3,151,366		4.96			12/01/2032		3,199,161
	4,742,964		5.00			12/01/2032		4,821,749
	5,123,594		5.05			12/01/2032		5,218,681
	2,931,499		5.17			12/01/2032		3,009,118
	2,821,630		5.26			12/01/2032		2,942,341
	3,295,131		5.02			01/01/2033		3,352,274
	2,575,254		5.12			01/01/2033		2,626,420
	17,505,676		4.45			02/01/2033		17,825,582
	7,951,495		4.84			02/01/2033		8,046,666
	6,880,764		4.91			02/01/2033		7,062,058
	12,534,037		5.03			02/01/2033		12,787,225
	2,791,454		5.05			02/01/2033		2,841,146
	7,743,211		4.50			03/01/2033		7,939,487
	24,060,976		4.77			03/01/2033		24,733,968
	20,628,916		4.80			03/01/2033		21,098,178
	22,377,476		4.47			05/01/2033		22,733,940
	17,916,100		4.56			05/01/2033		18,338,817
	3,061,499		4.75			05/01/2033		3,142,928
	48,535,761		4.13			04/01/2034		49,459,331
	1,413,866		2.78			05/01/2040		1,435,108
	14,998,104		2.78			06/01/2040		15,223,439
	6,415,641		6.25			07/01/2040		6,621,131
	20,256,136		2.78			10/01/2040		16,171,226
							$	465,969,288
Adjustable Rate Government National Mortgage Association (GNMA)# – 2.4%
$	873,277		4.38	%		03/01/2016	$	887,353
	930,367		5.75			08/20/2018		949,209
	1,056,541		4.38			02/20/2021		1,074,831
	489,171		4.38			06/20/2022		498,220
	367,051		5.75			08/20/2022		374,926
	500,559		4.38			06/20/2023		509,863
	2,249,276		5.75			09/20/2023		2,297,545
	3,388,851		4.38			05/20/2024		3,452,094
	4,350,420		5.75			07/20/2024		4,435,374
	2,668,526		5.75			07/20/2025		2,725,841
	7,474,015		5.63			11/20/2025		7,714,294
	3,313,935		4.38			02/20/2027		3,365,999
	3,811,336		4.38			03/20/2027		3,871,211
	6,405,806		5.75			08/20/2027		6,547,688
	7,891,842		4.25			01/01/2028		7,996,452
	1,912,808		4.38			01/20/2028		1,942,503
	4,804,652		4.25			02/20/2028		4,868,047
	7,540,827		4.38			02/20/2028		7,658,162
	4,104,578		4.25			03/20/2028		4,158,471
	2,907,682		4.38			05/20/2028		2,962,246
							$	68,290,329
Adjustable Rate Non-Agency# – 7.1%
Bank of America Mortgage Securities Series 2002-J, Class A2
$	5,851,142		4.88	%		05/25/2032	$	5,929,194
CS First Boston Mortgage Securities Corp. Series 2003-AR9, Class 2A2
	19,655,812		5.10			03/25/2033		19,985,141
Merrill Lynch Mortgage Investors, Inc. Series 2002-A2, Class 2A
	2,068,499		5.97			05/25/2032		2,076,481
Sequoia Mortgage Trust Series 8, Class 1A2
	2,937,843		3.46			08/20/2032		2,985,891
Sequoia Mortgage Trust Series 8, Class 3A
	23,762,408		2.98			08/20/2032		24,073,221
Sequoia Mortgage Trust Sereis 9, Class 2A
	74,332,050		2.74			09/20/2032		73,871,191
Washington Mutual Series 2002-AR6, Class A
	24,012,789		2.78			06/25/2042		24,198,848
Washington Mutual Series 2002-AR7, Class A6
	12,475,410		5.53			07/25/2032		12,597,034
Washington Mutual Series 2002-AR9, Class 1A
	30,791,095		2.78			08/25/2042		30,955,212
Wells Fargo Mortgage Backed Securities Trust Series 2002-C, Class A1
	1,619,837		5.02			07/25/2032		1,633,704
							$	198,305,917
Commercial Mortgage-Backed Securities (CMBS) – 0.7%
Bear Stearns Commercial Mortgage Securities, Inc. Series 2001-TOP2, Class X2†
$	142,041,083		1.14	%		02/15/2035	$	7,031,744
GMAC Commercial Mortgage Securities, Inc. Series 1997-C1, Class A2
	2,281,380		6.85			07/15/2029		2,317,060
Salomon Brothers Mortgage Securities VII Series 2002-Key2, Class X2†
	88,598,000		2.24			03/18/2036		9,826,874
							$	19,175,678
Federal Home Loan Mortgage Corp. (FHLMC) – 4.0%
$	8,492,074		7.00	%		02/01/2009	$	9,006,113
	6,326,339		6.00			03/01/2009		6,626,453
	4,423,937		7.00			03/01/2009		4,689,392
	11,155,992		7.00			04/01/2009		11,837,181
	5,145,001		7.00			05/01/2009		5,453,723
	3,783,994		7.00			06/01/2009		4,011,050
	3,925,690		7.50			06/01/2009		4,177,192
	733,812		6.50			03/01/2013		769,774
	1,039,234		6.50			04/01/2013		1,090,164
	564,948		6.50			05/01/2013		592,635
	1,074,813		6.50			06/01/2013		1,127,486
	11,591,906		8.00			12/01/2015		12,388,850

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

 GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND

Statement of Investments (continued)

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Federal Home Loan Mortgage Corp. (FHLMC) – (continued)
$	1,792,090		6.00	%		05/01/2017	$	1,861,915
	2,994,698		7.00			04/01/2021		3,147,502
	1,287,803		7.00			08/01/2021		1,353,513
	10,317,514		7.00			03/01/2022		10,847,155
	3,778,100		7.00			05/01/2022		3,972,046
	16,670,012		7.00			06/01/2022		17,525,753
	259,263		7.00			12/01/2025		272,761
	1,628,686		7.00			12/01/2030		1,707,715
	1,309,449		7.00			01/01/2031		1,374,120
	8,698,999		6.50			03/01/2033		9,053,794
							$	112,886,287
Federal National Mortgage Association (FNMA) – 21.9%
$	8,910		6.00	%		04/01/2008	$	9,343
	652,168		6.00			08/01/2008		683,913
	501,026		6.00			09/01/2008		525,414
	161,586		6.00			10/01/2008		169,452
	2,529		6.00			11/01/2008		2,652
	217,674		6.00			12/01/2008		228,269
	457,396		6.00			01/01/2009		479,660
	3,909		6.00			02/01/2009		4,097
	853,789		6.00			05/01/2009		894,982
	14,404		6.00			12/01/2009		15,105
	3,078,464		6.00			01/01/2011		3,228,313
	6,418,207		6.00			09/01/2011		6,682,059
	7,755,168		6.00			01/01/2012		8,076,890
	2,182,722		6.50			01/01/2012		2,301,883
	19,215,789		6.00			03/01/2012		20,015,997
	11,750,245		6.00			04/01/2012		12,269,790
	4,205,393		6.50			04/01/2012		4,407,668
	34,686,148		6.00			05/01/2012		36,430,605
	1,817,049		6.50			05/01/2012		1,904,669
	42,514,683		6.00			06/01/2012		44,717,980
	2,211,601		6.50			06/01/2012		2,318,503
	20,591,806		6.00			07/01/2012		21,615,012
	82,480,643		5.50			01/01/2013		85,026,673
	1,054,407		6.00			04/01/2013		1,105,279
	24,176,960		6.00			12/01/2013		25,193,152
	3,329,891		6.00			06/01/2014		3,468,446
	7,191,645		6.00			06/01/2015		7,490,887
	7,264,955		6.00			09/01/2015		7,567,247
	5,110,925		8.00			01/01/2016		5,475,949
	17,531,266		6.50			09/01/2016		18,463,811
	1,840,839		6.00			11/01/2016		1,917,091
	5,465,218		6.50			03/01/2017		5,745,503
	1,681,910		7.00			03/01/2017		1,787,257
	14,464,605		6.00			04/01/2017		15,068,284
	1,027,067		7.00			05/01/2017		1,091,398
	20,534,747		5.50			03/01/2018		21,169,907
	2,033,460		5.50			04/01/2018		2,096,357
	6,858,593		6.00			04/01/2018		7,145,035
	1,391,093		7.00			07/01/2021		1,462,216
	1,787,960		7.00			11/01/2021		1,879,374
	1,122,924		7.00			12/01/2021		1,180,337
	1,538,628		7.00			01/01/2022		1,617,294
	327,490		7.00			02/01/2022		344,234
	1,350,443		7.00			01/01/2028		1,420,589
	27,669,028		7.00			03/01/2032		29,077,105
	38,103,010		7.00			04/01/2032		40,042,073
	13,009,523		7.00			07/01/2032		13,671,578
	3,597,403		6.50			12/01/2032		3,731,817
	84,471,316		6.50			03/01/2033		87,790,606
	1,778,515		4.88			04/01/2033		1,832,221
	32,013,559		6.50			04/01/2033		33,273,530
	15,935,950		7.00			04/01/2033		16,777,542
	3,166,679		6.50			05/01/2033		3,291,311
							$	614,186,359
Government National Mortgage Association (GNMA) – 0.0%
$	130,688		7.00	%		12/15/2025	$	139,074
	712,507		7.00			04/15/2026		758,122
							$	897,196
Collateralized Mortgage Obligations (CMOs) – 23.8%
Inverse Floater# – 0.3%
FHLMC Series 1606, Class SC
$	5,871,087		17.81	%		11/15/2008	$	6,712,234
GNMA REMIC Trust Series 2001-62, Class SB
	168,670		22.36			11/16/2027		197,560
							$	6,909,794
Inverse Floating Rate – Interest Only# – 0.0%
FNMA Series 1996-20, Class SB
$	5,177,886		14.42	%		10/25/2008	$	879,171
IOette@# – 0.0%
FNMA REMIC Trust Series 1990-145, Class B
$	4,495		4.19	%		12/25/2020	$	84,065
Planned Amortization Class (PAC) CMOs – 11.1%
FHLMC Series 1246, Class J
$	1,008,127		7.50	%		05/15/2007	$	1,053,357
FHLMC Series 1364, Class K
	1,580,832		5.00			09/15/2007		1,621,529
FHLMC Series 1377, Class H
	4,502,083		6.00			09/15/2007		4,622,594
FHLMC Series 1415, Class N
	5,287,293		6.75			11/15/2007		5,485,263
FHLMC Series 1423, Class FF
	13,211,822		7.00			12/15/2007		13,869,637
FHLMC Series 1445, Class K
	789,581		7.00			10/15/2007		804,488
FHLMC Series 1680, Class PJ
	2,804,000		6.50			02/15/2023		2,958,910
FHLMC Series 1692, Class PJ
	3,171,258		6.50			04/15/2023		3,249,494
FHLMC Series 1703, Class GA
	4,003,514		6.50			10/15/2008		4,130,265
FHLMC Series 1720, Class PJ
	7,264,919		7.25			01/15/2024		7,739,440
FHLMC Series 2078, Class PL
	3,316,524		6.25			06/15/2012		3,363,769
FHLMC Series 2113, Class TE
	7,000,000		6.00			01/15/2014		7,430,091

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

GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND 

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Planned Amortization Class (PAC) CMOs – (continued)
FHLMC Series 2128, Class PG
$	247,640		5.75	%		05/15/2011	$	247,509
FHLMC Series 2298, Class PD
	4,595,846		6.50			03/15/2030		4,697,496
FHLMC Series 2341, Class PE
	14,357,028		6.50			03/15/2030		14,549,807
FHLMC Series 2359, Class PC
	25,558,109		6.00			07/15/2015		26,198,186
FHLMC Series 2416, Class PF
	6,207,522		6.00			08/15/2018		6,305,958
FHLMC Series 2423, Class MB
	12,000,000		7.00			07/15/2030		12,338,708
FHLMC Series 2479, Class TC
	12,500,000		5.50			12/15/2014		12,964,658
FHLMC Series 2489, Class PB
	11,279,924		6.00			01/15/2026		11,338,488
FNMA REMIC Trust Series 1992-193, Class HD
	5,113,485		7.00			11/25/2007		5,390,056
FNMA REMIC Trust Series 1993-135, Class PG
	5,305,345		6.25			07/25/2008		5,571,370
FNMA REMIC Trust Series 1993-212, Class PC
	12,149,699		4.50			09/25/2008		12,399,479
FNMA REMIC Trust Series 1993-225, Class WC
	2,257,500		6.50			12/25/2013		2,403,951
FNMA Series 1994-28, Class H
	12,220,885		6.25			03/25/2023		12,470,626
FNMA Series 2001-68, Class QD
	16,820,000		5.50			07/25/2014		17,135,000
GNMA REMIC Trust Series 2001-59, Class QJ
	19,191,295		6.00			09/20/2028		19,604,649
GNMA REMIC Trust Series 2001-60, Class PK
	35,468,779		6.00			09/20/2028		36,190,320
GNMA REMIC Trust Series 2002-45, Class QC
	8,000,000		6.50			07/20/2029		8,177,661
GNMA Series 2002-1, Class PB
	25,806,923		6.00			02/20/2029		26,380,929
GNMA Series 2002-3, Class LE
	19,543,364		6.50			08/20/2030		19,988,260
							$	310,681,948
Regular Floater CMOs# – 6.3%
FHLMC Series 1509, Class F
$	8,722,311		2.13	%		04/15/2008	$	8,887,577
FHLMC Series 1606, Class FC
	21,554,082		2.85			11/15/2008		22,079,933
FHLMC Series 1612, Class FD
	2,220,561		2.85			11/15/2008		2,274,803
FHLMC Series 1661, Class FD
	25,226,917		2.63			01/15/2009		25,256,046
FHLMC Series 1665, Class FA
	2,032,000		3.73			06/15/2023		2,045,919
FHLMC Series 1826, Class F
	702,294		1.53			09/15/2021		698,768
FHLMC Series 1970, Class F
	605,419		1.48			08/15/2004		601,681
FNMA REMIC Trust Series 1993-190, Class F
	13,106,966		2.97			10/25/2008		13,178,580
FNMA REMIC Trust Series 1993-196, Class FD
	1,125,651		2.85			10/25/2008		1,131,739
FNMA REMIC Trust Series 1993-214, Class FA
	2,455,891		1.93			12/25/2008		2,485,879
FNMA REMIC Trust Series 1993-233, Class FA
	2,326,021		2.92			12/25/2008		2,401,071
FNMA REMIC Trust Series 1994-15, Class FC
	1,299,531		3.46			06/25/2023		1,303,818
FNMA REMIC Trust Series G97-1, Class F
	232,331		1.53			02/18/2004		231,928
FNMA Series 1993-231, Class FE
	5,102,081		2.03			12/25/2008		5,160,815
FNMA Series 1998-66, Class FC
	1,407,394		1.62			11/17/2028		1,414,446
FNMA Series 2002-T7, Class A1
	33,762,064		1.23			07/25/2032		33,754,943
FNMA Series 2002-W2, Class AV1
	36,904,667		1.23			06/25/2032		36,910,056
FNMA Series 2003-T3, Class 1A
	16,933,057		1.24			06/25/2033		16,933,052
							$	176,751,054
Sequential Fixed Rate CMOs – 5.6%
Asset Securitization Corp. Series 1997-D4, Class A1B
$	16,651,900		7.40	%		04/14/2029	$	16,805,623
CS First Boston Mortgage Securities Corp. Series 2003-1, Class 3A1
	15,350,817		6.00			01/25/2033		15,405,986
FHLMC Series 1216, Class GC
	4,616,398		7.00			03/15/2007		4,804,589
FHLMC Series 1852, Class PA
	2,510,115		8.07			11/15/2021		2,512,104
FHLMC Series 2006, Class K
	2,765,370		6.50			05/15/2012		2,819,967
FHLMC Series 2054, Class VB
	2,411,456		6.50			12/15/2015		2,425,660
FHLMC Series 2059, Class A
	1,067,104		6.00			09/15/2026		1,066,486
FHLMC Series 2125, Class JB
	3,387,254		6.00			10/15/2026		3,410,874
FHLMC Series 2145, Class KA
	6,095,262		6.35			09/15/2026		6,141,739
FHLMC Series 2196, Class VB
	707,365		7.00			03/15/2015		707,000
FHLMC Series 2282, Class VB
	11,155,000		6.00			06/15/2014		11,430,216
FHLMC Series 2427, Class EB
	23,470,411		6.00			06/15/2016		24,134,494
FHLMC Series 2448, Class AV
	10,934,580		6.50			09/15/2013		11,457,416
FHLMC Series 26, Class C
	2,100,687		6.50			07/25/2018		2,104,862
First Horizon Asset Securities, Inc. Series 2003-1, Class 1A6
	4,127,567		6.00			03/25/2033		4,173,386

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

Statement of Investments (continued)

October 31, 2003

 GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Sequential Fixed Rate CMOs – (continued)
First Nationwide Trust Series 1999-4, Class 3PA1
$	14,868,714		6.50	%		10/19/2029	$	15,225,241
First Nationwide Trust Series 2001-4, Class 1A1
	12,969,676		6.75			09/21/2031		13,106,422
FNMA REMIC Trust Series 1993-14, Class A
	353,792		6.00			02/25/2008		365,074
FNMA REMIC Trust Series 1993-35, Class H
	1,661,734		6.75			02/25/2008		1,721,860
GNMA Series 2001-35, Class A
	327,453		6.50			03/20/2029		329,323
Master Asset Securitization Trust Series 2002-80, Class 2A1
	4,486,593		6.00			12/25/2032		4,482,231
Residential Funding Mortgage Sec I Series 1993-S12, Class A12
	4,443,800		7.50			03/25/2023		4,438,636
Residential Funding Mortgage Sec I Series 2002-S9, Class A5
	293,818		6.00			07/25/2017		297,578
Washington Mutual MSC Mortgage Pass-Thru Series 2003-MS3, Class 1A1
	7,420,269		5.75			03/25/2033		7,490,644
							$	156,857,411
Support – 0.5%
FHLMC Series 1639, Class M
$	6,876,346		6.00	%		12/15/2008	$	7,118,875
FNMA REMIC Trust Series 1996-14, Class J
	1,454,522		6.15			03/25/2009		1,520,116
Housing Securities, Inc. Series 1994-1, Class A13
	5,595,811		6.50			03/25/2009		5,671,362
							$	14,310,353
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)							$	666,473,796
TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $2,248,584,201)							$	2,235,719,932
Agency Debentures – 8.2%
Federal Home Loan Bank
$	30,000,000		4.30	%		12/04/2006	$	31,339,050
	8,000,000		5.20			05/23/2007		8,458,272
	24,000,000		3.98			11/07/2008		24,006,744
	38,925,000		8.05	^		06/01/2010		42,342,615
	5,000,000		6.20			01/26/2011		5,048,845
Federal Home Loan Mortgage Corp
	70,000,000		4.75			05/26/2006		71,310,375
	15,000,000		4.00			08/02/2006		15,293,310
	22,100,000		5.00			07/30/2009		22,659,569
Federal National Mortgage Association
	9,350,000		5.00			03/21/2007		9,734,804
TOTAL AGENCY DEBENTURES
(Cost $229,644,641)							$	230,193,584
Asset-Backed Securities – 5.2%
Auto – 4.6%
AmeriCredit Automobile Receivable Trust Series 2002-A, Class A4
$	7,035,000		4.61	%		01/12/2009	$	7,305,455
Capital One Auto Investment LLC Series 2000-B, Class A4†
	12,000,000		6.78			10/15/2007		12,427,500
Daimler Chrysler Auto Trust Series 2000-B, Class A4
	20,593,445		7.63			06/08/2005		20,929,596
Duck Auto Grantor Trust Series 2002-B, Class A†§
	33,626,449		0.00/2.99			07/15/2007		33,847,123
Household Automotive Trust Series 1999-1, Class A4
	3,904,337		6.65			04/17/2006		3,913,215
Long Beach Auto Receivable Trust Series 2001-B, Class A4†
	32,500,000		4.60			10/13/2008		33,779,688
Onyx Acceptance Grantor Trust Series 2000-B, Class A4
	4,896,174		7.38			08/15/2005		4,941,544
Union Acceptance Corp. Series 2000-B, Class A4§
	11,310,628		0.00/7.54			10/10/2006		11,637,236
							$	128,781,357
Home Equity – 0.6%
Indy Mac Home Equity Loan Asset-Backed Trust Series 2002-B, Class AV#
$	17,866,620		1.57	%		10/25/2033	$	17,905,712
TOTAL ASSET-BACKED SECURITIES
(Cost $147,566,047)							$	146,687,069
U.S. Treasury Obligations – 1.1%
United States Treasury Principal-Only Stripped Securities•
$	25,000,000		0.00	%		05/15/2011	$	23,486,725
	8,090,000		0.00			02/15/2010		7,915,135
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $31,682,607)							$	31,401,860
Repurchase Agreement – 6.0%
Joint Repurchase Agreement Account IIΔ
$	166,500,000		1.06	%		11/03/2003	$	166,500,000
Maturity Value: $166,514,708
TOTAL REPURCHASE AGREEMENT
(Cost $166,500,000)							$	166,500,000
TOTAL INVESTMENTS
(Cost $2,823,977,496)							$	2,810,502,445

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

GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND 

#	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2003.
@	Represents security with notional or nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.
§	These securities are issued with a zero coupon which increases to the stated rate at a set date in the future.
†	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounted to $96,912,929; which represents 3.5% of net assets as of October 31, 2003.
^	A portion of this security is segregated as collateral for initial margin requirement on futures transactions.
Δ	Joint repurchase agreement was entered into on October 31, 2003.
•	Security issued with a zero coupon. Income is recognized through the accretion of discount.

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

Investment Abbreviations:
REMIC	—	Real Estate Mortgage Investment Conduit

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

 GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND

Performance Summary

October 31, 2003

The following graph shows the value, as of October 31, 2003, of a $10,000 investment made on September 1, 1988 in the Institutional shares of the Goldman Sachs Short Duration Government Fund. For comparative purposes, the performance of the Fund’s benchmark, the Two-Year U.S. Treasury Note Index (“Two-Year T-Note Index”), as well as the Lehman Brothers Mutual Fund Short (1-3) U.S. Government Index (“Lehman Short (1-3) Gov’t 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. 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 investment selection and allocation, other factors may affect portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Short Duration Government Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested September 1, 1988 to October 31, 2003.^(a)

Average Annual Total Return through October 31, 2003	Since Inception		Ten Years		Five Years		One Year
Class A (commenced May 1, 1997)
Excluding sales charges		5.72%		n/a		5.33%		2.11%
Including sales charges		5.40%		n/a		4.91%		0.04%
Class B (commenced May 1, 1997)
Excluding contingent deferred sales charges		5.09%		n/a		4.70%		1.41%
Including contingent deferred sales charges		5.09%		n/a		4.70%		-0.62%
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges		4.74%		n/a		4.51%		1.26%
Including contingent deferred sales charges		4.74%		n/a		4.51%		0.25%
Institutional Class (commenced August 15, 1988)		6.70%		5.89%		5.72%		2.43%
Service Class (commenced April 10, 1996)		5.70%		n/a		5.20%		1.92%

(a)  For comparative purposes, initial investment is assumed to be made on the first day of the month following commencement of operations.

32

GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND 

Statement of Investments

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – 59.4%
Adjustable Rate Federal Home Loan Mortgage Corp. (FHLMC)# – 0.5%
$	335,910		3.00	%		08/01/2017	$	342,551
	446,400		5.34	^		05/01/2018		447,172
	1,324,223		3.90			06/01/2018		1,368,836
	369,878		3.51			12/01/2018		378,031
	1,359,956		3.85			02/01/2022		1,406,481
	412,173		5.99			10/01/2025		422,384
							$	4,365,455
Adjustable Rate Federal National Mortgage Association (FNMA)# – 6.8%
$	546,608		3.34	%		11/01/2014	$	560,907
	1,019,040		3.22			11/01/2017		1,043,270
	1,348,222		5.99			02/01/2018		1,375,935
	609,848		2.05			02/25/2018		533,517
	761,608		3.11			06/01/2018		774,436
	972,435		3.65			03/01/2019		993,338
	1,467,108		5.74			05/01/2020		1,525,572
	1,173,920		4.23			12/01/2020		1,206,793
	1,342,075		3.66			01/01/2021		1,374,623
	708,510		6.11			01/01/2023		725,794
	537,453		5.14			07/01/2028		556,531
	1,814,299		5.67			07/01/2032		1,853,332
	1,326,053		5.75			07/01/2032		1,366,161
	3,595,773		5.37			01/01/2033		3,666,955
	7,724,307		5.28			02/01/2033		7,960,055
	9,500,910		4.47			05/01/2033		9,652,255
	6,751,830		4.17			04/01/2034		6,880,309
	2,765,407		4.74			08/01/2035		2,820,195
	5,908,766		4.75			08/01/2035		6,025,829
	11,500,121		4.70			07/01/2036		11,728,537
							$	62,624,344
Federal Home Loan Mortgage Corp. (FHLMC) – 9.4%
$	14,401,809		7.20	%		10/01/2006	$	15,984,185
	111,566		7.00			01/01/2009		118,260
	196,206		7.00			02/01/2009		207,979
	78,366		7.00			03/01/2009		83,069
	246,949		7.00			04/01/2009		261,767
	134,954		7.00			05/01/2009		143,052
	15,603		6.50			05/01/2010		16,466
	94,749		6.50			06/01/2010		99,700
	2,322,610		6.50			07/01/2010		2,445,056
	345,901		7.00			07/01/2010		366,712
	381,307		6.50			08/01/2010		402,070
	503,978		7.00			01/01/2011		534,751
	7,873,441		6.00			10/01/2012		8,196,051
	164,824		7.00			12/01/2012		174,741
	161,749		6.00			01/01/2013		168,385
	573,759		6.50			01/01/2013		601,878
	83,164		6.00			02/01/2013		86,572
	8,534,113		5.00			04/01/2013		8,677,611
	213,257		6.00			04/01/2013		222,005
	383,431		6.50			04/01/2013		402,221
	657,060		6.50			05/01/2013		689,261
	265,601		6.50			06/01/2013		278,617
	280,049		6.50			10/01/2013		293,773
	4,144,800		6.00			11/01/2013		4,314,828
	73,966		6.00			12/01/2013		77,001
	5,949,930		6.00			03/01/2014		6,190,429
	2,166,626		6.00			06/01/2014		2,254,202
	200,707		6.00			10/01/2014		208,820
	18,300,235		6.00			12/01/2014		19,039,939
	625,229		8.50			10/01/2015		684,772
	4,011,040		8.00			12/01/2015		4,286,799
	162,350		7.00			03/01/2016		171,959
	8,348,933		7.00			04/01/2022		8,777,518
	144,012		7.50			01/01/2031		153,161
							$	86,613,610
Federal National Mortgage Association (FNMA) – 19.0%
$	12,650		7.00	%		11/01/2007	$	13,460
	256,321		7.00			12/01/2007		272,750
	6,446		7.00			05/01/2008		6,859
	45,473		7.00			08/01/2008		48,388
	1,750,002		7.00			09/01/2008		1,862,171
	1,399,330		6.00			12/01/2008		1,467,444
	345,199		6.00			01/01/2009		361,928
	36,929		6.00			05/01/2009		38,710
	655,336		6.00			06/01/2009		687,236
	638,156		6.00			09/01/2009		668,945
	43,984		7.00			12/01/2009		46,803
	247,661		8.50			05/01/2010		269,058
	2,957		7.00			06/01/2010		3,146
	5,683		6.00			08/01/2010		5,938
	14,691		7.00			08/01/2010		15,622
	8,418		6.00			11/01/2010		8,796
	23,187		6.00			01/01/2011		24,227
	13,808		7.00			01/01/2011		14,694
	48,235		6.00			02/01/2011		50,399
	1,162,720		6.00			03/01/2011		1,214,878
	414,242		6.00			04/01/2011		432,825
	555,385		6.00			05/01/2011		580,299
	50,221		6.00			06/01/2011		52,474
	84,489		6.00			07/01/2011		88,279
	191,648		7.00			07/01/2011		203,689
	162,130		6.00			09/01/2011		169,403
	3,506,737		6.00			10/01/2011		3,702,228
	5,888		7.00			11/01/2011		6,258
	9,611		6.00			12/01/2011		10,042
	12,534		6.00			01/01/2012		13,061
	95,512		6.00			03/01/2012		99,527
	35,170,227		5.50			01/01/2013		36,255,153
	110,055		6.00			04/01/2013		114,686
	154,209		6.00			11/01/2013		160,699
	7,651,521		6.00			12/01/2013		7,973,550
	175,028		6.00			01/01/2014		181,629
	108,462		5.50			02/01/2014		110,954
	546,047		6.00			03/01/2014		566,642
	73,879		5.50			04/01/2014		75,577
	4,355,730		6.00			07/01/2014		4,536,970
	1,407,737		6.50			12/01/2014		1,480,171
	22,019,143		6.00			06/01/2015		22,935,351
	12,108,258		6.00			09/01/2015		12,612,078
	106,668		8.50			09/01/2015		117,739

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

 GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND

Statement of Investments (continued)

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Federal National Mortgage Association (FNMA) – (continued)
$	609,383		8.50	%		10/01/2015	$	672,629
	149,300		8.50			12/01/2015		164,787
	1,585,163		6.50			09/01/2016		1,669,483
	15,051,116		5.50			06/01/2018		15,516,663
	401,822		7.00			11/01/2019		421,998
	7,660,884		6.50			08/01/2022		7,971,933
	4,679,929		6.50			11/01/2022		4,867,393
	583,381		8.00			02/01/2031		631,214
	9,072,145		7.00			04/01/2032		9,533,827
	785,239		6.50			07/01/2032		819,518
	14,757,782		6.50			03/01/2033		15,338,610
	16,915,223		6.50			04/01/2033		17,580,962
							$	174,749,753
Government National Mortgage Association (GNMA) – 0.2%
$	306,435		6.50	%		06/15/2008	$	324,525
	150,069		6.50			07/15/2008		158,929
	535,522		6.50			08/15/2008		567,136
	244,650		6.50			09/15/2008		259,093
	53,765		6.50			10/15/2008		56,939
	15,252		6.50			11/15/2008		16,152
	34,520		9.00			12/15/2008		37,948
	33,447		6.50			01/15/2009		35,428
	77,569		9.00			01/15/2009		85,671
	4,088		6.50			03/15/2009		4,329
	32,813		6.50			04/15/2009		34,757
	220,696		6.50			05/15/2009		233,772
	24,861		6.50			07/15/2009		26,334
	31,098		6.50			11/15/2009		32,940
	11,216		9.00			01/15/2010		12,438
	162,248		9.00			07/15/2012		181,002
							$	2,067,393
Collateralized Mortgage Obligations (CMOs) – 23.5%
Inverse Floater# – 0.1%
FHLMC Series 1693, Class S
$	3,484		14.85	%		09/15/2008	$	3,540
FNMA REMIC Trust Series 1990-134, Class SC
	219,874		19.91			11/25/2020		266,979
FNMA REMIC Trust Series 1993-231, Class SA
	424,649		19.13			12/25/2008		481,661
GNMA REMIC Trust 2001-59, Class SA
	65,551		22.69			11/16/2024		77,773
GNMA REMIC Trust 2001-62, Class SB
	108,059		22.36			11/16/2027		126,568
							$	956,521
IOette@# – 0.0%
FHLMC Series 1161, Class U
$	5,226		1172.81	%		11/15/2021	$	23,196
Planned Amortization Class (PAC) CMOs – 17.1%
FHLMC Series 1377, Class H
$	10,598,420		6.00	%		09/15/2007	$	10,882,115
FHLMC Series 1415, Class N
	1,718,370		6.75			11/15/2007		1,782,711
FHLMC Series 1429, Class G
	2,593,047		7.00			11/15/2007		2,717,582
FHLMC Series 1445, Class K
	473,749		7.00			10/15/2007		482,693
FHLMC Series 1475, Class K
	2,834,578		7.00			02/15/2008		2,980,679
FHLMC Series 1556, Class H
	2,063,000		6.50			08/15/2013		2,182,410
FHLMC Series 1564, Class H
	7,306,362		6.50			08/15/2008		7,681,018
FHLMC Series 1580, Class D
	1,398,600		6.50			01/15/2007		1,412,712
FHLMC Series 1601, Class PL
	3,945,912		6.00			10/15/2008		4,126,555
FHLMC Series 1606, Class H
	6,374,893		6.00			11/15/2008		6,706,306
FHLMC Series 1697, Class PJ
	4,137,880		6.00			07/15/2008		4,227,205
FHLMC Series 1703, Class GB
	13,396,738		6.50			02/15/2009		14,378,797
FHLMC Series 1916, Class PC
	3,700,000		6.75			12/15/2011		4,081,578
FHLMC Series 2470, Class QD
	3,000,000		6.00			07/15/2028		3,035,941
FNMA REMIC Trust 1992-145, Class ZA
	602,528		8.00			09/25/2019		607,780
FNMA REMIC Trust 1993-126, Class PG
	7,285,291		6.50			07/25/2008		7,713,169
FNMA REMIC Trust 1993-28, Class PJ
	3,536,088		7.00			03/25/2008		3,703,685
FNMA REMIC Trust Series 1992-142, Class K
	4,000,000		7.00			08/25/2007		4,269,475
FNMA REMIC Trust Series 1993-209, Class H
	2,675,454		6.00			03/25/2008		2,727,050
FNMA REMIC Trust Series 1993-76, Class PH
	2,430,392		6.00			08/25/2007		2,461,863
FNMA REMIC Trust Series 1993-114, Class G
	3,774,505		6.50			11/25/2007		3,811,094
FNMA Series 1993-118, Class J
	4,000,000		6.50			06/25/2008		4,194,343
FNMA Series 1993-135, Class PG
	6,063,252		6.25			07/25/2008		6,367,280
FNMA Series 1993-207, Class G
	7,749,546		6.15			04/25/2023		7,981,035
FNMA Series 1993-52, Class J
	2,500,000		6.50			04/25/2008		2,660,006
FNMA Series 1994-23, Class PE
	2,820,682		6.00			08/25/2022		2,879,009
FNMA Series 1994-86, Class PH
	9,413,415		6.00			10/25/2008		9,639,598
FNMA Series 2002-16, Class PK
	3,000,000		6.50			10/25/2030		3,164,230
FNMA Series 2002-22, Class VB
	2,883,808		6.50			08/25/2009		3,057,965
FNMA Series 2002-9, Class PB
	4,994,437		6.00			11/25/2014		5,085,780
FNMA Trust Series 1993-55, Class J
	3,821,273		6.50			11/25/2007		3,887,827

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

GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND 

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Planned Amortization Class (PAC) CMOs – (continued)
GNMA REMIC Trust 2000-10, Class UD
$	654,030		7.63	%		05/16/2029	$	676,361
GNMA REMIC Trust Series 2002-45, Class QD
	10,000,000		6.50			06/20/2031		10,461,390
GNMA Series 2001-59, Class QJ
	5,117,679		6.00			09/20/2028		5,227,906
							$	157,255,148
Planned Amortization — Interest Only@ – 0.0%
FHLMC Series 1587, Class HA
$	513,182		6.50	%		10/15/2008	$	50,938
Principal Only – 0.1%
FNMA REMIC Trust Series G92-28, Class A•
$	404,802		0.00	%		05/25/2007	$	395,860
Sequential Fixed Rate CMOs – 5.6%
FHLMC Series 108, Class G
$	2,069,236		8.50	%		12/15/2020	$	2,121,255
FHLMC Series 1327, Class HA
	2,458,163		7.50			07/15/2007		2,566,846
FHLMC Series 1980, Class Z
	7,676,105		7.00			07/15/2027		8,206,996
FHLMC Series 2019, Class Z
	5,838,289		6.50			12/15/2027		6,240,113
FHLMC Series 2100, Class GS
	4,000,000		6.50			12/15/2013		4,297,312
FHLMC Series 2145, Class KA
	1,351,160		6.35			09/15/2026		1,361,463
FHLMC Series 2152, Class AB
	774,736		6.25			01/15/2026		785,474
FHLMC Series 2651, Class VB
	13,495,056		5.50			03/15/2014		14,097,228
FNMA REMIC Trust 1989-66, Class J
	2,366,557		7.00			09/25/2019		2,552,186
FNMA REMIC Trust 1993-10, Class PH
	1,423,943		6.50			12/25/2007		1,471,501
FNMA REMIC Trust Series 1990-16, Class E
	1,928,856		9.00			03/25/2020		2,104,305
FNMA REMIC Trust Series 1992-33, Class K
	2,108,679		8.50			03/25/2018		2,422,680
FNMA Series 1988-12, Class A
	772,474		6.72			02/25/2018		844,128
FNMA Series 1992-171, Class ZD
	1,624,743		8.00			06/25/2021		1,644,796
GNMA REMIC Trust Series 1995-3, Class DQ
	323,166		8.05			06/16/2025		343,683
							$	51,059,966
Target Amortization Class (TAC) – 0.6%
FNMA REMIC Trust Series 1994-18, Class D
$	5,333,333		6.75	%		02/25/2024	$	5,690,786
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)							$	215,432,415
TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $549,584,028)							$	545,852,970
Agency Debentures – 28.8%
Federal Farm Credit Bank
$	10,000,000		4.90	%		03/21/2006	$	10,597,970
	2,000,000		5.40			05/10/2006		2,146,822
	12,500,000		6.60			07/07/2006		13,834,725
Federal Home Loan Bank
	13,700,000		3.95			02/14/2005		14,147,653
	7,000,000		6.50			11/15/2005		7,585,410
	10,000,000		5.38			02/15/2006		10,657,300
	12,000,000		5.13			03/06/2006		12,765,960
	3,000,000		5.38			05/15/2006		3,212,550
	9,000,000		2.50			05/19/2006		9,012,663
	15,000,000		3.59			10/22/2007		15,145,035
	7,000,000		3.79			11/28/2008		6,924,365
Federal Home Loan Mortgage Corp.
	8,000,000		2.05			01/28/2005		8,010,466
	12,000,000		3.50			08/16/2005		12,207,384
	18,900,000		2.13			11/15/2005		18,896,522
	40,100,000		5.25	^		01/15/2006		42,677,629
	5,000,000		4.00	#		05/25/2006		5,073,625
	9,500,000		2.00			06/30/2006		9,312,225
	6,000,000		4.00			08/02/2006		6,117,324
	8,000,000		3.16			05/07/2007		8,075,968
	5,000,000		3.50			04/15/2008		5,017,055
	9,000,000		5.00			07/30/2009		9,227,879
Federal National Mortgage Association
	5,000,000		3.75			07/29/2005		5,081,400
	4,000,000		5.50			02/15/2006		4,286,440
	3,000,000		3.51			08/23/2006		3,035,034
	8,000,000		5.42			04/04/2007		8,380,847
	8,565,000		3.75			04/09/2008		8,634,300
Small Business Administration
	864,565		7.20			06/01/2017		952,073
	1,329,806		6.30			05/01/2018		1,428,112
	1,667,238		6.30			06/01/2018		1,790,079
TOTAL AGENCY DEBENTURES
(Cost $263,128,936)							$	264,234,815
U.S. Treasury Obligations – 6.7%
United States Treasury Interest-Only Stripped Securities@
$	14,000,000		0.00	%		02/15/2014	$	8,630,860
United States Treasury Principal-Only Stripped Securities•
	30,000,000		0.00			05/15/2011		28,184,070
United States Treasury Notes
	5,000,000		1.63			09/30/2005		4,984,765
	20,000,000		1.63			10/31/2005		19,921,875
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $61,573,715)							$	61,721,570

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

 GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND

Statement of Investments (continued)

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Repurchase Agreement – 5.5%
Joint Repurchase Agreement Account IIΔ
$	50,900,000		1.06	%		11/03/2003	$	50,900,000
Maturity Value: $50,904,496
TOTAL REPURCHASE AGREEMENT
(Cost $50,900,000)							$	50,900,000
TOTAL INVESTMENTS
(Cost $925,186,679)							$	922,709,355

#	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2003.
@	Represents security with notional or nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.
^	A portion of this security is segregated as collateral for initial margin requirement on futures transactions.
Δ	Joint repurchase agreement was entered into on October 31, 2003.
•	Security issued with a zero coupon. Income is recognized through the accretion of discount.

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

Investment Abbreviations:
REMIC	—	Real Estate Mortgage Investment Conduit

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

GOLDMAN SACHS GOVERNMENT INCOME FUND 

Performance Summary

October 31, 2003

The following graph shows the value, as of October 31, 2003, of a $10,000 investment made on March 1, 1993 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 Mutual Fund Government/Mortgage Index (“Lehman Gov’t/MBS Index”), as well as the Lehman Brothers Mutual Fund General U.S. Government Index (“Lehman U.S. Gov’t 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. 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 portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Government Income Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested March 1, 1993 to October 31, 2003.^(a)

Average Annual Total Return through October 31, 2003	Since Inception		Ten Years		Five Years		One Year
Class A (commenced February 10, 1993)
Excluding sales charges		6.70%		6.38%		5.84%		3.11%
Including sales charges		6.24%		5.89%		4.88%		-1.50%
Class B (commenced May 1, 1996)
Excluding contingent deferred sales charges		6.15%		n/a		5.04%		2.34%
Including contingent deferred sales charges		6.15%		n/a		4.62%		-2.78%
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges		5.81%		n/a		5.04%		2.34%
Including contingent deferred sales charges		5.81%		n/a		5.04%		1.32%
Institutional Class (commenced August 15, 1997)		7.00%		n/a		6.25%		3.60%
Service Class (commenced August 15, 1997)		6.47%		n/a		5.75%		3.01%

(a)  For comparative purposes, initial investment is assumed to be made on the first day of the month following commencement of operations.

37

 GOLDMAN SACHS GOVERNMENT INCOME FUND

Statement of Investments

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – 62.7%
Adjustable Rate Federal National Mortgage Association (FNMA)# – 2.7%
$	440,006		4.91	%		02/01/2033	$	451,600
	759,255		4.50			03/01/2033		778,501
	4,822,736		4.13			04/01/2034		4,914,506
	5,064,657		4.71			08/01/2035		5,164,996
	4,758,671		4.66			07/01/2036		4,853,188
							$	16,162,791
Adjustable Rate Non-Agency# – 8.2%
Bank of America Mortgage Securities Series 2003-E, Class 2A2
$	2,478,309		4.35	%		06/25/2033	$	2,481,170
Bank of America Mortgage Securities Series 2003-H, Class 2A3
	6,952,199		4.43			09/25/2033		6,983,036
CS First Boston Mortgage Securities Corp. Series 2003-AR9, Class 2A2
	3,428,339		5.10			03/25/2033		3,485,780
Structured Asset Securities Corp. Series 2003-24A, Class 1A3
	3,037,458		5.00			07/25/2033		3,077,796
Structured Asset Securities Corp. Series 2003-34A, Class 3A3
	5,897,370		4.70			11/25/2033		5,955,422
Washington Mutual Series 2002-AR18, Class A
	9,411,463		4.19			01/25/2033		9,512,001
Washington Mutual Series 2002-AR6, Class A
	4,861,012		2.78			06/25/2042		4,898,676
Washington Mutual Series 2002-AR9, Class 1A
	4,827,637		2.78			08/25/2042		4,853,368
Washington Mutual Series 2003-AR6, Class A1
	5,055,524		4.39			06/25/2033		5,052,078
Washington Mutual Series 2003-AR8, Class A#
	1,916,126		4.03			08/25/2033		1,901,684
							$	48,201,011
Commercial Mortgage-Backed Securities (CMBS) – 1.2%
CS First Boston Mortgage Securities Corp. Series 1997-C2, Class A3
$	600,000		6.55	%		01/17/2035	$	655,351
First Union National Bank Commercial Mortgage Trust Series 2000-C2, Class A2
	1,800,000		7.20			10/15/2032		2,078,027
First Union-Lehman Brothers Commercial Mortgage Services Series 1997-C1, Class A2
	210,010		7.30			04/18/2029		213,635
First Union-Lehman Brothers-Bank of America Series 1998-C2, Class A2
	1,500,000		6.56			11/18/2035		1,672,682
LB Commercial Conduit Mortgage Trust Series 1998-C4, Class A1B
	2,000,000		6.21			10/15/2035		2,198,261
							$	6,817,956
Federal Home Loan Mortgage Corp. (FHLMC) – 13.8%
$	8,234,888		5.50	%		12/01/2008	$	8,432,609
	662,199		7.00			06/01/2009		701,934
	544,645		6.50			08/01/2010		574,885
	5,303,516		6.00			12/01/2013		5,521,077
	4,285,695		6.50			12/01/2013		4,495,726
	112,610		6.50			02/01/2014		118,129
	55,672		7.00			02/01/2015		58,868
	5,999,099		5.50			07/01/2015		6,205,043
	779,766		8.00			07/01/2015		828,658
	152,403		7.00			01/01/2016		161,152
	175,326		7.00			02/01/2016		185,702
	2,472,512		5.50			05/01/2018		2,549,911
	6,832,568		5.50			06/01/2018		7,046,452
	3,553,106		6.50			10/01/2021		3,695,225
	4,056,251		6.50			12/01/2021		4,218,496
	2,654,086		6.00			11/01/2022		2,738,503
	2,829,044		6.00			02/01/2023		2,919,026
	506,407		7.50			03/01/2027		539,971
	6,132,682		6.50			07/01/2028		6,388,937
	47,983		8.00			07/01/2030		51,431
	145,509		7.50			12/01/2030		154,754
	80,552		7.50			01/01/2031		85,670
	5,504,456		7.00			04/01/2032		5,779,890
	3,188,361		6.00			05/01/2033		3,274,059
	14,000,000		5.00			TBA-30yrα		14,214,368
							$	80,940,476
Federal National Mortgage Association (FNMA) – 24.4%
$	2,547,749		6.50	%		09/01/2008	$	2,695,267
	7,584,143		6.31			12/01/2008		8,334,267
	2,987,722		5.50			05/01/2009		3,057,670
	6,498,229		6.00			09/01/2013		6,771,720
	2,852,982		6.00			06/01/2014		2,971,694
	12,326,228		5.50			09/01/2014		12,744,690
	264,675		7.00			03/01/2015		280,619
	153,030		8.00			01/01/2016		162,556
	528,388		6.50			09/01/2016		556,494
	1,784,496		6.00			03/01/2017		1,858,860
	2,985,517		5.00			09/01/2018		3,036,161
	12,698,519		5.00			10/01/2018		12,913,927
	1,205,867		6.50			01/01/2022		1,255,956
	9,752,669		6.50			04/01/2022		10,156,546
	7,200,532		6.50			08/01/2022		7,494,610
	3,275,950		6.50			11/01/2022		3,407,175
	2,011,398		6.50			12/01/2022		2,094,947
	1,332,648		6.00			02/01/2023		1,375,335
	7,440,417		6.00			03/01/2023		7,684,751
	1,629,555		6.00			05/01/2023		1,683,067
	52,830		6.50			08/01/2025		54,836
	72,672		6.50			09/01/2025		75,432
	72,596		6.50			10/01/2025		75,353
	114,854		6.50			11/01/2025		119,216
	50,592		6.50			12/01/2025		52,513
	2,782		6.50			05/01/2026		2,888
	16,744		6.50			06/01/2028		17,417
	418,052		6.50			11/01/2028		434,865
	127,870		7.50			05/01/2029		135,745
	78,369		7.50			07/01/2029		83,195
	15,922		7.50			08/01/2029		16,902
	35,680		7.50			10/01/2029		37,878
	1,189		7.50			01/01/2030		1,262
	28,846		7.50			02/01/2030		30,605

38       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)
Federal National Mortgage Association (FNMA) – (continued)
$	2,643,094		7.00	%		07/01/2031	$	2,795,016
	618,135		6.50			09/01/2031		644,604
	607,735		6.50			10/01/2031		633,809
	592,779		6.50			11/01/2031		618,261
	742,911		6.50			02/01/2032		775,032
	785,239		6.50			07/01/2032		819,518
	1,951,428		7.00			07/01/2032		2,050,737
	9,645,175		6.50			11/01/2032		10,005,558
	4,277,681		6.50			04/01/2033		4,446,040
	880,845		6.00			05/01/2033		905,106
	819,704		6.50			05/01/2033		851,965
	889,332		6.00			06/01/2033		913,827
	6,231,722		6.50			08/01/2033		6,476,987
	19,000,000		6.50			TBA-30yr/		19,736,250
							$	143,347,129
Government National Mortgage Association (GNMA) – 3.7%
$	142,729		6.50	%		12/15/2026	$	149,977
	5,741,758		6.50			01/20/2032		5,984,969
	2,509,938		6.50			04/20/2032		2,617,695
	1,278,448		6.50			09/20/2032		1,333,334
	10,236,200		6.50			10/20/2032		10,675,664
	852,465		6.50			08/20/2033		889,927
							$	21,651,566
Collateralized Mortgage Obligations (CMOs) – 8.7%
Interest Only@ – 0.2%
Bear Stearns Asset Backed Securities Series 2003-AC2, Class AI0
$	5,250,000		5.00	%		10/25/2005	$	404,775
Countrywide Home Loan Series 2003-42, Class 2X1#
	2,269,867		0.39			10/25/2033		16,493
CS First Boston Mortgage Securities Corp. Series 2003-AR18, Class 2X#
	1,166,481		0.78			07/25/2033		12,987
CS First Boston Mortgage Securities Corp. Series 2003-AR20, Class 2X#
	1,269,672		0.60			08/25/2033		15,121
FNMA Interest-Only Stripped Security Series 151, Class 2
	76,232		9.50			07/25/2022		16,430
Master Adjustable Rate Mortgage Trust Series 2003-2, Class 3AX#
	294,621		0.68			08/25/2033		4,723
Master Adjustable Rate Mortgage Trust Series 2003-2, Class 4AX#
	178,729		1.17			07/25/2033		4,482
Saxon Asset Securities Trust Series 2003-2, Class AIO
	9,688,312		4.75			01/25/2005		443,783
Structured Asset Securities Corp. Series 2003-AM1, Class AIO
	8,888,906		6.00			04/25/2004		249,600
Washington Mutual Series 2003-AR7, Class X#
	3,585,083		0.99			06/25/2008		38,994
							$	1,207,388
Inverse Floater# – 0.5%
FNMA REMIC Trust Series 1993-231, Class SA
$	318,487		19.13	%		12/25/2008	$	361,246
GNMA Series 2001-48, Class SA
	266,441		22.85			10/16/2031		319,672
GNMA Series 2001-51, Class SA
	212,676		27.65			10/16/2031		269,439
GNMA Series 2001-51, Class SB
	266,888		22.85			10/16/2031		326,066
GNMA Series 2001-59, Class SA
	233,156		22.69			11/16/2024		276,629
GNMA Series 2001-62, Class SB
	236,207		22.36			11/16/2027		276,665
GNMA Series 2002-13, Class SB
	977,385		32.34			02/16/2032		1,292,575
							$	3,122,292
Inverse Floating Rate – Interest Only# – 0.0%
Salomon Brothers Mortgage Securities VII Series 1996-6E, Class A2
$	1,641,184		7.98	%		11/28/2003	$	69,520
Planned Amortization Class (PAC) CMOs – 4.9%
FHLMC Series 2407, Class DG
$	6,000,000		6.00	%		09/15/2027	$	6,084,086
FNMA REMIC Trust Series 1993-78, Class H
	150,000		6.50			06/25/2008		160,299
FNMA Series 2001-70, Class LN
	6,200,000		6.25			06/25/2030		6,415,997
FNMA Series 2002-9, Class PB
	3,228,159		6.00			11/25/2014		3,287,198
GNMA Series 2000-10, Class UD
	373,732		7.63			05/16/2029		386,492
GNMA Series 2001-59, Class QJ
	4,094,143		6.00			09/20/2028		4,182,325
GNMA Series 2001-61, Class EA
	7,807,225		6.00			09/16/2028		7,974,342
							$	28,490,739
Principal Only – 0.0%
FNMA REMIC Trust Series G-35, Class N •
$	64,644		0.00	%		10/25/2021	$	57,248
Regular Floater CMOs# – 0.1%
FHLMC Series 1760, Class ZB
$	857,925		3.63	%		05/15/2024	$	870,099
Sequential Fixed Rate CMOs – 3.0%
Citicorp Mortgage Securities, Inc. Series 1993-11, Class A6
$	73,444		6.25	%		09/25/2008	$	73,643
First Nationwide Trust Series 1999-5, Class 1PA1
	1,602,278		7.00			01/19/2030		1,655,163
FNMA Series 2001-46, Class G
	2,566,740		6.00			07/25/2029		2,607,622
FNMA Series 2001-53, Class GH
	2,739,003		8.00			09/25/2016		2,995,684
FNMA Series 2002-62, Class ED
	1,852,054		5.50			04/25/2016		1,892,686

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

39

Statement of Investments (continued)

October 31, 2003

 GOLDMAN SACHS GOVERNMENT INCOME FUND

Principal			Interest			Maturity
Amount			Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Sequential Fixed Rate CMOs – (continued)
X FNMA Series 2003-10, Class HW
$	2,341,372			5.00	%		11/25/2016	$	2,399,422
FNMA Series 2003-27, Class A
	3,928,237			7.50			04/25/2018		4,256,765
GNMA Series 2001-35, Class A
	764,058			6.50			03/20/2029		768,421
Washington Mutual MSC Mortgage Pass-Through, Series 2003-MS3, Class 1A1
	696,739			5.75			03/25/2033		703,347
								$	17,352,753
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
	(CMOs	)						$	51,170,039
TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $368,928,423)								$	368,290,968
Agency Debentures – 14.9%
Federal Farm Credit Bank
$	3,000,000			6.60	%		07/07/2006	$	3,320,334
Federal Home Loan Bank
	1,000,000			5.68	~		12/03/2003		1,059,780
	3,000,000			3.50			08/15/2006		3,071,679
Federal Home Loan Mortgage Corp.
	1,200,000			2.13			11/15/2005		1,199,779
	2,800,000			5.25			01/15/2006		2,979,984
	5,000,000			3.00			03/05/2007		4,969,027
	7,000,000			6.63			09/15/2009		7,980,000
	13,200,000			4.38			02/04/2010		13,057,269
	4,500,000			7.00			03/15/2010		5,231,700
	6,200,000			4.75			10/11/2012		6,084,841
	6,000,000			4.75			05/06/2013		5,821,206
Federal National Mortgage Association
	8,000,000			6.63			09/15/2009		9,120,000
	10,000,000			7.13			06/15/2010		11,705,770
Small Business Administration
	1,129,036			6.70			12/01/2016		1,224,434
	857,105			7.15			03/01/2017		941,953
	725,804			7.50			04/01/2017		805,598
	451,681			7.30			05/01/2017		498,493
	266,469			6.80			08/01/2017		290,296
	664,903			6.30			05/01/2018		714,056
	666,895			6.30			06/01/2018		716,032
Tennessee Valley Authority~
	6,000,000			4.88			12/15/2006		6,431,652
TOTAL AGENCY DEBENTURES
(Cost $86,837,169)								$	87,223,883
Asset-Backed Securities – 2.2%
Auto – 1.5%
AESOP Funding II LLC Series 1998-1, Class A†
$	2,000,000			6.14	%		05/20/2006	$	2,104,104
AmeriCredit Automobile Receivables Trust Series 1999-D, Class A3
	189,245			7.02			12/12/2005		190,146
CPS Auto Trust Series 2002-A, Class A2
	4,000,000			4.81			12/15/2008		4,155,000
MFN Auto Receivables Trust Series 2002-A, Class A2†
	1,000,000			4.92			03/15/2008		1,031,563
Onyx Acceptance Grantor Trust Series 2001-A, Class A4
	1,113,939			7.44			11/15/2007		1,141,193
								$	8,622,006
Credit Card – 0.4%
Capital One Master Trust Series 2002-4A, Class A
$	2,500,000			4.90	%		03/15/2010	$	2,636,668
Home Equity – 0.2%
American Business Financial Services Series 1998-2, Class A6
$	991,675			6.46	%		09/25/2029	$	1,049,024
UCFC Home Equity Loan Series 1997-A1, Class A8
	190,690			7.22			06/15/2028		195,354
								$	1,244,378
Manufactured Housing – 0.1%
Mid-State Trust Series 4, Class A
$	560,775			8.33	%		04/01/2030	$	614,363
TOTAL ASSET-BACKED SECURITIES
(Cost $12,816,103)								$	13,117,415
U.S. Treasury Obligations – 16.7%
United States Treasury Interest-Only Stripped Securities@
$	24,700,000			0.00	%		05/15/2012	$	16,966,356
	5,680,000			0.00			02/15/2014		3,501,663
	18,000,000			0.00			08/15/2014		10,738,980
United States Treasury Principal-Only Stripped Securities•
	22,300,000			0.00			05/15/2017		11,124,578
	500,000			0.00			11/15/2022		173,730
	1,300,000			0.00			02/15/2023		445,614
	11,000,000			0.00			11/15/2024		3,403,180
	1,700,000			0.00			02/15/2025		516,817
	1,300,000			0.00			08/15/2025		384,280
	12,000,000			0.00			11/15/2026		3,309,480
United States Treasury Bonds
	1,800,000			7.50			11/15/2016		2,278,062
	2,800,000			9.00			11/15/2018		4,015,564
	5,400,000			6.88	^		08/15/2025		6,547,824
United States Treasury Notes
	7,000,000			2.38			08/15/2006		7,022,960
	27,900,000			4.25			08/15/2013		27,795,375
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $97,624,607)								$	98,224,463

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

40

GOLDMAN SACHS GOVERNMENT INCOME FUND 

Principal		Interest			Maturity
Amount		Rate			Date		Value
Insured Revenue Bond – 0.4%
New Jersey Economic Development Authority Series A
$	2,000,000		7.43	%		02/15/2029	$	2,406,845
TOTAL INSURED REVENUE BOND
(Cost $2,000,000)							$	2,406,845
Repurchase Agreement – 10.8%
Joint Repurchase Agreement Account IIΔ
$	63,600,000		1.06	%		11/03/2003	$	63,600,000
Maturity Value: $63,605,618
TOTAL REPURCHASE AGREEMENT
(Cost $63,600,000)							$	63,600,000
TOTAL INVESTMENTS
(Cost $631,806,302)							$	632,863,574

†	Securities are exempt from registration under rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounted to $3,135,667, which represent 0.5% of net assets as of October 31, 2003.
α	TBA (To Be Announced) securities are purchased on a forward commitment basis with an approximate (generally +/- 2.5%) 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.
#	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2003.
~	Securities with “Put” features with resetting interest rates. Maturity dates disclosed are next interest reset date.
^	A portion of this security is segregated as collateral for initial margin requirement on futures transactions.
Δ	Joint repurchase agreement was entered into on October 31, 2003.
@	Represents security with notional or nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.
•	Security issued with a zero coupon. Income is recognized through the accretion of discount.

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

Investment Abbreviations:
REMIC	—	Real Estate Mortgage Investment Conduit

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

41

 GOLDMAN SACHS CORE FIXED INCOME FUND

Performance Summary

October 31, 2003

The following graph shows the value, as of October 31, 2003, of a $10,000 investment made on January 5, 1994 (commencement of operations) 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. 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 portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Core Fixed Income Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested January 5, 1994 to October 31, 2003.

Average Annual Total Return through October 31, 2003	Since Inception		Five Years		One Year
Class A (commenced May 1, 1997)
Excluding sales charges		7.04%		6.00%		7.03%
Including sales charges		6.28%		5.04%		2.25%
Class B (commenced May 1, 1997)
Excluding contingent deferred sales charges		6.27%		5.23%		6.31%
Including contingent deferred sales charges		6.27%		4.81%		1.14%
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges		5.93%		5.22%		6.21%
Including contingent deferred sales charges		5.93%		5.22%		5.17%
Institutional Class (commenced January 5, 1994)		6.96%		6.43%		7.54%
Service Class (commenced March 13, 1996)		6.74%		5.89%		6.90%

42

GOLDMAN SACHS CORE FIXED INCOME FUND 

Statement of Investments

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Corporate Bonds – 19.7%
Airlines – 0.4%
American Airlines, Inc.
$	459,768		6.86	%		04/15/2009	$	459,219
Continental Airlines, Inc.
	405,114		7.26			03/15/2020		405,114
	1,055,780		7.71			04/02/2021		1,055,780
Delta Air Lines, Inc.
	1,873,133		6.62			03/18/2011		1,891,864
Northwest Airlines, Inc.
	463,239		7.67			01/02/2015		395,597
	326,588		7.58			03/01/2019		329,854
NWA Trust
	68,080		8.26			03/10/2006		62,038
							$	4,599,466
Automotive – 1.1%
Ford Motor Co.
$	2,310,000		6.63	%		10/01/2028	$	1,906,095
	2,610,000		6.38			02/01/2029		2,085,346
General Motors Corp.
	8,715,000		8.38			07/15/2033		9,241,798
							$	13,233,239
Banks – 2.5%
Capital One Bank
$	2,500,000		6.50	%		06/13/2013	$	2,576,850
Credit Suisse First Boston USA, Inc.
	6,050,000		6.13			11/15/2011		6,551,361
Fleet Boston Financial Corp.
	1,000,000		6.50			03/15/2008		1,111,025
	450,000		7.38			12/01/2009		524,098
Golden West Financial Corp.
	60,000		5.50			08/08/2006		64,364
Greenpoint Financial Corp.
	2,750,000		3.20			06/06/2008		2,642,305
HSBC Capital Funding LP#†
	4,850,000		4.61			12/13/2049		4,502,924
HSBC USA, Inc.
	500,000		6.63			03/01/2009		561,844
PNC Funding Corp.
	150,000		6.88			07/15/2007		166,925
Popular North America, Inc.
	4,500,000		6.13			10/15/2006		4,887,865
	1,100,000		4.25			04/01/2008		1,115,744
Sovereign Bank
	2,500,000		5.13			03/15/2013		2,441,422
	2,000,000		4.38	#		08/01/2013		2,014,802
Union Planters Bank
	75,000		5.13			06/15/2007		79,258
Union Planters Corp.
	150,000		7.75			03/01/2011		175,787
Washington Mutual, Inc.
	1,500,000		8.25			04/01/2010		1,784,023
							$	31,200,597
Captive-Automotive – 0.8%
Ford Motor Credit Co.
$	1,630,000		5.75	%		02/23/2004	$	1,649,630
	1,250,000		7.60			08/01/2005		1,328,745
	5,300,000		7.00			10/01/2013		5,210,128
General Motors Acceptance Corp.
	1,400,000		6.88			09/15/2011		1,444,244
							$	9,632,747
Construction Machinery – 0.0%
Deere & Co.
$	100,000		6.55	%		07/15/2004	$	103,307
Corporate-Other – 0.1%
Telecom Italia Capital†
$	880,000		6.38	%		11/15/2033	$	871,842
Diversified Manufacturing – 0.6%
Tyco International Group SA
$	5,500,000		6.38	%		10/15/2011	$	5,717,030
	2,100,000		6.88			01/15/2029		2,102,625
							$	7,819,655
Electric – 1.6%
Calenergy, Inc.
$	1,460,000		7.23	%		09/15/2005	$	1,581,619
	1,000,000		7.63			10/15/2007		1,134,914
Centerpoint Energy Resources Corp.†
	2,100,000		7.88			04/01/2013		2,386,192
Centerpoint Energy, Inc.†
	900,000		5.88			06/01/2008		926,238
	600,000		7.25			09/01/2010		642,962
FirstEnergy Corp.
	4,200,000		7.38			11/15/2031		4,503,245
FPL Group Capital Inc.
	150,000		3.25			04/11/2006		151,978
Midamerican Energy Holdings Co.
	1,100,000		5.88			10/01/2012		1,144,705
MidAmerican Funding LLC
	285,000		6.75			03/01/2011		314,423
Niagara Mohawk Power Corp.
	125,000		8.00			06/01/2004		129,498
	100,000		5.38			10/01/2004		102,941
NiSource Finance Corp.
	1,000,000		6.15			03/01/2013		1,064,072
	1,065,000		5.40			07/15/2014		1,065,206
Ohio Power Co.
	3,745,000		4.85			01/15/2014		3,614,121
TXU Electric Co.
	350,000		6.25			10/01/2004		363,715
							$	19,125,829
Environmental – 0.4%
Waste Management, Inc.
$	1,000,000		6.38	%		12/01/2003	$	1,003,108
	1,000,000		7.00			10/01/2004		1,043,143
	2,750,000		7.38			08/01/2010		3,172,566
							$	5,218,817

The accompanying notes are an integral part of these financial statements.       43

 GOLDMAN SACHS CORE FIXED INCOME FUND

Statement of Investments (continued)

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Corporate Bonds – (continued)
Financial-Other – 0.4%
Anthem Insurance Cos., Inc.†
$	350,000		9.13	%		04/01/2010	$	436,422
Astoria Financial Corp.
	4,600,000		5.75			10/15/2012		4,697,725
							$	5,134,147
Food & Beverage – 0.3%
Kraft Foods, Inc.
$	2,200,000		5.63	%		11/01/2011	$	2,287,307
Nabisco, Inc.
	1,000,000		7.05			07/15/2007		1,118,852
							$	3,406,159
Gaming – 0.3%
MGM Mirage, Inc.
$	850,000		8.50	%		09/15/2010	$	963,688
Park Place Entertainment Corp.
	950,000		8.50			11/15/2006		1,047,375
	1,745,000		7.50			09/01/2009		1,895,506
							$	3,906,569
Health Care – 0.4%
HCA, Inc.
$	1,500,000		6.95	%		05/01/2012	$	1,553,376
	400,000		6.30			10/01/2012		397,286
	3,100,000		6.75			07/15/2013		3,174,936
							$	5,125,598
Industrial – 0.3%
Altria Group, Inc.
$	500,000		5.63	%		11/04/2008	$	497,465
	1,000,000		7.00			11/04/2013		999,720
Daimlerchrysler NA Holding Corp.
	2,055,000		6.50			11/15/2013		2,054,342
							$	3,551,527
Insurance – 0.4%
Zurich Capital Trust†
$	4,650,000		8.38	%		06/01/2037	$	5,276,453
Life Insurance – 0.6%
Aegon NV
$	3,950,000		4.75	%		06/01/2013	$	3,832,450
Hartford Life Inc.
	200,000		7.10			06/15/2007		224,332
Principal Financial Group Australia†
	2,750,000		8.20			08/15/2009		3,246,622
Reinsurance Group of America, Inc.
	550,000		6.75			12/15/2011		592,764
							$	7,896,168
Media-Cable – 1.2%
AT&T Broadband Corp.
$	4,000,000		8.38	%		03/15/2013	$	4,843,945
Comcast Cable Communications, Inc.
	2,250,000		6.38			01/30/2006		2,419,673
	550,000		8.38			05/01/2007		635,771
Lenfest Communications, Inc.
	2,000,000		8.38			11/01/2005		2,217,962
Time Warner Entertainment Co. LP
	2,150,000		8.38			03/15/2023		2,605,150
	1,750,000		8.38			07/15/2033		2,167,585
							$	14,890,086
Media-Non Cable – 0.7%
Chancellor Media Corp. LA
$	8,000,000		8.00	%		11/01/2008	$	9,180,000
Metals – 0.2%
Falconbridge Ltd.
$	2,250,000		5.38	%		06/01/2015	$	2,160,758
Noncaptive-Consumer – 1.0%
American General Finance Corp.
$	1,000,000		6.10	%		05/22/2006	$	1,083,319
	250,000		5.75			03/15/2007		270,661
	200,000		2.75			06/15/2008		191,060
	765,000		8.45			10/15/2009		924,861
	4,000,000		5.38			10/01/2012		4,101,858
Countrywide Home Loans, Inc.
	1,250,000		5.50			02/01/2007		1,334,285
Household Finance Corp
	3,650,000		6.38			10/15/2011		3,989,355
	100,000		6.38			11/27/2012		109,038
							$	12,004,437
Noncaptive-Diversified – 0.4%
PHH Corp.
$	4,000,000		7.13	%		03/01/2013	$	4,434,528
Non-Ferrous Metals – 0.1%
CODELCO, Inc. †
$	1,000,000		5.50	%		10/15/2013	$	1,004,525
Pipelines – 0.1%
Panhandle Eastern Pipe Line Co.†
$	1,350,000		4.80	%		08/15/2008	$	1,376,314
Property/ Casualty Insurance – 1.3%
Ace Ltd.
$	6,000,000		6.00	%		04/01/2007	$	6,472,704
CNA Financial Corp.
	800,000		6.50			04/15/2005		816,000
	875,000		6.75			11/15/2006		895,414
	58,000		6.60			12/15/2008		57,753
Hartford Financial Services Group, Inc.
	2,000,000		7.90			06/15/2010		2,356,452
QBE Insurance Group Ltd.†#
	2,400,000		5.65			07/01/2023		2,262,684
SAFECO Corp.
	2,000,000		6.88			07/15/2007		2,230,874
	400,000		7.25			09/01/2012		456,943
							$	15,548,824

44       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)
REITs – 0.6%
Chelsea Property Group, Inc.
$	1,000,000		6.00	%		01/15/2013	$	1,039,539
EOP Operating LP
	1,500,000		7.75			11/15/2007		1,710,029
Liberty Property LP
	970,000		7.10			08/15/2004		1,005,483
	1,100,000		7.25			03/15/2011		1,243,968
Simon Property Group LP
	200,000		7.38			01/20/2006		218,944
	1,400,000		6.38			11/15/2007		1,528,658
							$	6,746,621
Tobacco – 0.7%
Altria Group, Inc.
$	500,000		7.20	%		02/01/2007	$	527,500
	500,000		7.65			07/01/2008		535,000
Philip Morris Companies, Inc
	4,250,000		6.95			06/01/2006		4,462,500
UST, Inc.
	2,250,000		6.63			07/15/2012		2,461,000
							$	7,986,000
Utilities – 0.2%
Centerpoint Energy Resources Corp. †
$	2,500,000		5.95	%		01/15/2014	$	2,487,700
Wireless Telecommunications – 0.5%
AT&T Wireless Services, Inc.
$	2,525,000		7.88	%		03/01/2011	$	2,886,443
Verizon New York, Inc.
	2,750,000		6.88			04/01/2012		3,021,947
							$	5,908,390
Wirelines Telecommunications – 2.5%
British Telecommunications PLC
$	6,500,000		8.88	%		12/15/2030	$	8,389,583
Deutsche Telekom International Finance B.V.
	7,400,000		8.75			06/15/2030		9,309,607
France Telecom SA
	2,990,000		9.00			03/01/2011		3,610,848
Koninklijke (Royal) KPN NV
	2,725,000		8.38			10/01/2030		3,392,788
Qwest Capital Funding, Inc.
	1,250,000		7.75			08/15/2006		1,243,750
	500,000		7.90			08/15/2010		477,500
Qwest Corp.
	300,000		7.20			11/01/2004		307,500
	130,000		6.88			09/15/2033		116,350
Sprint Capital Corp.
	1,500,000		8.38			03/15/2012		1,712,878
	2,700,000		6.88			11/15/2028		2,549,608
							$	31,110,412
TOTAL CORPORATE BONDS
(Cost $233,942,793)							$	240,940,715
Mortgage-Backed Obligations – 52.2%
Adjustable Rate Federal National Mortgage Association (FNMA) # – 2.1%
$	176,003		4.91	%		02/01/2033	$	180,640
	253,085		4.50			03/01/2033		259,500
	6,206,196		3.27			01/01/2035		6,267,162
	11,500,121		4.66			07/01/2036		11,728,537
	6,844,427		3.20			08/01/2037		6,911,781
							$	25,347,620
Adjustable Rate Non-Agency# – 3.8%
Bank of America Mortgage Securities, Inc. Series 2002-D, Class 1A1
$	1,371,746		5.34	%		05/25/2032	$	1,366,655
Bank of America Mortgage Securities, Inc. Series 2003-H, Class 2A3
	1,448,375		4.43			04/25/2033		1,454,799
CS First Boston Mortgage Securities Corp. Series 2003-AR9, Class 2A2
	1,295,150		5.10			03/25/2033		1,316,850
Federal National Mortgage Association
	5,135,757		4.71			08/01/2035		5,237,505
Washington Mutual Series 2002-AR10, Class A6
	5,060,932		4.82			10/25/2032		5,130,296
Washington Mutual Series 2002-AR19, Class A7
	4,062,354		4.68			02/25/2033		4,109,902
Washington Mutual Series 2002-AR6, Class A
	10,208,124		2.78			06/25/2042		10,287,220
Washington Mutual Series 2002-AR9, Class 1A
	10,152,237		2.78			08/25/2042		10,206,348
Washington Mutual Series 2003-AR6, Class A1
	1,011,105		4.39			06/25/2033		1,010,416
Wells Fargo Mortgage Backed Securities Trust Series 2002-A, Class A5
	6,942,373		5.90			03/25/2032		6,957,027
							$	47,077,018
Commercial Mortgage-Backed Securities (CMBS) – 3.8%
Asset Securitization Corp. Series 1997-D4, Class A1D
$	900,000		7.49	%		04/14/2029	$	1,010,469
Bear Stearns Commercial Mortgage Securities, Inc. Series 2001- TOP2, Class X2#†
	38,000,000		1.14			02/15/2035		1,881,190
Chase Commercial Mortgage Securities Corp. Series 1997-2, Class A2
	500,000		6.60			12/19/2029		546,669
CS First Boston Mortgage Securities Corp. Series 1997-C2, Class A3
	10,000,000		6.55			01/17/2035		10,922,522
CS First Boston Mortgage Securities Corp. Series 2002-CP3, Class ASP#†
	25,500,000		1.74			07/15/2035		1,688,327
First Union-Lehman Brothers Commercial Mortgage Services Series 1997-C1, Class A2
	315,015		7.30			04/18/2029		320,452
First Union-Lehman Brothers Commercial Mortgage Services Series 1997-C1, Class A3
	5,150,000		7.38			04/18/2029		5,745,800

The accompanying notes are an integral part of these financial statements.       45

 GOLDMAN SACHS CORE FIXED INCOME FUND

Statement of Investments (continued)

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Mortgage-Backed Obligations – (continued)
Commercial Mortgage-Backed Securities (CMBS) – (continued)
First Union-Lehman Brothers Commercial Mortgage Services Series 1997-C2, Class A2
$	328,359		6.60	%		11/18/2029	$	335,961
First Union-Lehman Brothers Commercial Mortgage Services Series 1997-C2, Class A3
	1,000,000		6.65			11/18/2029		1,098,931
GMAC Commercial Mortgage Securities, Inc. Series 1997-C1, Class A2
	127,749		6.85			07/15/2029		129,747
Greenwich Capital Commercial Funding Corp. Series 2003-C1, Class XP#†
	11,000,000		2.24			07/25/2035		1,080,551
J.P. Morgan Chase Commercial Mortgage Securities Corp. Series 2002-FL1A, Class A1#†
	4,021,835		1.47			02/14/2015		4,022,290
J.P. Morgan Commercial Mortgage Finance Corp. Series 1999-C8, Class A2
	3,000,000		7.40			07/15/2031		3,469,060
LB-UBS Commercial Mortgage Trust Series 2002-C2, Class XCP#†
	37,500,000		1.37			07/15/2035		2,227,530
LB-UBS Commercial Mortgage Trust Series 2002-C7, Class XCP#†
	47,190,000		1.19			01/15/2036		2,261,855
Merrill Lynch Mortgage Investors, Inc. Series 1998-C2, Class A2
	3,690,000		6.39			02/15/2030		4,017,726
Merrill Lynch Mortgage Investors, Inc. Series 1999-C1, Class A2
	4,500,000		7.56			11/15/2031		5,099,883
							$	45,858,963
Federal Home Loan Mortgage Corp. (FHLMC) – 3.0%
$	342,238		6.00	%		04/01/2009	$	358,474
	102,368		5.50			07/01/2013		105,948
	628,454		5.50			12/01/2013		650,431
	10,766,138		6.00			12/01/2013		11,207,787
	8,442,820		6.50			12/01/2013		8,856,579
	184,028		5.50			02/01/2014		190,346
	84,857		5.50			06/01/2014		87,771
	186,450		5.50			09/01/2014		192,850
	13,530		7.00			10/01/2014		14,321
	5,619,354		6.00			12/01/2014		5,851,152
	128,870		7.00			05/01/2015		136,401
	389,883		8.00			07/01/2015		414,329
	31,766		7.00			02/01/2016		33,646
	164,033		7.00			03/01/2016		173,741
	2,559,394		7.50			05/01/2016		2,724,856
	14,968		7.00			10/01/2017		15,792
	4,246,537		6.00			11/01/2022		4,381,604
	246,807		7.00			06/01/2026		259,657
	815,757		7.50			03/01/2027		869,825
	201,483		7.50			12/01/2030		214,283
	224,564		7.50			01/01/2031		238,831
							$	36,978,624
Federal National Mortgage Association (FNMA) – 17.4%
$	950		6.50	%		12/01/2003	$	954
	449,630		6.50			11/01/2009		475,664
	1,634,193		6.50			10/01/2010		1,723,559
	3,393,567		6.50			06/01/2011		3,590,770
	1,852,062		6.50			01/01/2013		1,954,431
	426,258		6.50			10/01/2013		448,191
	843,946		8.50			10/01/2015		931,536
	47,741		7.00			01/01/2016		50,687
	528,388		6.50			09/01/2016		556,494
	5,453,025		6.00			01/01/2017		5,679,925
	10,604,634		6.00			04/01/2018		11,028,244
	299,534		6.00			08/01/2018		308,874
	2,271,241		6.50			06/01/2019		2,362,763
	4,096,310		6.50			07/01/2022		4,262,629
	7,071,508		6.50			08/01/2022		7,358,627
	4,211,936		6.50			11/01/2022		4,380,654
	8,227		6.50			02/01/2026		8,542
	59,828		6.50			08/01/2026		62,121
	19,456		6.50			09/01/2027		20,163
	9,945		6.50			11/01/2027		10,307
	58,961		6.50			04/01/2028		61,333
	45,425		7.50			03/01/2029		48,270
	94,159		7.50			08/01/2029		99,958
	15,869		7.50			09/01/2029		16,846
	4,729		7.50			11/01/2029		5,020
	416,506		7.50			12/01/2030		445,991
	235,373		8.00			01/01/2031		254,614
	783,052		8.00			02/01/2031		843,016
	3,163,614		7.00			03/01/2031		3,344,138
	1,236,271		6.50			09/01/2031		1,289,208
	1,823,205		6.50			10/01/2031		1,901,427
	3,475,350		6.50			11/01/2031		3,624,745
	6,943,168		6.50			01/01/2032		7,242,792
	1,300,952		7.00			07/01/2032		1,367,158
	107,000,000		5.50			TBA-15yrα		110,143,125
	36,000,000		6.50			TBA-15yrα		37,395,000
							$	213,297,776
Government National Mortgage Association (GNMA) – 3.7%
$	104,012		6.50	%		01/15/2028	$	108,828
	112,061		6.50			02/15/2028		117,249
	72,647		6.50			03/15/2028		76,010
	814,756		6.50			09/20/2031		849,268
	28,662,322		6.50			10/20/2032		29,892,863
	13,726,510		6.50			11/20/2032		14,315,821
							$	45,360,039
Collateralized Mortgage Obligations (CMOs) – 18.4%
Interest Only@ – 0.3%
Countrywide Funding Corp. Series 2003-42, Class 2X1
$	7,401,740		0.39	%		10/25/2033	$	53,781
CS First Boston Mortgage Securities Corp. Series 2002-AR20, Class 2X
	14,601,230		0.60			08/25/2033		173,892

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

GOLDMAN SACHS CORE FIXED INCOME FUND 

Principal		Interest			Maturity
Amount		Rate			Date		Value
Collateralized Mortgage Obligations (CMOs) – (continued)
Interest Only@ – (continued)
CS First Boston Mortgage Securities Corp. Series 2002-AR31, Class 5X
$	12,450,783		0.98	%		11/25/2032	$	117,626
CS First Boston Mortgage Securities Corp. Series 2003-AR18, Class 2X
	13,414,532		0.78			07/25/2033		149,355
FNMA Series 2003-46, Class PI
	12,000,000		5.50			11/25/2027		1,735,648
GNMA REMIC Trust Series 2002-79, Class IP
	4,380,421		6.00			05/01/2003		73,480
Washington Mutual Series 2003-AR5, Class X1#
	43,320,076		0.76			02/25/2008		322,999
Washington Mutual Series 2003-AR6, Class X2
	33,282,200		0.37			05/25/2008		132,796
Washington Mutual Series 2003-AR7, Class X#
	49,980,973		0.99			06/25/2008		531,298
Wells Fargo Mortgage Backed Securities Trust Series 2003-G, Class AI0#
	24,168,462		0.80			06/25/2033		320,715
							$	3,611,590
Inverse Floater# – 0.9%
FHLMC Series 1544, Class M
$	253,730		17.26	%		07/15/2008	$	282,647
FNMA Series 1993-135, Class S
	302,615		14.39			07/25/2008		320,901
FNMA Series 1993-175, Class SA
	1,107,150		12.72			09/25/2008		1,189,561
FNMA Series 1993-72, Class SA
	125,412		17.01			05/25/2008		139,509
FNMA Series 1993-93, Class SA
	204,132		18.68			05/25/2008		225,890
FNMA Series 1993-95, Class SE
	142,133		20.08			06/25/2008		166,784
GNMA Series 2001-48, Class SA
	621,696		22.85			10/16/2031		745,902
GNMA Series 2001-51, Class SA
	1,205,165		27.65			10/16/2031		1,526,820
GNMA Series 2001-51, Class SB
	1,245,476		22.85			10/16/2031		1,521,641
GNMA Series 2001-59, Class SA
	223,736		22.69			11/16/2024		265,453
GNMA Series 2001-62, Class SB
	283,656		22.36			11/16/2027		332,241
GNMA Series 2002-11, Class SA
	670,839		32.34			02/16/2032		881,280
GNMA Series 2002-13, Class SB
	1,570,575		32.34			02/16/2032		2,077,059
Mortgage Trust Series 40, Class 16
	876,602		10.64			01/20/2022		1,037,896
							$	10,713,584
IOette@# – 0.0%
FNMA Series 1992-24, Class N
$	2,729		789.00	%		03/25/2007	$	25,089
Mezzanine CMO# – 0.4%
Structured Asset Securities Corp. Series 2000-4, Class B1
$	5,597,322		8.00	%		11/25/2030	$	5,618,929
Other – 0.2%
Novastar NIM Trust Series 2003 N-1†
$	898,752		7.39	%		09/28/2033	$	898,239
Structured Asset Investment Loan Trust Series 2003-BC5, Class M2A#
	1,200,000		2.91			06/25/2033		1,187,437
							$	2,085,676
Planned Amortization Class (PAC) CMOs – 10.2%
FHLMC Series 1508, Class H
$	1,616,877		7.50	%		10/15/2022	$	1,629,689
FHLMC Series 2127, Class TD
	5,564		6.00			01/15/2011		5,561
FHLMC Series 2335, Class GD
	5,358,134		6.50			01/15/2030		5,414,916
FHLMC Series 2341, Class PE
	5,940,839		6.50			03/15/2030		6,020,610
FHLMC Series 2406, Class PE
	13,000,000		6.50			08/15/2030		13,240,207
FHLMC Series 2444, Class PF
	12,000,000		6.50			08/15/2027		12,050,903
FHLMC Series 2454, Class BE
	15,000,000		6.50			10/15/2030		15,762,171
FNMA Series 1993-78, Class H
	1,900,000		6.50			06/25/2008		2,030,452
FNMA Series 1999-51, Class LG
	4,214,641		6.50			12/25/2028		4,318,144
FNMA Series 2001-48, Class PD
	1,000,000		6.50			06/25/2020		1,053,764
FNMA Series 2001-70, Class LN
	400,000		6.25			06/25/2030		413,935
FNMA Series 2001-70, Class PD
	9,000,000		6.00			03/25/2029		9,402,668
FNMA Series 2002-18, Class PB
	13,920,500		5.50			09/25/2013		14,130,365
GNMA Series 2001-60, Class PK
	7,093,756		6.00			09/20/2028		7,238,064
GNMA Series 2001-62, Class PB
	23,053,138		6.00			09/20/2027		23,428,510
GNMA Series 2002-1, Class PB
	3,534,780		6.00			02/20/2029		3,613,402
GNMA Series 2002-3, Class LE
	4,573,979		6.50			08/20/2030		4,678,103
							$	124,431,464
Planned Amortization — Interest Only@ – 0.0%
FNMA Series 1993-11, Class M
$	247,817		7.50	%		02/25/2008	$	16,706
Regular Floater CMOs# – 2.4%
Countrywide Funding Corp. Series 1993-4, Class A11
$	2,840,851		3.21	%		11/25/2008	$	2,836,096
FHLMC Series 1537, Class F
	960,632		2.92			06/15/2008		968,515

The accompanying notes are an integral part of these financial statements.       47

 GOLDMAN SACHS CORE FIXED INCOME FUND

Statement of Investments (continued)

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Collateralized Mortgage Obligations (CMOs) – (continued)
Regular Floater CMOs# – (continued)
FNMA REMIC Trust Series 1993-175, Class FA
$	2,391,445		3.68	%		09/25/2008	$	2,386,804
FNMA Series 1992-207, Class F
	27,287		2.43			02/25/2022		27,317
MLCC Mortgage Investors, Inc. Series 2003-A, Class 2A1
	7,843,867		1.51			03/25/2008		7,837,678
MLCC Mortgage Investors, Inc. Series 2003-A, Class 2A2
	2,736,233		1.63			03/25/2008		2,735,826
MLCC Mortgage Investors, Inc. Series 2003-C, Class A1
	5,881,984		1.45			11/25/2003		5,883,692
Sequoia Mortgage Trust Series 2003-1, Class 1A
	7,280,696		1.50			04/20/2033		7,291,026
							$	29,966,954
Sequential Fixed Rate CMOs – 4.0%
Bank of America Mortgage Securities, Inc. Series 2002-9, Class 3A1
$	497,450		6.00	%		10/25/2017	$	499,490
Citicorp Mortgage Securities, Inc. REMIC Series 1994-5, Class A6
	416,278		6.25			03/25/2024		419,093
CS First Boston Mortgage Securities Corp. Series 2003-1, Class 3A1
	6,221,454		6.00			01/25/2033		6,243,814
FHLMC Series 2145, Class KA
	1,501,289		6.35			09/15/2026		1,512,736
FHLMC Series 2367, Class BC
	6,527,973		6.00			04/15/2016		6,713,975
First Nationwide Trust Series 1999-3, Class 2PA3
	500,000		6.50			05/19/2029		529,070
First Nationwide Trust Series 1999-5, Class 1PA1
	3,812,316		7.00			01/19/2030		3,938,146
FNMASeries 2001-M2, Class C
	6,060,049		6.30			09/25/2015		6,509,980
GNMA Series 2002-27, Class C
	2,593,002		6.50			01/20/2030		2,623,404
Loans Inc. Series 2001-QS4, Class A1
	11,000,000		7.00			04/25/2031		11,451,165
Master Asset Securitization Trust Series 2002-8, Class 2A1
	1,561,945		6.00			12/25/2032		1,560,426
PNC Mortgage Securities Corp. Series 2000-3, Class 2A4
	1,214,752		8.00			05/25/2030		1,220,079
Residential Accredit Loans, Inc. Series 1998-QS14, Class A6
	5,542,103		6.75			10/25/2028		5,601,668
Structured Asset Securities Corp. Series 2000-4, Class 1A10
	363,781		7.60			11/25/2030		363,940
							$	49,186,986
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs)							$	225,656,978
TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $637,811,755)							$	639,577,018
Agency Debentures – 9.1%
Federal Home Loan Bank
$	6,000,000		5.13	%		03/06/2006	$	6,382,980
	10,000,000		3.98			11/07/2008		10,002,810
	5,000,000		5.38			05/15/2009		5,366,800
Federal Home Loan Mortgage Corp.
	2,000,000		2.13			11/15/2005		1,999,632
	4,000,000		5.25			01/15/2006		4,257,120
	4,140,000		3.00			03/05/2007		4,114,354
	3,500,000		5.00			07/30/2009		3,588,620
	27,000,000		6.63			09/15/2009		30,780,000
	9,000,000		7.00			03/15/2010		10,463,400
Federal National Mortgage Association
	5,000,000		2.75			06/03/2005		5,005,614
	9,300,000		4.21			06/03/2005		9,324,487
	100,000		6.00			12/15/2005		107,927
	6,000,000		5.50			02/15/2006		6,429,660
	10,000,000		6.63			09/15/2009		11,400,000
Small Business Administration
	1,667,238		6.30			06/01/2018		1,790,079
TOTAL AGENCY DEBENTURES
(Cost $110,998,012)							$	111,013,483
Asset-Backed Securities – 11.7%
Auto – 2.6%
AESOP Funding II LLC Series 1998-1, Class A†
$	3,400,000		6.14	%		05/20/2006	$	3,576,977
AESOP Funding II LLC Series 2003-3A, Class A1†
	10,000,000		2.75			07/20/2007		9,990,900
Americredit Automobile Receivables Trust Series 2000-A, Class A4
	617,181		7.29			12/12/2006		626,965
CPS Auto Trust Series 2002-A, Class A1
	2,155,603		3.74			01/15/2006		2,184,569
MFN Auto Receivables Trust Series 2002-A, Class A1†
	2,856,416		3.81			01/15/2005		2,878,731
Onyx Acceptance Auto Trust Series 2000-A, Class A4
	144,517		7.42			12/15/2004		144,832
Onyx Acceptance Auto Trust Series 2001-A, Class A4
	8,911,510		7.44			11/15/2007		9,129,546
WFS Financial Owner Trust Series 2000-B, Class A4
	2,770,737		7.84			02/20/2006		2,813,463
							$	31,345,983
Credit Card – 2.3%
Capital One Multi-Asset Execution Trust Series 2003-A1, Class A1
$	24,841,000		1.51	%		01/15/2009	$	24,958,572
Capital One Multi-Asset Execution Trust Series 2003-C1, Class C1
	1,300,000		3.67			03/15/2011		1,327,443
Capital One Multi-Asset Execution Trust Series 2003-C2, Class C2
	1,900,000		4.32			04/15/2009		1,920,406
							$	28,206,421

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

GOLDMAN SACHS CORE FIXED INCOME FUND 

Principal		Interest			Maturity
Amount		Rate			Date		Value
Asset-Backed Securities – (continued)
Home Equity – 5.9%
Aames Mortgage Trust Series 2000-2, Class A6F§
$	1,000,000		0.00/7.18	%		11/25/2028	$	1,079,658
Amortizing Residential Collateral Trust Series 2002-BC1M, Class A#
	9,911,614		1.40			01/01/2032		9,900,771
Amortizing Residential Collateral Trust Series 2002-BC3M, Class A#
	1,694,176		1.39			06/25/2032		1,694,176
AQ Finance NIM Trust Series 2003-N6#†
	8,118,605		1.42			05/25/2010		8,118,155
AQ Finance NIM Trust Series 2002-N2A†
	1,100,570		8.90			05/25/2032		1,089,402
AQ Finance NIM Trust Series 2003-N1†
	622,398		9.37			03/25/2033		622,392
ARC Net Interest Margin Trust Series 2002-6, Class A†
	710,658		7.75			09/27/2032		696,438
ContiMortgage Home Equity Loan Trust Series 1999-1, Class A7
	213,877		6.47			12/25/2013		222,317
First Franklin NIM Trust Series 2002-FF1, Class A†
	979,551		7.87			04/25/2032		975,875
HFC Home Equity Loan Asset Backed Certificates Series 2002-2 A#
	9,002,431		1.42			04/20/2032		9,000,177
HFC Home Equity Loan Asset Backed Certificates Series 2002-3, Class A#
	10,066,336		1.57			07/20/2032		10,063,739
Household Home Equity Loan Trust Series 2003-1, Class A#
	13,586,989		1.47			10/20/2032		13,586,981
Indy Mac Home Equity ABS,Inc. Series 2002-B, Class AV#
	5,359,986		1.57			10/25/2033		5,371,714
Long Beach Asset Holdings Corp. Series 2003-3, Class N1†
	951,062		7.26			07/25/2033		950,750
NC Finance NIM Trust Series 2003-2
	636,096		9.00			01/15/2033		635,694
NC Finance Trust Series 2002-1†
	108,319		9.25			03/25/2032		108,319
Sail Net Interest Margin Notes Series 2003-5, Class A†
	1,054,188		7.35			06/27/2033		1,054,034
Sail Net Interest Margin Notes Series 2003-BC1A, Class A†
	733,838		7.75			01/27/2033		732,636
Salomon Brothers Mortgage Securities VII Series 2002-WMC2, Class A2#
	4,405,749		1.40			09/24/2032		4,409,029
Saxon Asset Securities Trust Series 2003-1, Class AV2#
	1,957,157		1.44			01/01/2049		1,957,769
							$	72,270,026
Manufactured Housing – 0.3%
Mid-State Trust Series 4, Class A
$	3,765,498		8.33	%		04/01/2030	$	4,125,335
Utilities – 0.6%
Massachusetts RRB Special Purpose Trust Series 1999-1, Class A5
$	6,150,000		7.03	%		03/15/2012	$	7,056,145
TOTAL ASSET-BACKED SECURITIES
(Cost $142,287,990)							$	143,003,910
Emerging Market Debt – 1.0%
Mexico Government International Bond
$	3,730,000		11.38	%		09/15/2016	$	5,259,300
PDVSA Finance Ltd
	1,080,000		6.45			02/15/2004		1,080,000
Pemex Finance Ltd
	600,000		8.02			05/15/2007		661,500
	700,000		9.15			11/15/2018		829,364
United Mexican States
	3,200,000		5.88			01/15/2014		3,136,000
	1,430,000		8.13			12/30/2019		1,580,150
TOTAL EMERGING MARKET DEBT
(Cost $11,836,912)							$	12,546,314
Foreign Debt Obligation – 2.3%
Government of Australia‡
	AUD35,000,000		8.75	%		08/15/2008	$	27,923,215
TOTAL FOREIGN DEBT OBLIGATION
(Cost $27,442,470)							$	27,923,215
U.S. Treasury Obligations – 9.4%
United States Treasury Interest-Only Stripped Securities@
$	26,000,000		0.00	%		02/15/2012	$	18,153,978
	27,750,000		0.00			05/15/2012		19,061,392
	5,600,000		0.00			05/15/2023		1,882,104
United States Treasury Principal-Only Stripped Securities•
	300,000		0.00			11/15/2004		296,091
	38,450,000		0.00			05/15/2017		19,181,168
	560,000		0.00			05/15/2018		260,909
	400,000		0.00			11/15/2022		138,984
	4,900,000		0.00			11/15/2024		1,515,962
	6,800,000		0.00			08/15/2025		2,010,080
United States Treasury Bonds
	2,000,000		9.00			11/15/2018		2,868,260
	2,200,000		8.50			02/15/2020		3,054,150
	7,550,000		6.88	^		08/15/2025		9,154,828
United States Treasury Notes
	26,200,000		1.63			09/30/2005		26,120,169
	3,600,000		1.63			10/31/2005		3,584,672
	150,000		7.00			07/15/2006		168,655
	7,900,000		4.25			08/15/2013		7,870,375
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $115,237,124)							$	115,321,777

The accompanying notes are an integral part of these financial statements.       49

 GOLDMAN SACHS CORE FIXED INCOME FUND

Statement of Investments (continued)

October 31, 2003

Principal		Interest			Maturity
Amount		Rate			Date		Value
Repurchase Agreement – 5.1%
Joint Repurchase Agreement Account IIΔ
$	63,100,000		1.06	%		11/03/2003	$	63,100,000
Maturity Value: $63,105,574
TOTAL REPURCHASE AGREEMENT
(Cost $63,100,000)							$	63,100,000
TOTAL INVESTMENTS
(Cost $1,342,657,056)							$	1,353,426,432

†	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounted to $70,275,469, which represent 5.7% of net assets as of October 31, 2003.
#	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2003.
∞	TBA (To Be Announced) securities are purchased on a forward commitment basis with an approximate (generally +/- 2.5%) 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.
@	Represents security with notional or nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.
^	A portion of this security is segregated as collateral for initial margin requirement on futures transactions.
§	These securities are issued with a zero coupon which increases to the stated rate at a set date in the future.
Δ	Joint repurchase agreement was entered into on October 31, 2003.
•	Security is issued with a zero coupon. Income is recognized through the accretion of discount.
‡	The principal amount of the security is stated in the currency in which the bond is denominated. See below: AUD = Australian Dollar

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

Investment Abbreviations:
REMIC	—	Real Estate Mortgage Investment Conduit
REIT	—	Real Estate Investment Trust

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

GOLDMAN SACHS GLOBAL INCOME FUND 

Performance Summary

October 31, 2003

The following graph shows the value, as of October 31, 2003, of a $10,000 investment made on September 1, 1991 in Class A shares (with the maximum sales charge of 4.5%) of the Goldman Sachs Global Income Fund. For comparative purposes, the performance of the Fund’s benchmark, the J.P. Morgan Global Government Bond Index hedged to U.S. Dollars (the “JP Morgan GGB Index — $ Hedged”), 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. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemptions of Fund shares. These performance fluctuations will cause an investor’s shares, when redeemed, to be worth more or less than their original cost. 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/country investment selection and allocation, other factors may affect portfolio performance. These factors include, but are not limited to, portfolio operating fees and expenses, portfolio turnover, and subscription and redemption cash flows affecting the portfolio.

Global Income Fund’s Lifetime Performance

Performance of a $10,000 Investment, Distributions Reinvested September 1, 1991 to October 31, 2003.^(a)

Average Annual Total Return through October 31, 2003	Since Inception		Ten Years		Five Years		One Year
Class A (commenced August 2, 1991)
Excluding sales charges		6.80%		6.19%		4.13%		5.45%
Including sales charges		6.40%		5.70%		3.18%		0.67%
Class B (commenced May 1, 1996)
Excluding contingent deferred sales charges		5.83%		n/a		3.60%		4.87%
Including contingent deferred sales charges		5.83%		n/a		3.18%		-0.36%
Class C (commenced August 15, 1997)
Excluding contingent deferred sales charges		5.09%		n/a		3.61%		4.96%
Including contingent deferred sales charges		5.09%		n/a		3.61%		3.91%
Institutional Class (commenced August 1, 1995)		7.51%		n/a		4.80%		6.07%
Service Class (commenced March 12, 1997)		5.88%		n/a		4.27%		5.61%

(a)  For comparative purposes, initial investments are assumed to be made on the first day of the month following commencement of operations.

51

 GOLDMAN SACHS GLOBAL INCOME FUND

Statement of Investments

October 31, 2003

Principal		Interest			Maturity
Amount*		Rate			Date		Value
Foreign Debt Obligations – 70.1%
Australian Dollar – 4.3%
Government of Australia
	AUD 18,000,000		8.75	%		08/15/2008	$	14,360,511
	1,600,000		6.50			05/15/2013		1,191,695
							$	15,552,206
Canadian Dollar – 2.0%
Government of Canada
	CAD 3,600,000		6.00	%		06/01/2008	$	2,949,653
	2,500,000		5.25			06/01/2013		1,952,236
	2,900,000		5.75			06/01/2029		2,310,766
							$	7,212,655
Danish Krone – 1.0%
Kingdom of Denmark
	DKK 22,000,000		8.00	%		03/15/2006	$	3,817,966
Euro Currency – 39.4%
Federal Republic of Germany
	EUR 4,400,000		6.88	%		05/12/2005	$	5,429,193
	5,000,000		6.00			01/04/2007		6,293,015
	19,900,000		5.25			01/04/2008		24,669,060
	12,100,000		4.50			01/04/2013		14,300,478
	11,900,000		3.75			07/04/2013		13,215,580
	3,200,000		6.25			01/04/2024		4,357,636
	2,050,000		5.50			01/04/2031		2,561,205
Government of France
	2,600,000		8.50			10/25/2019		4,300,270
	1,500,000		8.50			04/25/2023		2,544,622
	2,800,000		5.50			04/25/2029		3,495,753
Household Finance Corp.
	940,000		6.25			09/21/2005		1,153,972
Kingdom of Belgium
	4,300,000		6.50			03/31/2005		5,267,140
	3,600,000		4.75			09/28/2006		4,367,922
Kingdom of Spain
	11,400,000		3.25			01/31/2005		13,379,731
Kingdom of The Netherlands
	2,000,000		3.75			07/15/2009		2,319,286
	1,800,000		4.25			07/15/2013		2,075,611
Koninklijke KPN NV
	1,500,000		7.25			04/12/2006		1,900,346
Korea Development Bank
	2,420,000		4.38			09/11/2008		2,804,373
Munich RE Finance BV#
	1,730,000		6.75			06/21/2023		2,188,939
NGG Finance PLC
	1,520,000		5.25			08/23/2006		1,836,922
	710,000		6.13			08/23/2011		887,290
Republic of France
	2,500,000		5.00			07/12/2005		3,016,078
Republic of Italy
	800,000		4.75			03/15/2006		967,731
	2,600,000		4.38			10/25/2006		2,728,671
	11,000,000		5.00			02/01/2012		13,452,279
	3,000,000		6.00			05/01/2031		3,957,909
							$	143,471,012
German Mark – 1.0%
Citicorp
	DEM 4,500,000		6.25	%		09/19/2009		2,925,335
	1,100,000		5.50			06/30/2010		684,613
							$	3,609,948
Great Britain Pound – 5.3%
North American Capital Corp.
	GBP 1,300,000		8.25	%		11/17/2003	$	2,207,143
United Kingdom Treasury
	400,000		6.75			11/26/2004		695,989
	2,000,000		8.50			07/16/2007		3,806,831
	1,200,000		7.25			12/07/2007		2,209,959
	1,500,000		5.00			03/07/2012		2,537,311
	1,300,000		8.75			08/25/2017		3,015,956
	1,000,000		8.00			06/07/2021		2,294,149
	1,600,000		4.25			03/07/2036		2,469,496
							$	19,236,834
Japanese Yen – 15.5%
Government of Japan
	JPY 35,000,000		0.50	%		06/20/2006	$	320,174
	2,100,000,000		0.90			12/22/2008		19,289,065
	4,020,000,000		1.30			06/20/2012		36,408,729
	30,000,000		1.50			03/20/2019		262,723
							$	56,280,691
Mexican Peso – 0.2%
United Mexican States
	MXN 800,000		7.50	%		04/08/2033	$	816,800
South African Rand – 1.0%
Republic of South Africa
	ZAR 21,000,000		13.00	%		08/31/2010	$	3,673,499
Swedish Krona – 0.4%
Kingdom of Sweden
	SEK 11,900,000		5.50	%		10/08/2012	$	1,594,300
TOTAL FOREIGN DEBT OBLIGATIONS
(Cost $237,654,097)							$	255,265,911

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

GOLDMAN SACHS GLOBAL INCOME FUND 

Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – 13.2%
Automotive – 0.8%
Ford Motor Credit Co.
	USD 420,000		7.25	%		10/25/2011	$	426,417
	1,080,000		7.00			10/01/2013		1,061,687
General Motors Acceptance Corp.
	470,000		7.00			02/01/2012		485,769
General Motors Corp.
	360,000		8.38			07/05/2033		447,696
	610,000		8.38			07/15/2033		646,873
							$	3,068,442
Chemicals – 1.0%
Air Products & Chemicals, Inc.
	USD 1,500,000		8.50	%		04/01/2006	$	1,538,117
The Dow Chemical Co.
	2,170,000		5.25			05/14/2004		2,202,771
							$	3,740,888
Commercial Banks – 1.0%
Bank of America Corp.
	USD 200,000		6.38	%		05/15/2005	$	213,609
	200,000		7.88			05/16/2005		218,139
	150,000		7.25			10/15/2025		171,806
Citicorp
	100,000		7.20			06/15/2007		113,414
Citigroup, Inc.
	1,250,000		6.75			12/01/2005		1,362,805
DBS Group Holdings Ltd.
	1,000,000		7.88			08/10/2009		1,175,090
Wells Fargo Bank NA#
	230,000		7.80			06/15/2010		250,452
							$	3,505,315
Conglomerates – 1.3%
Tyco International Group SA
	EUR 3,780,000		6.13	%		04/04/2007	$	4,564,322
Corporate-Other – 0.2%
France Telecom
	EUR 540,000		8.13	%		01/28/2033	$	787,471
Finance Companies – 1.8%
General Electric Capital Corp.
	USD 3,520,000		5.00	%		06/15/2007	$	3,730,399
General Motors Acceptance Corp.
	450,000		7.00			11/15/2005		551,210
Washington Mutual Finance Corp.
	2,020,000		8.25			06/15/2005		2,216,759
							$	6,498,368
Food & Beverage – 0.2%
Kraft Foods Inc.
	USD 750,000		5.25	%		06/01/2007	$	793,989
Insurance Companies – 0.7%
American General Finance Corp.
	USD 490,000		5.75	%		11/01/2003	$	490,000
Prudential Insurance Co. of America
	1,900,000		6.38			07/23/2006		2,058,371
							$	2,548,371
Media-Cable – 0.6%
Comcast Cable Communications
	USD 1,900,000		8.38	%		05/01/2007	$	2,196,301
Media-Non Cable – 0.0%
PanAmSat Corp.
	USD 165,000		6.13	%		01/15/2005	$	168,300
Mortgage Banks – 0.3%
Countrywide Home Loans, Inc.
	USD 1,000,000		5.25	%		06/15/2004	$	1,022,590
REIT – 0.6%
EOP Operating LP
	USD 1,730,000		6.63	%		02/15/2005	$	1,828,288
Liberty Property LP
	235,000		6.97			12/11/2003		236,163
							$	2,064,451
Telecommunications – 1.6%
Bell Atlantic New Jersey, Inc.
	USD 65,000		8.00	%		06/01/2022	$	76,243
British Telecommunications PLC
	1,470,000		8.13			12/15/2010		1,778,711
Deutsche Telekom AG
	1,860,000		8.25			06/15/2005		2,031,906
Sogerim
	450,000		7.00			04/20/2011		591,861
Verizon Global Funding Corp.
	1,380,000		6.13			06/15/2007		1,518,074
							$	5,996,795
Tobacco – 1.4%
British American Tobacco Holdings BV#
	EUR 1,040,000		3.05	%		07/21/2005	$	1,212,147
Imperial Tobacco Finance PLC
	250,000		6.25			06/06/2007		309,787
Imperial Tobacco Overseas BV
	1,260,000		7.13			04/01/2009		1,421,013
Philip Morris Companies, Inc.
	1,850,000		7.50			04/01/2004		1,884,639
	95,000		6.95			06/01/2006		99,750
							$	4,927,336
Utilities – 0.4%
First Energy Corp.
	USD 690,000		7.38	%		11/15/2031	$	739,819
Olivetti Finance NV
	530,000		7.75			01/24/2033		746,251
							$	1,486,070

The accompanying notes are an integral part of these financial statements.       53

Statement of Investments (continued)

October 31, 2003

 GOLDMAN SACHS GLOBAL INCOME FUND

Principal		Interest			Maturity
Amount*		Rate			Date		Value
Corporate Bonds – (continued)
Utilities – (continued)
Yankee Banks – 1.3%
Merita Bank Ltd.
	USD 1,010,000		6.50	%		04/01/2009	$	1,132,178
National Westminster Bank PLC#
	370,000		7.75			04/29/2049		424,247
Santander Financial Issuances
	1,100,000		7.88			04/15/2005		1,189,120
Sparebanken Rogaland†#
	1,800,000		9.20			08/18/2004		1,883,068
							$	4,628,613
TOTAL CORPORATE BONDS
(Cost $44,484,373)							$	47,997,622
Agency Debentures – 1.3%
Federal Home Loan Mortgage Corp.
	USD 4,700,000		5.13	%		08/20/2012	$	4,692,480
TOTAL AGENCY DEBENTURES
(Cost $4,669,787)							$	4,692,480
Mortgage-Backed Obligations – 0.4%
Planned Amortization Class (PAC) CMOs – 0.4%
Federal Home Loan Mortgage Corp. Series 1623, Class PG
	USD 1,361,972		3.00	%		07/15/2021	$	1,366,946
TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $1,189,704)							$	1,366,946
U.S. Treasury Obligations – 11.0%
United States Treasury Interest-Only Stripped Securities@
	USD 300,000		0.00	%		02/15/2013	$	197,124
	400,000		0.00			02/15/2014		246,596
United States Treasury Principal-Only Stripped Securities•
	1,520,000		0.00			11/15/2009		1,209,266
	6,210,000		0.00			05/15/2020		2,531,941
	1,000,000		0.00			05/15/2021		382,450
	1,720,000		0.00			11/15/2021		636,778
	1,000,000		0.00			11/15/2022		347,460
	2,070,000		0.00			11/15/2024		640,417
	2,400,000		0.00			08/15/2025		709,440
	1,500,000		0.00			08/15/2026		420,585
	3,210,000		0.00			11/15/2026		885,286
United States Treasury Bonds
	2,300,000		8.88			08/15/2017		3,239,228
	1,400,000		8.13			08/15/2019		1,879,276
	3,000,000		6.88			08/15/2025		3,637,680
	100,000		6.25			05/15/2030		114,328
United States Treasury Notes
	6,000,000		2.88			06/30/2004		6,070,140
	11,000,000		6.75			05/15/2005		11,861,960
	500,000		4.63			05/15/2006		530,740
	2,630,000		2.63			05/15/2008		2,578,583
	1,700,000		3.88			02/15/2013		1,652,859
	300,000		4.25			08/15/2013		298,875
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $39,448,480)							$	40,071,012

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

54

GOLDMAN SACHS GLOBAL INCOME FUND 

		Exercise		Expiration
	Contracts*	Rate		Date		Value
	Options Purchased – 0.1%
Cross Currency Option
Call KRW 3,875,000
Put USD 3,355			1,155.00		11/26/2003	$	11,102
Cross Currency Option
Call JPY 5,047,000
Put CHF 61,549			82.00		11/19/2003		34,828
Cross Currency Option
Call THB 2,119,000
Put USD 51,683			41.00		11/28/2003		63,718
Cross Currency Option
Call THB 2,019,000
Put USD 49,852			40.50		12/12/2003		29,225
Cross Currency Option
Call THB 1,817,000
Put USD 44,317			41.00		11/26/2003		54,201
	TOTAL OPTIONS PURCHASED
	(Cost $126,937)					$	193,074

Principal		Interest			Maturity
Amount*		Rate			Date		Value
Short-Term Obligations – 0.5%
State Street Bank & Trust Euro – Time Deposit
	USD 1,815,000		0.94	%		11/03/2003	$	1,815,000
TOTAL SHORT-TERM OBLIGATIONS
(Cost $1,815,000)							$	1,815,000
TOTAL INVESTMENTS
(Cost $327,538,634)							$	351,402,045

*	The principal amount of each security or contract is stated in the currency in which the bond/option is denominated. See below.
	AUD	=	Australian Dollar
	CAD	=	Canadian Dollar
	CHF	=	Swiss Franc
	DKK	=	Danish Krone
	DEM	=	German Mark
	EUR	=	Euro Currency
	GBP	=	Great Britain Pound
	JPY	=	Japanese Yen
	KRW	=	South Korean Won
	MXN	=	Mexican Peso
	SEK	=	Swedish Krona
	THB	=	Thailand Baht
	USD	=	United States Dollar
	ZAR	=	South African Rand
†	Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers in transactions exempt from registration. Total market value of Rule 144A securities amounted to $1,883,068, which represents 0.5% of net assets as of October 31, 2003.
#	Variable rate security. Interest rate disclosed is that which is in effect at October 31, 2003.
@	Represents security with notional or nominal principal amount. The actual effective yield of this security is different than the stated interest rate due to the amortization of related premiums or accretion of discounts.
•	Security issued with a zero coupon. Income is recognized through the accretion of discount.

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

Investment Abbreviations:
REIT	—	Real Estate Investment Trust

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

55

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Statements of Assets and Liabilities

October 31, 2003

		Enhanced
		Income Fund
Assets:
Investment in securities, at value (identified cost $1,477,896,119, $2,657,477,496, $874,286,679, $568,206,302, $1,279,557,056 and $327,538,634)		$	1,499,538,873
Repurchase Agreement, at cost			23,800,000
Cash(a)			3,334,366
Foreign currencies, at value (Core Fixed Income only identified cost $11,024)			—
Receivables:
	Investment securities sold, at value		—
	Interest, at value		15,308,361
	Fund shares sold		16,460,844
	Forward foreign currency exchange contracts, at value		—
	Variation margin		—
	Reimbursement from investment adviser		37,181
Other assets, at value			11,360
Total assets			1,558,490,985
Liabilities:
Due to custodian, at value			—
Payables:
	Investment securities purchased, at value		6,000,000
	Income distribution		290,091
	Fund shares repurchased		15,416,035
	Amounts owed to affiliates		451,098
	Forward foreign currency exchange contracts, at value		—
	Variation margin		434,547
	Swap interest due to counterparty		—
	Swap contracts, at value		—
Accrued expenses and other liabilities, at value			102,361
Total liabilities			22,694,132
Net Assets:
Paid-in capital			1,584,533,563
Accumulated undistributed net investment income			3,273,008
Accumulated net realized gain (loss) on investment, options, futures, swaps and foreign currency related transactions			(71,853,212	)
Net unrealized gain (loss) on investments, options, futures, swaps and translation of assets and liabilities denominated in foreign currencies			19,843,494
NET ASSETS		$	1,535,796,853
Net asset value, offering and redemption price per share:(b)
	Class A		$9.99
	Class B		—
	Class C		—
	Institutional		$9.98
	Administration		$9.99
	Service		—
Shares outstanding:
	Class A		37,871,393
	Class B		—
	Class C		—
	Institutional		110,917,741
	Administration		5,051,522
	Service		—
Total shares outstanding, $.001 par value (unlimited number of shares authorized)			153,840,656

(a)

Includes restricted cash of $27,486,000 on deposit with the swap counterparty as collateral for the Goldman Sachs Core Fixed Income Fund.

(b)

Maximum public offering price per share for Class A shares of the Enhanced Income and Ultra-Short Duration Government (NAV per share multiplied by 1.0152), Short Duration Government (NAV per share multiplied by 1.0204), Government Income, Core Fixed Income and Global Income Funds (NAV per share multiplied by 1.0471) is $10.14, $9.61, $10.19, $15.58, $10.80 and $15.07, 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.

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

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

Ultra-Short Duration			Short Duration			Government		Core Fixed			Global
Government Fund			Government Fund			Income Fund		Income Fund			Income Fund
$	2,644,002,445		$	871,809,355		$	569,263,574	$	1,290,326,432		$	351,402,045
	166,500,000			50,900,000			63,600,000		63,100,000			—
	—			—			884,661		24,941,195			—
	—			—			—		12,716			—
	32,408,723			24,081,837			162,611,554		471,882,566			18,577,632
	14,748,707			5,439,087			3,402,172		9,064,336			6,811,641
	3,928,508			1,281,131			1,940,522		11,421,416			822,409
	—			—			—		—			4,663,456
	—			46,594			157,554		1,148,671			1,976,113
	—			42,870			47,707		—			22,156
	3,410			—			—		1,779			—
	2,861,591,793			953,600,874			801,907,744		1,871,899,111			384,275,452
	16,331,412			1,366,671			—		—			291,551
	4,416,297			27,293,026			212,129,412		628,398,733			16,137,835
	2,266,374			534,586			125,597		1,228,556			—
	32,614,837			4,183,760			1,584,289		2,476,871			532,125
	1,357,736			708,580			477,243		664,852			389,396
	—			—			—		848,828			2,939,750
	223,109			—			—		—			—
	—			—			—		2,966,643			—
	—			—			—		10,476,951			—
	146,597			102,553			90,853		123,098			99,238
	57,356,362			34,189,176			214,407,394		647,184,532			20,389,895
	2,922,139,717			929,789,478			580,307,189		1,183,141,115			374,315,768
	12,125,443			1,693,719			1,005,167		2,156,464			27,164,048
	(115,649,962	)		(9,108,300	)		4,818,799		40,008,764			(63,546,840	)
	(14,379,767	)		(2,963,199	)		1,369,195		(591,764	)		25,952,581
$	2,804,235,431		$	919,411,698		$	587,500,350	$	1,224,714,579		$	363,885,557
$	9.47		$	9.99		$	14.88	$	10.31		$	14.39
	—		$	9.95		$	14.88	$	10.35		$	14.34
	—		$	9.93		$	14.87	$	10.35		$	14.32
$	9.48		$	9.96		$	14.85	$	10.35		$	14.37
	—			—			—		—			—
$	9.50		$	9.95		$	14.85	$	10.35		$	14.36
	81,212,809			31,784,470			24,061,312		43,158,852			15,609,225
	—			5,082,253			2,965,053		3,586,387			2,588,470
	—			13,101,533			1,595,315		2,454,461			785,015
	207,504,184			41,681,251			10,172,472		67,184,978			6,289,090
	—			—			—		—			—
	7,105,901			618,660			706,566		2,109,877			42,438
	295,822,894			92,268,167			39,500,718		118,494,555			25,314,238

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

57

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Statements of Operations

For the Year Ended October 31, 2003

		Enhanced
		Income Fund
Investment income:
Interest(a)		$	84,155,609
Total income			84,155,609
Expenses:
Management fees			5,379,887
Distribution and service fees(b)			1,566,094
Transfer agent fees(b)			1,800,438
Custody and accounting fees			309,634
Registration fees			61,075
Printing fees			57,965
Professional fees			40,193
Service share fees			—
Trustee fees			10,986
Administration share fees			48,643
Other			76,776
Total expenses			9,351,691
Less — expense reductions			(1,324,403	)
Net Expenses			8,027,288
NET INVESTMENT INCOME			76,128,321
Realized and unrealized gain (loss) on investment, options, futures, swaps and foreign currency related transactions:
Net realized gain (loss) from:
	Investment transactions		17,867,733
	Options written		—
	Futures transactions		(27,579,475	)
	Swap contracts		—
	Foreign currency related transactions		—
Net change in unrealized gain (loss) on:
	Investments		(29,299,497	)
	Futures		11,449,987
	Swap contracts		—
	Translation of assets and liabilities denominated in foreign currencies		—
Net realized and unrealized gain (loss) on investment, options, futures, swaps and foreign currency related transactions			(27,561,252	)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS		$	48,567,069

(a)	Net of $37,525 in foreign withholding tax for the Global Income Fund.
(b)	Class specific Distribution and Service and Transfer Agent fees were as follows:

	Distribution and Service Fees						Transfer Agent Fees
Fund	Class A		Class B		Class C		Class A		Class B		Class C		Institutional		Administration		Service
Enhanced Income Fund	$	1,566,094	$	—	$	—	$	1,190,231	$	—	$	—	$	602,424	$	7,783	$	—
Ultra-Short Duration Fund		2,709,156		—		—		2,058,958		—		—		1,053,416		—		27,439
Short Duration Fund		741,540		555,152		1,264,238		563,571		105,479		240,205		159,341		—		4,021
Government Income Fund		777,036		521,718		264,919		590,548		99,126		50,334		55,940		—		4,905
Core Fixed Income Fund		977,764		390,869		237,261		743,101		74,265		45,079		291,225		—		9,811
Global Income Fund		1,269,918		389,596		117,905		482,569		74,023		22,402		45,387		—		365

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

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

Ultra-Short
Duration			Short Duration			Government			Core Fixed			Global
Government Fund			Government Fund			Income Fund			Income Fund			Income Fund
$	128,909,652		$	39,072,730		$	20,360,066		$	58,606,290		$	18,865,599
	128,909,652			39,072,730			20,360,066			58,606,290			18,865,599
	15,143,195			4,434,803			3,520,334			4,826,035			3,772,021
	2,709,156			2,560,930			1,563,673			1,605,894			1,777,419
	3,139,813			1,072,617			800,853			1,163,481			624,746
	485,834			254,265			216,776			404,010			397,310
	98,619			118,831			79,436			81,522			61,468
	51,038			46,975			45,610			46,975			45,610
	40,694			40,324			40,423			41,572			42,845
	342,986			50,263			61,303			122,639			4,567
	10,986			10,986			10,986			10,986			10,986
	—			—			—			—			—
	112,478			73,090			68,451			77,114			54,083
	22,134,799			8,663,084			6,407,845			8,380,228			6,791,055
	(23,429	)		(576,243	)		(1,018,767	)		(14,110	)		(1,627,079	)
	22,111,370			8,086,841			5,389,078			8,366,118			5,163,976
	106,798,282			30,985,889			14,970,988			50,240,172			13,701,623
	7,579,512			(3,565,190	)		8,710,531			23,854,565			15,924,427
	—			—			—			—			9,804
	(27,420,420	)		3,361,114			(524,980	)		2,287,892			(599,119	)
	—			—			—			15,244,003			—
	—			—			—			(335,856	)		(16,110,982	)
	(36,497,223	)		(11,912,910	)		(9,835,145	)		(6,252,063	)		4,601,259
	9,255,516			(1,698,588	)		1,132,985			2,607,316			382,829
	—			—			—			(6,809,781	)		—
	—			—			—			(837,369	)		5,967,126
	(47,082,615	)		(13,815,574	)		(516,609	)		29,758,707			10,175,344
$	59,715,667		$	17,170,315		$	14,454,379		$	79,998,879		$	23,876,967

The accompanying notes are an integral part of these financial statements.       59

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Statements of Changes in Net Assets

For the Year Ended October 31, 2003

		Enhanced
		Income Fund
From operations:
Net investment income		$	76,128,321
Net realized gain (loss) on investment, options, futures, swaps and foreign currency related transactions			(9,711,742	)
Net change in unrealized gain (loss) on investments, futures, swaps and translation of assets and liabilities denominated in foreign currencies			(17,849,510	)
Net increase in net assets resulting from operations			48,567,069
Distributions to shareholders:
From net investment income
	Class A Shares		(20,331,328	)
	Class B Shares		—
	Class C Shares		—
	Institutional Shares		(54,132,455	)
	Administration Shares		(636,079	)
	Service Shares		—
From net realized gains
	Class A Shares		—
	Class B Shares		—
	Class C Shares		—
	Institutional Shares		—
	Service Shares		—
Total distributions to shareholders			(75,099,862	)
From share transactions:
Proceeds from sales of shares			1,887,117,875
Reinvestment of dividends and distributions			66,529,827
Cost of shares repurchased			(3,292,429,285	)
Net increase (decrease) in net assets resulting from share transactions			(1,338,781,583	)
TOTAL INCREASE (DECREASE)			(1,365,314,376	)
Net assets:
Beginning of year			2,901,111,229
End of year		$	1,535,796,853
Accumulated undistributed net investment income		$	3,273,008

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

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

Ultra-Short Duration			Short Duration			Government			Core Fixed			Global
Government Fund			Government Fund			Income Fund			Income Fund			Income Fund
$	106,798,282		$	30,985,889		$	14,970,988		$	50,240,172		$	13,701,623
	(19,840,908	)		(204,076	)		8,185,551			41,050,604			(775,870	)
	(27,241,707	)		(13,611,498	)		(8,702,160	)		(11,291,897	)		10,951,214
	59,715,667			17,170,315			14,454,379			79,998,879			23,876,967
	(36,758,337	)		(9,958,624	)		(10,482,880	)		(15,224,632	)		(12,518,641	)
	—			(1,549,635	)		(1,397,916	)		(1,222,253	)		(1,739,113	)
	—			(3,319,698	)		(705,656	)		(743,228	)		(525,346	)
	(99,636,791	)		(14,956,513	)		(5,235,819	)		(31,167,480	)		(6,351,427	)
	—			—			—			—			—
	(2,235,538	)		(334,558	)		(410,300	)		(924,649	)		(45,398	)
	—			—			(282,318	)		(1,155,334	)		—
	—			—			(57,041	)		(133,823	)		—
	—			—			(27,650	)		(74,023	)		—
	—			—			(106,723	)		(2,746,496	)		—
	—			—			(14,099	)		(109,857	)		—
	(138,630,666	)		(30,119,028	)		(18,720,402	)		(53,501,775	)		(21,179,925	)
	3,857,993,633			906,757,628			602,412,055			655,115,170			141,173,543
	106,769,668			22,752,384			16,723,406			38,502,701			17,820,233
	(4,765,319,628	)		(681,167,411	)		(444,591,828	)		(630,905,538	)		(247,456,671	)
	(800,556,327	)		248,342,601			174,543,633			62,712,333			(88,462,895	)
	(879,471,326	)		235,393,888			170,277,610			89,209,437			(85,765,853	)
	3,683,706,757			684,017,810			417,222,740			1,135,505,142			449,651,410
$	2,804,235,431		$	919,411,698		$	587,500,350		$	1,224,714,579		$	363,885,557
$	12,125,443		$	1,693,719		$	1,005,167		$	2,156,464		$	27,164,048

The accompanying notes are an integral part of these financial statements.       61

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Statements of Changes in Net Assets

For the Year Ended October 31, 2002

		Enhanced
		Income Fund
From operations:
Net investment income		$	87,237,109
Net realized gain (loss) on investment, options, futures, swaps and foreign currency related transactions			(60,918,293	)
Net change in unrealized gain (loss) on investments, futures, swaps and translation of assets and liabilities denominated in foreign currencies			26,218,713
Net increase in net assets resulting from operations			52,537,529
Distributions to shareholders:
From net investment income
	Class A shares		(19,793,051	)
	Class B shares		—
	Class C shares		—
	Institutional shares		(65,322,253	)
	Administration shares		(322,450	)
	Service shares		—
From net realized gains
	Class A shares		—
	Class B shares		—
	Class C shares		—
	Institutional shares		—
	Administration shares		—
	Service shares		—
Total distributions to shareholders			(85,437,754	)
From share transactions:
Proceeds from sales of shares			4,506,992,529
Reinvestment of dividends and distributions			79,936,959
Cost of shares repurchased			(2,617,605,588	)
Net increase (decrease) in net assets resulting from share transactions			1,969,323,900
TOTAL INCREASE (DECREASE)			1,936,423,675
Net assets:
Beginning of year			964,687,554
End of year		$	2,901,111,229
Accumulated undistributed (distributions in excess of) net investment income		$	2,244,549

(a)   Effective July 1, 2002, the Fund’s name changed from the Goldman Sachs Adjustable Rate Government Fund to the Goldman Sachs Ultra-Short Duration Government Fund.

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

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

Ultra-Short Duration(a)			Short Duration			Government			Core Fixed			Global
Government Fund			Government Fund			Income Fund			Income Fund			Income Fund
$	71,329,080		$	18,368,143		$	11,358,616		$	50,156,781		$	16,717,195
	(35,737,766	)		6,219,104			2,484,839			6,340,846			(22,257,594	)
	11,920,206			2,506,099			3,086,385			(14,456,513	)		10,767,313
	47,511,520			27,093,346			16,929,840			42,041,114			5,226,914
	(19,046,506	)		(6,352,129	)		(7,594,281	)		(11,472,281	)		(9,967,059	)
	—			(1,017,591	)		(1,438,662	)		(1,279,956	)		(1,140,026	)
	—			(1,482,253	)		(599,673	)		(654,125	)		(331,240	)
	(60,371,480	)		(11,769,264	)		(2,010,326	)		(35,428,999	)		(6,700,789	)
	—			—			—			—			—
	(1,371,303	)		(354,197	)		(407,255	)		(1,350,549	)		(54,535	)
	—			—			(1,487,583	)		(570,720	)		—
	—			—			(360,836	)		(83,157	)		—
	—			—			(153,519	)		(38,353	)		—
	—			—			(409,596	)		(1,854,157	)		—
	—			—			—			—			—
	—			—			(90,873	)		(85,623	)		—
	(80,789,289	)		(20,975,434	)		(14,552,604	)		(52,817,920	)		(18,193,649	)
	5,006,107,081			676,659,618			376,474,236			841,685,991			110,656,381
	64,446,144			15,542,700			12,055,092			40,773,780			15,510,645
	(1,722,791,632	)		(352,659,853	)		(207,673,414	)		(421,411,541	)		(174,177,443	)
	3,347,761,593			339,542,465			180,855,914			461,048,230			(48,010,417	)
	3,314,483,824			345,660,377			183,233,150			450,271,424			(60,977,152	)
	369,222,933			338,357,433			233,989,590			685,233,718			510,628,562
$	3,683,706,757		$	684,017,810		$	417,222,740		$	1,135,505,142		$	449,651,410
$	(426,679	)	$	242,922		$	303,490		$	(318,942	)	$	4,217,947

The accompanying notes are an integral part of these financial statements.       63

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements

October 31, 2003

1. ORGANIZATION

Goldman Sachs Trust (the “Trust”) is a Delaware statutory trust registered under the Investment Company Act of 1940 (as amended) as an open-end, management investment company. The Trust includes Goldman Sachs Enhanced Income Fund (Enhanced Income), Goldman Sachs Ultra-Short Duration Government Fund (Ultra-Short Duration Government), Goldman Sachs Short Duration Government Fund (Short Duration Government), Goldman Sachs Government Income Fund (Government Income), Goldman Sachs Core Fixed Income Fund (Core Fixed Income) and Goldman Sachs Global Income Fund (Global Income), (collectively, the “Funds” or individually a “Fund”). Enhanced Income, Ultra-Short Duration Government, Short Duration Government, Government Income and Core Fixed Income are diversified portfolios of the Trust whereas Global Income is a non-diversified portfolio. Enhanced Income offers three classes of shares — Class A, Institutional and Administration. Ultra-Short Duration Government offers three classes of shares — Class A, Institutional and Service. Government Income, Short Duration Government, Core Fixed Income and Global Income offer five classes of shares — Class A, Class B, Class C, Institutional and Service.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Funds. The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 accurate market quotations are readily available are valued 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. Portfolio securities for which accurate market quotations are not readily available are valued based on yield equivalents, pricing matrices or other sources, under valuation procedures established by the Trust’s Board of Trustees. In addition, the impact of events that occur after the publication of market quotations used by a Fund to price its securities but before the close of regular trading on the New York Stock Exchange will not be reflected in a Fund’s next determined Net Asset Value (NAV) unless the Trust, in its discretion, determines to make an adjustment in light of the nature and significance of the event, consistent with the applicable regulatory guidance.

B. Security Transactions and Investment Income — Security transactions are recorded 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, net of foreign withholding taxes and reclaims where applicable. 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 Fund based upon the relative proportion of net assets of each class.

     Certain mortgage security paydown gains and losses are taxable as ordinary income (loss). Such paydown gains and losses increase or decrease taxable ordinary income available for distribution and are classified as interest income in the accompanying Statements of Operations. Original issue discounts (OID) on debt securities are amortized 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 amortized to interest income over the expected life of the security with a corresponding adjustment in the cost basis of that security.

C. Federal Taxes — It is each Fund’s policy to comply with the requirements of the Internal Revenue 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 ex-dividend date. Income distributions are declared daily and paid monthly. Capital gain distributions, if any, are declared and paid annually.

     The characterization of distributions to shareholders for financial reporting purposes is determined in accordance with Federal income tax rules. Therefore, the source of a Fund’s distributions may be shown in the accompanying financial statements as either from net investment income or net realized gain on investment transactions, or from paid-in-capital, depending on the type of book/tax differences that may exist.

64       

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

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

     Class A, Class B and Class C shareholders of the Funds bear all expenses and fees relating to their respective distribution and service plans. Service Shares bear all expenses and fees relating to their Service and Shareholder Administration Plans. Administration Shares bear all expenses and fees relating to their Administration Plan. Each class of shares of the Funds separately bears its respective class-specific transfer agency fees.

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; (ii) purchases and sales of foreign investments, income and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions.

     Net realized and unrealized gain (loss) on foreign currency transactions will represent: (i) foreign exchange gains and losses from the sale and holdings of foreign currencies and sale of investments; (ii) gains and losses between trade date and settlement date on investment securities transactions and forward exchange contracts; and (iii) gains and losses from the difference between amounts of interest recorded and the amounts actually received.

F. 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.

G. Segregation Transactions — The Funds may enter into certain derivative transactions to seek to increase total return. Forward foreign currency exchange contracts, futures contracts, written options, swap contracts, mortgage dollar rolls, when-issued securities and forward commitments represent examples of such transactions. As a result of entering into those transactions, the Funds are required to segregate liquid assets on the accounting records equal to or greater than the market value of the corresponding transactions.

H. 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 a liability on the Fund’s records with the difference between its market value and cash proceeds received being recorded as an unrealized gain or loss. Gains or losses are realized upon delivery of the security.

I. Repurchase Agreements — Repurchase agreements involve the purchase of securities subject to the seller’s agreement to repurchase them at a mutually agreed upon date and price. During the term of a repurchase agreement, the value of the underlying securities held as collateral on behalf of the Funds, including accrued interest, is required to equal or exceed the value of the repurchase agreement, including accrued interest. The underlying securities for all repurchase agreements are held in safekeeping at the Fund’s custodian or designated subcustodians under triparty repurchase agreements.

       65

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

3. AGREEMENTS

     Goldman Sachs Funds Management, L.P. (“GSFM”), a subsidiary of The Goldman Sachs Group, Inc., was renamed Goldman Sachs Asset Management, L.P. (“GSAM”) effective at the end of April 2003 and assumed Goldman, Sachs & Co.’s (“Goldman Sachs”) investment advisory responsibilities under its Investment Management Agreement (the “Agreement”) with the Trust on behalf of the Enhanced Income, Government Income, and Core Fixed Income Funds. The fees payable under the Agreements, and the personnel who manage the Funds, did not change as a result of GSAM’s assumption of responsibilities. GSAM is an affiliate of Goldman Sachs and currently serves as the investment adviser to the Ultra-Short Duration Government Fund and Short Duration Government Fund. Goldman Sachs Asset Management International (“GSAMI”), an affiliate of GSAM, serves as the investment adviser for Global Income. Under the Agreements, the respective adviser, subject to the general supervision of the Trust’s Board of Trustees, manages the Funds’ portfolios.

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

     For the year ended October 31, 2003, the advisers for the Enhanced Income, Government Income and Global Income Funds have voluntarily agreed to waive a portion of their Management Fee, equal to an annual percentage rate of each Fund’s average daily net assets. The advisers may discontinue or modify these waivers in the future at their discretion.

     Additionally, each adviser has voluntarily agreed to limit “Other Expenses” (excluding management fees, distribution and service fees, transfer agent fees and expenses, taxes, interest, brokerage, litigation, service share fees, indemnification costs, shareholder meeting and other extraordinary expenses) to the extent that such expenses exceed, on an annual basis, a percentage rate of the average daily net assets of each Fund.

     For the year ended October 31, 2003, the Funds’ Management Fees, Management Fee waivers and expense limitations (rounded) as an annual percentage rate of average daily net assets is as follows:

	Management Fee
							Other
	Contractual			Waiver			Expense
Fund	Annual Rate			Annual Rate			Limit
Enhanced Income		0.25	%		0.05	%		0.01	%
Ultra-Short Duration Government		0.40			—			0.05
Short Duration Government		0.50			—			0.00
Government Income		0.65			0.11			0.00
Core Fixed Income		0.40			—			0.10
Global Income		0.90			0.25			0.00

66       

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

3. AGREEMENTS (continued)

     Goldman Sachs serves as Distributor of the shares of the Funds pursuant to a Distribution Agreement. Goldman Sachs may receive a portion of the Class A sales load and Class B and Class C contingent deferred sales charges. During the year ended October 31, 2003, Goldman Sachs advised the Funds that it retained approximately the following amounts:

			Contingent Deferred Sales Charge
	Sales Load
Fund	Class A		Class B		Class C
Enhanced Income	$	4,200		N/A		N/A
Ultra-Short Duration Government		128,100		N/A		N/A
Short Duration Government		193,900		—		—
Government Income		128,700	$	200	$	27,900
Core Fixed Income		815,400		200		400
Global Income		58,600		200		—

     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, on an annual basis, to 0.25% for Enhanced Income and Ultra-Short Duration Government Funds Class A shares and 0.25%, 0.75% and 0.75% of each of the other Funds’ average daily net assets attributable to Class A, Class B and Class C shares, respectively. Additionally, Goldman Sachs and/or Authorized Dealers are entitled to receive under the Plans a separate fee for personal and account maintenance services equal to, on an annual basis, 0.25% of the Short Duration Government, Government Income, Core Fixed Income and Global Income Funds average daily net assets attributable to Class A (Global Income only), Class B or Class C Shares. For the year ended October 31, 2003, Goldman Sachs has voluntarily agreed to waive a portion of the Distribution and Service fees equal to 0.15% of the average daily net assets attributable to the Class B shares of Short Duration Government. Goldman Sachs may discontinue or modify this waiver in the future at its discretion.

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

     The Trust, on behalf of the Funds, has adopted a Service Plan and Shareholder Administration Plan for Service shares. In addition, the Trust on behalf of Enhanced Income Fund has adopted an Administration plan for Administration shares. These plans allow for Service and Administration 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, Shareholder Administration Plan and Administration Plan provide for compensation to the service organizations in an amount up to, on an annual basis, 0.25%, 0.25% and 0.25%, respectively, of the average daily net asset value of each share class.

       67

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

3. AGREEMENTS (continued)

     For the year ended October 31, 2003, the advisors and 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 resulting in a reduction of the Funds’ expenses. For the year ended October 31, 2003, expense reductions were as follows (in thousands):

	Waivers
			Class B
			Distribution		Other				Total
	Management		and Service		Expense		Custody		Expense
Fund	Fees		Fees		Reimbursement		Credit		Reductions
Enhanced Income	$	1,076	$	—	$	231	$	17	$	1,324
Ultra-Short Duration Government		—		—		—		23		23
Short Duration Government		—		83		492		1		576
Government Income		596		—		420		3		1,019
Core Fixed Income		—		—		—		14		14
Global Income		1,048		—		575		4		1,627

At October 31, 2003, the amounts owed to affiliates were as follows (in thousands):

			Distribution		Transfer
	Management		and Service		Agent
Fund	Fees		Fees		Fees		Total
Enhanced Income	$	264	$	84	$	103	$	451
Ultra-Short Duration Government		985		172		201		1,358
Short Duration Government		395		218		96		709
Government Income		269		134		74		477
Core Fixed Income		413		147		105		665
Global Income		203		138		48		389

4. PORTFOLIO SECURITY TRANSACTIONS

Cost of purchases and proceeds of sales and maturities of long-term securities for the year ended October 31, 2003, 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)
Enhanced Income	$	627,235,016	$	237,541,445	$	1,247,447,615	$	673,095,150
Ultra-Short Duration Government		3,524,772,789		748,469,829		3,058,999,735		608,221,161
Short Duration Government		2,015,062,324		—		1,571,298,462		246,791
Government Income		2,838,647,189		100,692,961		2,605,873,172		77,478,334
Core Fixed Income		6,336,691,499		814,554,766		6,229,762,714		689,438,952
Global Income		24,414,937		392,125,227		79,990,601		475,365,557

68       

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

4. PORTFOLIO SECURITY TRANSACTIONS (continued)

Option Accounting Principles — When the Fund writes call or put options, an amount equal to the premium received is recorded as an asset and as an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. When a written option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain or loss without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. When a written call option is exercised, the Fund realizes a gain or loss from the sale of the underlying security, and the proceeds of the sale are increased by the premium originally received. When a written put option is exercised, the amount of the premium originally received will reduce the cost of the security which the Fund purchases upon exercise. There is a risk of loss from a change in value of such options which may exceed the related premiums received.

     Upon the purchase of a call option or a protective put option by the Fund, the premium paid is recorded as an investment and subsequently marked-to-market to reflect the current market value of the option. If an option which the Fund has purchased expires on the stipulated expiration date, the Fund will realize a loss in the amount of the cost of the option. If the Fund enters into a closing sale transaction, the Fund will realize a gain or loss, depending on whether the sale proceeds for the closing sale transaction are greater or less than the cost of the option. If the Fund exercises a purchased put option, the Fund will realize a gain or loss from the sale of the underlying security, and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a purchased call option, the cost of the security which the Fund purchases upon exercise will be increased by the premium originally paid.

     For the year ended October 31, 2003, Global Income had the following written options activity:

	Number			Value
Contracts Outstanding October 31, 2003		—		$	—
Contracts written		1,850			9,804
Contracts expired		(1,850	)		(9,804	)
Contracts outstanding October 31, 2003		—		$	—

Futures Contracts — The Funds may enter into futures transactions to hedge against changes in interest rates, securities prices, currency exchange rates (in the case of Core Fixed Income and Global Income) or to seek to increase total return. Futures contracts are valued at the last settlement price at the end of each day on the board of trade or exchange upon which they are traded. Upon entering into a futures contract, the Funds are required to deposit with a broker an amount of cash or securities equal to the minimum “initial margin” requirement of the associated futures exchange. Subsequent payments for futures contracts (“variation margin”) are paid or received by the Funds daily, dependent on the daily fluctuations in the value of the contracts, and are recorded for financial reporting purposes as unrealized gains or losses. When contracts are closed, the 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 the futures contract may not directly correlate with changes in the value of the underlying securities. This risk may decrease the effectiveness of the Funds’ strategies and potentially result in a loss.

     For the year ended October 31, 2003, Enhanced Income, Ultra-Short Duration Government, Short Duration Government, Government Income, and Core Fixed Income paid commissions of approximately $262,000, $533,000, $176,000, $89,000 and $175,000 respectively, in connection with futures contracts entered into with Goldman Sachs.

       69

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

4. PORTFOLIO SECURITY TRANSACTIONS (continued)

     At October 31, 2003, the following futures contracts were open as follows:

		Number of
		Contracts Long								Unrealized
Fund	Type	(Short)			Settlement Month		Market Value			Gain (Loss)
Enhanced Income Fund	Eurodollars		825			December 2003	$	203,795,625		$	256,563
	Eurodollars		930			March 2003		229,372,875			(51,900	)
	Eurodollars		190			June 2003		46,716,250			82,175
	Eurodollars		(100	)		December 2004		(24,373,750	)		(245,500	)
	2 Year U.S. Treasury Notes		(1,238	)		December 2003		(265,512,313	)		(176,061	)
	5 Year U.S. Treasury Notes		(2,101	)		December 2003		(234,918,063	)		(1,664,537	)
							$	(44,919,376	)	$	(1,799,260	)
Ultra-Short Duration Government Fund	Eurodollars		1,765			December 2003	$	435,999,125		$	268,875
	Eurodollars		1,030			March 2004		254,036,625			316,725
	Eurodollars		205			June 2004		50,404,375			68,989
	U.S. Treasury Bonds		350			December 2003		38,051,563			270,811
	10 Year U.S. Treasury Notes		1,100			December 2003		123,526,562			974,611
	2 Year U.S. Treasury Notes		(500	)		December 2003		(107,234,375	)		109,958
	5 Year U.S. Treasury Notes		(5,033	)		December 2003		(562,752,313	)		(2,914,685	)
							$	232,031,562		$	(904,716	)
Short Duration Government Fund	Eurodollars		70			September 2004	$	17,140,375		$	100,775
	Eurodollars		40			December 2004		9,749,500			(820	)
	Eurodollars		40			March 2005		9,709,000			(3,320	)
	Eurodollars		40			June 2005		9,673,000			(4,700	)
	Eurodollars		40			September 2005		9,641,000			(6,700	)
	Eurodollars		(100	)		December 2003		(24,702,500	)		(23,000	)
	Eurodollars		(40	)		March 2004		(9,865,500	)		5,020
	Eurodollars		(40	)		June 2004		(9,835,000	)		11,430
	U.S. Treasury Bonds		115			December 2003		12,502,656			227,668
	2 Year U.S. Treasury Notes		2,244			December 2003		481,267,875			1,027,030
	5 Year U.S. Treasury Notes		(1,610	)		December 2003		(180,018,125	)		(1,467,298	)
	10 Year U.S. Treasury Notes		296			December 2003		33,239,875			204,716
	10 Year Interest Rate Swap		(249	)		December 2003		(27,288,844	)		(556,676	)
							$	331,213,312		$	(485,875	)
Government Income Fund	Eurodollars		180			June 2004	$	44,257,500		$	59,985
	Eurodollars		6			September 2004		1,469,175			6,299
	Eurodollars		6			December 2004		1,462,425			6,945
	Eurodollars		6			March 2005		1,456,350			6,795
	Eurodollars		6			June 2005		1,450,950			7,395
	Eurodollars		6			September 2005		1,446,150			7,470
	Eurodollars		6			December 2005		1,442,175			7,320
	Eurodollars		6			March 2006		1,438,575			7,545
	Eurodollars		(40	)		March 2004		(9,865,500	)		5,020
	U.S. Treasury Bonds		260			December 2003		28,266,875			449,476
	2 Year U.S. Treasury Notes		47			December 2003		10,080,031			26,546
	5 Year U.S. Treasury Notes		(378	)		December 2003		(42,265,125	)		(125,883	)
	10 Year U.S. Treasury Notes		261			December 2003		29,309,484			150,022
	10 Year Interest Rate Swap		(136	)		December 2003		(14,904,750	)		(303,012	)
							$	55,044,315		$	311,923
Core Fixed Income Fund	3 Year Australian Bond		150			June 2004	$	10,738,104			(73,723	)
	Eurodollar		365			June 2004		89,744,375			121,636
	Eurodollar		(120	)		December 2003		(29,643,000	)		4,650
	Eurodollar		(110	)		March 2004		(27,130,125	)		19,780
	U.S. Treasury Bonds		779			December 2003		84,691,906			138,209
	2 Year U.S. Treasury Notes		338			December 2003		72,490,438			141,029
	5 Year U.S. Treasury Notes		207			December 2003		23,144,063			(140,178	)
	10 Year U.S. Treasury Notes		1,486			December 2003		166,873,156			524,806
							$	390,908,917		$	736,209

70       

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

4. PORTFOLIO SECURITY TRANSACTIONS (continued)

		Number of
		Contracts Long								Unrealized
Fund	Type	(Short)			Settlement Month		Market Value			Gain (Loss)
Global Income Fund	10 Year U.S. Treasury Notes		591			December 2003	$	66,367,453		$	529,953
	20 Year U.S. Treasury Bonds		20			December 2003		2,174,375			(46,875	)
	Long Gilt Future		12			December 2003		2,332,831			(64,921	)
	5 Year U.S. Treasury Notes CBT		(829	)		December 2003		(92,692,563	)		(452,594	)
	10 Year Euro Bonds		(155	)		December 2003		(20,316,141	)		180,130
	10 Year Japan Bonds		4			December 2003		4,983,306			58,487
							$	(37,150,739	)	$	204,180

Forward Foreign Currency Exchange Contracts — Core Fixed Income and Global Income 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 Global Income 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. The Funds 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.

     At October 31, 2003, Core Fixed Income had outstanding forward foreign currency exchange contracts to sell foreign currencies as follows:

					Unrealized
Open Forward Foreign Currency	Value on
Sale Contracts	Settlement Date		Current Value		Gain		Loss
Australian Dollar expiring 11/26/03	$	27,672,648	$	28,521,476	$	—	$	848,828

At October 31, 2003, Global Income had outstanding forward foreign currency exchange contracts, both to purchase and sell foreign currencies as follows:

						Unrealized
Open Forward Foreign Currency		Value on
Purchase Contracts		Settlement Date		Current Value		Gain		Loss
Australian Dollar expiring 1/22/04		$	15,045,271	$	15,363,530	$	318,259	$	—
British Pounds expiring 1/22/04			17,192,312		17,393,140		200,828		—
	expiring 1/22/04		1,348,030		1,343,137		—		4,893
Canadian Dollar expiring 1/22/04			1,094,080		1,094,405		325		—
	expiring 1/22/04		1,431,000		1,417,914		—		13,086
Chilean Peso expiring 11/10/03			2,386,000		2,537,902		151,902		—
	expiring 11/12/03		2,846,000		2,964,024		118,024		—
	expiring 12/9/03		566,000		591,395		25,395		—
	expiring 2/3/04		2,125,000		2,130,251		5,251		—
Euro Currency expiring 1/22/04			10,368,561		10,220,908		—		147,653
Hong Kong Dollar expiring 11/7/03			1,471,000		1,477,464		6,464		—
	expiring 11/7/03		14,693,750		14,660,952		—		32,798

       71

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

4. PORTFOLIO SECURITY TRANSACTIONS (continued)

						Unrealized
Open Forward Foreign Currency		Value on
Purchase Contracts		Settlement Date		Current Value		Gain		Loss
Iceland Krona expiring 1/22/04		$	805,736	$	808,952	$	3,216	$	—
Israeli Shekel expiring 1/22/04			994,651		984,242		—		10,409
Japanese Yen expiring 1/22/04			19,066,024		18,942,742		—		123,282
Mexican Peso expiring 1/22/04			4,457,774		4,489,139		31,365		—
Polish Zloty expiring 1/22/04			807,569		794,088		—		13,481
Russian Ruble expiring 12/10/03			12,213,000		12,348,543		135,543		—
Singapore Dollar expiring 1/21/04			2,345,101		2,341,120		—		3,981
Slovakian Koruna expiring 1/22/04			1,709,817		1,703,733		—		6,084
South Korean Won expiring 11/3/03			2,731,000		2,743,527		12,527		—
	expiring 11/19/03		1,797,113		1,754,473		—		42,640
	expiring 11/25/03		1,985,000		1,977,335		—		7,665
	expiring 11/26/03		1,813,000		1,769,222		—		43,778
Swedish Krona expiring 12/18/03			10,585,331		10,560,002		—		25,329
	expiring 1/22/04		22,268,035		21,912,750		—		355,285
Taiwan Dollar expiring 11/25/03			1,669,000		1,676,386		7,386		—
	expiring 11/26/03		2,039,000		2,044,382		5,382		—
	expiring 11/12/03		1,809,000		1,807,581		—		1,419
Thailand Baht expiring 11/28/03			741,650		773,033		31,383		—
	expiring 12/8/03		997,000		1,034,811		37,811		—
	expiring 12/16/03		7,866,894		7,819,754		—		47,140
TOTAL OPEN FORWARD FOREIGN CURRENCY PURCHASE CONTRACTS		$	169,268,699	$	169,480,837	$	1,091,061	$	878,923

						Unrealized
Open Forward Foreign Currency		Value on
Sale Contracts		Settlement Date		Current Value		Gain		Loss
Australian Dollar expiring 11/26/03		$	14,233,226	$	14,672,667	$	—	$	439,441
	expiring 1/22/04		874,597		901,828		—		27,231
British Pounds expiring 11/21/03			20,526,120		20,863,148		—		337,028
Canadian Dollar expiring 12/19/03			7,189,309		7,382,136		—		192,827
	expiring 1/22/04		4,547,000		4,577,043		—		30,043
Chilean Peso expiring 11/10/03			2,494,000		2,573,849		—		79,849
Czech Koruna expiring 1/22/04			696,000		693,311		2,689		—
Danish Krone expiring 11/25/03			3,980,235		3,929,007		51,228		—

72

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

4. PORTFOLIO SECURITY TRANSACTIONS (continued)

						Unrealized
Open Forward Foreign Currency		Value on
Sale Contracts		Settlement Date		Current Value		Gain		Loss
Euro Currency expiring 11/25/03		$	163,348,360	$	161,266,571	$	2,081,789	$	—
	expiring 1/22/04		14,275,014		14,205,673		69,341		—
	expiring 1/22/04		722,293		722,773		—		480
Hong Kong Dollar expiring 11/7/03			16,070,472		16,138,416		—		67,944
Japanese Yen expiring 12/5/03			57,327,699		56,476,662		851,037		—
	expiring 1/22/04		3,440,000		3,424,951		15,049		—
	expiring 1/22/04		3,448,632		3,454,731		—		6,099
Mexican Peso expiring 1/22/04			4,525,127		4,595,497		—		70,370
New Zealand Dollar expiring 1/22/04			2,761,772		2,813,724		—		51,952
Norwegian Krone expiring 12/1/03			6,911,353		6,890,814		20,539		—
Polish Zloty expiring 1/22/04			2,072,000		2,035,988		36,012		—
Singapore Dollar expiring 1/21/04			12,636,373		12,640,961		—		4,588
South African Rand expiring 12/11/03			3,617,506		3,685,231		—		67,725
	expiring 1/22/04		888,000		921,452		—		33,452
South Korean Won expiring 11/3/03			2,404,000		2,342,449		61,551		—
	expiring 11/17/03		178,052		172,906		5,146		—
	expiring 11/19/03		1,780,000		1,767,592		12,408		—
	expiring 11/3/03		352,000		353,246		—		1,246
	expiring 11/19/03		1,749,000		1,752,189		—		3,189
	expiring 11/25/03		863,000		865,592		—		2,592
Russian Ruble expiring 12/8/03			838,000		834,001		3,999		—
	expiring 12/10/03		7,830,000		7,820,253		9,747		—
Swedish Krona expiring 1/22/04			3,440,000		3,403,644		36,356		—
	expiring 12/18/03		11,542,173		12,036,092		—		493,919
Swiss Franc expiring 1/22/04			17,327,184		17,109,998		217,186		—
Taiwan Dollar expiring 11/26/03			2,020,000		2,025,263		—		5,263
Thailand Baht expiring 12/2/03			1,752,716		1,801,482		—		48,766
	expiring 12/16/03		495,328		516,719		—		21,391
	expiring 1/22/04		4,136,000		4,138,597		—		2,597
TOTAL OPEN FORWARD FOREIGN CURRENCY SALE CONTRACTS		$	403,292,541	$	401,806,456	$	3,474,077	$	1,987,992

73

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

4. PORTFOLIO SECURITY TRANSACTIONS (continued)

						Unrealized
Foreign Forward Currency Cross		Purchase		Sale
Contracts (Purchase/Sale)		Current Value		Current Value		Gain		Loss
Czech Koruna/Euro Currency expiring 1/22/04		$	1,718,459	$	1,737,576	$	19,117	$	—
Euro Currency/Czech Koruna expiring 1/22/04			1,737,576		1,725,050		—		12,526
Euro Currency/Polish Zloty expiring 1/22/04			1,540,197		1,527,785		—		12,412
Euro Currency/Slovakian Koruna expiring 1/22/04			1,778,062		1,801,492		23,430		—
Japanese Yen/Swiss Franc expiring 1/22/04			986,813		973,779		—		13,034
	expiring 1/22/04		967,963		983,064		15,101		—
Polish Zloty/Euro Currency Expiring 1/22/04			1,507,869		1,540,197		32,328		—
Slovakian Koruna/Euro Currency Expiring 1/22/04			1,801,492		1,771,221		—		30,271
Swiss Franc/Japanese Yen Expiring 1/22/04			978,471		986,813		8,342		—
	Expiring 1/22/04		983,063		978,471		—		4,592
TOTAL OPEN FORWARD FOREIGN CURRENCY CROSS CONTRACTS (PURCHASE/SALE)		$	13,999,965	$	14,025,448	$	98,318	$	72,835

     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, 2003, Core Fixed Income and Global Income had sufficient cash and/or securities to cover any commitments under these contracts.

Swap Contracts — The Funds may enter into swap transactions for hedging purposes or to seek to increase total return. A 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 specified prices or rates for a specified amount of an underlying asset or notional principal amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other.

     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 interest 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 swap 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.

     With respect to periodic payment swaps only, the Funds record a net receivable or payable on a daily basis for the net interest income or expense expected to be received or paid. Net interest received or paid on these contracts is recorded as interest income (or as an offset to interest income). With respect to swap payments only at maturity, interest paid or received, if any, is included in the valuation of the swaps and not recorded as interest income (or as an offset to interest income).

     Fluctuations in the value of swap contracts are recorded for financial statement purposes as unrealized appreciation or depreciation on swap contracts. Realized gains and losses from terminated swaps are included in net realized gains/losses on swap contracts. At October 31, 2003, Core Fixed Income Fund had outstanding swap contracts with the following terms:

74

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

4. PORTFOLIO SECURITY TRANSACTIONS (continued)

					Rate Type
		Notional			Payments		Payments	Unrealized
	Swap	Amount	Termination		made by		received by	Appreciation/
Swap Type	Counterparty	(000s)	Date		the Fund		the Fund	(Depreciation)
Interest Rate	Banc of America Securities LLC	$32,000		06/19/2012		5.4125%	3 month LIBOR Floating	$	(2,091,762	)
Interest Rate	Banc of America Securities LLC	55,800		06/20/2012		5.4076%	3 month LIBOR Floating		(3,626,536	)
Interest Rate	Banc of America Securities LLC	14,200		06/25/2012		5.2755%	3 month LIBOR Floating		(784,778	)
Interest Rate	Banc of America Securities LLC	26,000		07/05/2012		5.2886%	3 month LIBOR Floating		(1,456,829	)
Interest Rate	Banc of America Securities LLC	30,000		12/10/2012		4.56123%	3 month LIBOR Floating		68,107
Total Return CMBS AAA 10 YR Index	Banc of America Securities LLC	62,400		12/18/2003		1.03875%	N/A		(2,585,153	)
								$	(10,476,951	)

LIBOR — London Interbank Offered Rate

5. JOINT REPURCHASE AGREEMENT ACCOUNT

The Funds, together with other registered investment companies having management agreements with GSAMI and GSAM or their affiliates, transfer uninvested cash into joint accounts, the daily aggregate balance of which is invested in one or more repurchase agreements.

     At October 31, 2003, Enhanced Income, Ultra-Short Duration Government, Short Duration Government, Government Income and Core Fixed Income had undivided interests in the following Joint Repurchase Agreement Account II which equaled $23,800,000, $166,500,000, $50,900,000, $63,600,000, and $63,100,000, respectively, in principal amount. At October 31, 2003, the following repurchase agreements held in this joint account were fully collateralized by Federal Agency obligations.

	Principal		Interest			Maturity	Maturity
Repurchase Agreements	Amount		Rate			Date	Value
Banc of America Securities LLC	$	100,000,000		1.06	%	11/03/2003	$	100,008,833
Barclays Capital LLC		500,000,000		1.06		11/03/2003		500,044,167
Credit Suisse First Boston Corp.		300,000,000		1.06		11/03/2003		300,026,500
Deutsche Bank Securities, Inc.		420,000,000		1.06		11/03/2003		420,037,100
Greenwich Capital Markets		300,000,000		1.06		11/03/2003		300,026,500
Lehman Brothers, Inc.		250,000,000		1.13		11/03/2003		250,023,438
J.P Morgan Chase & Co.		345,300,000		1.07		11/03/2003		345,330,789
UBS LLC		600,000,000		1.04		11/03/2003		600,052,000
Westdeutsche Landesbank AG		175,000,000		1.06		11/03/2003		175,015,458
TOTAL JOINT REPURCHASE AGREEMENT ACCOUNT II	$	2,990,300,000					$	2,990,564,785

       75

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

6. LINE OF CREDIT FACILITY

The Funds participate in a $350,000,000 committed, unsecured revolving line of credit facility. Under the most restrictive arrangement, each Fund must own securities having a market value in excess of 400% of the total bank borrowings. This facility is to be used solely for temporary or emergency purposes. The interest rate on borrowings is based on the federal funds rate. 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. During the year ended October 31, 2003, the Funds did not have any borrowings under this facility.

7. OTHER MATTERS

As of October 31, 2003, Goldman, Sachs & Co. Profit Sharing Master Trust was the beneficial owner of approximately 5.9% of the outstanding shares of the Short Duration Government Fund and the Goldman Sachs Growth and Income Strategy Fund was the beneficial owner of approximately 17.1% of the Global Income Fund.

8. ADDITIONAL TAX INFORMATION

     The tax character of distributions paid during the fiscal year ended October 31, 2003 was as follows:

				Ultra-Short
		Enhanced		Duration		Short Duration		Government		Core Fixed
		Income		Government		Government		Income		Income		Global Income
Distributions paid from:
Ordinary income		$	75,099,862	$	138,630,666	$	30,119,028	$	18,232,169	$	52,513,002	$	21,179,925
Net long-term capital gains			—		—		—		488,233		988,773		—
	Total taxable distributions	$	75,099,862	$	138,630,666	$	30,119,028	$	18,720,402	$	53,501,775	$	21,179,925

The tax character of distributions paid during the fiscal year ended October 31, 2002 was as follows:

				Ultra-Short
		Enhanced		Duration		Short Duration		Government		Core Fixed
		Income		Government		Government		Income		Income		Global Income
Distributions paid from:
Ordinary income		$	85,437,754	$	80,789,289	$	20,975,434	$	12,570,263	$	50,184,118	$	18,193,649
Net long-term capital gains			—		—		—		1,982,341		2,633,802		—
	Total taxable distributions	$	85,437,754	$	80,789,289	$	20,975,434	$	14,552,604	$	52,817,920	$	18,193,649

     As of October 31, 2003, the components of accumulated earnings (losses) on a tax basis were as follows:

						Ultra-Short
			Enhanced			Duration			Short Duration			Government			Core Fixed
			Income			Government			Government			Income			Income			Global Income
Undistributed ordinary income — net			$	3,563,099		$	15,304,326		$	3,619,327		$	4,367,706		$	29,028,177		$	30,286,294
Undistributed long-term capital gains				—			—			—			2,396,443			14,858,564			—
	Total undistributed earnings		$	3,563,099		$	15,304,326		$	3,619,327		$	6,764,149		$	43,886,741		$	30,286,294
	Capital loss carryforward			(73,628,498	)		(116,530,177	)		(9,409,373	)		—			—			(59,488,201	)
	Timing differences (dividends payable,
		straddles)		(290,091	)		(2,266,374	)		(548,843	)		(147,665	)		(1,365,552	)		(1,777,571	)
	Unrealized gains (losses) — net			21,618,780			(14,412,061	)		(4,038,891	)		576,675			(947,726	)		20,549,268
	Total accumulated earnings (losses) — net		$	(48,736,710	)	$	(117,904,286	)	$	(10,377,780	)	$	7,193,159		$	41,573,463		$	(10,430,210	)
	Capital loss carryforward years of
		expiration		2009-2010			2004-2011			2004-2011			n/a			n/a			2010-2011

76       

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

8. ADDITIONAL TAX INFORMATION (continued)

     At October 31, 2003, the Funds’ aggregate security unrealized gains and losses based on cost for U.S. federal income tax purposes was as follows:

					Ultra-Short
					Duration			Short Duration			Government			Core Fixed
		Enhanced Income			Government			Government			Income			Income			Global Income
Tax Cost		$	1,501,720,093		$	2,824,914,505		$	926,748,246		$	632,286,899		$	1,343,051,914		$	331,335,875
Gross unrealized gain			25,439,556			8,627,674			3,697,178			3,462,259			173,871,684			21,600,325
Gross unrealized loss			(3,820,776	)		(23,039,735	)		(7,736,039	)		(2,885,584	)		(163,497,166	)		(1,534,155	)
	Net unrealized security gain (loss)	$	21,618,780		$	(14,412,061	)	$	(4,038,891	)	$	576,675		$	10,374,518		$	20,066,170

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

9. CERTAIN RECLASSIFICATIONS

In order to present the capital accounts on a tax basis, certain reclassifications have been recorded to the Fund’s accounts. These reclassifications have no impact on the net asset value of the Funds and are designed to present the Funds’ capital accounts on a tax basis. Reclassifications result primarily from the difference in the tax treatment of foreign currency, expiration of capital loss carryforwards, and tax treatment of certain bonds.

							Accumulated
				Accumulated			Undistributed
				Net Realized			Net Investment
Fund	Paid-in Capital			Gain (Loss)			Income
Ultra-Short Duration Government	$	(9,908,454	)	$	(34,476,052	)	$	44,384,506
Short Duration Government		(1,876,525	)		1,292,589			583,936
Government Income		—			(3,963,260	)		3,963,260
Core Fixed Income		—			(1,517,476	)		1,517,476
Global Income		—			(30,424,402	)		30,424,402

77

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

10. SUMMARY OF SHARE TRANSACTIONS

Share activity for the year ended October 31, 2003 is as follows:

	Enhanced Income Fund						Ultra-Short Duration Government Fund
	Shares			Dollars			Shares			Dollars
Class A Shares
Shares sold		65,456,177		$	661,622,273			146,423,912		$	1,410,435,060
Reinvestment of dividends and distributions		1,684,399			16,999,110			2,803,599			26,881,638
Shares repurchased		(109,315,236	)		(1,103,682,746	)		(171,594,868	)		(1,646,981,161	)
		(42,174,660	)		(425,061,363	)		(22,367,357	)		(209,664,463	)
Class B Shares
Shares sold		—			—			—			—
Reinvestment of dividends and distributions		—			—			—			—
Shares repurchased		—			—			—			—
		—			—			—			—
Class C Shares
Shares sold		—			—			—			—
Reinvestment of dividends and distributions		—			—			—			—
Shares repurchased		—			—			—			—
		—			—			—			—
Institutional Shares
Shares sold		117,184,438			1,181,967,068			244,394,701			2,357,120,730
Reinvestment of dividends and distributions		4,854,670			48,898,987			8,104,579			77,851,495
Shares repurchased		(215,827,653	)		(2,176,366,565	)		(318,463,748	)		(3,059,004,328	)
		(93,788,545	)		(945,500,510	)		(65,964,468	)		(624,032,103	)
Administration Shares
Shares sold		4,347,061			43,528,534			—			—
Reinvestment of dividends and distributions		62,718			631,730			—			—
Shares repurchased		(1,231,150	)		(12,379,974	)		—			—
		3,178,629			31,780,290			—			—
Service Shares
Shares sold		—			—			9,363,528			90,437,843
Reinvestment of dividends and distributions		—			—			211,958			2,036,535
Shares repurchased		—			—			(6,172,110	)		(59,334,139	)
		—			—			3,403,376			33,140,239
NET INCREASE (DECREASE)		(132,784,576	)	$	(1,338,781,583	)		(84,928,449	)	$	(800,556,327	)

78

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

Short Duration Government Fund						Government Income Fund						Core Fixed Income Fund						Global Income Fund
Shares			Dollars			Shares			Dollars			Shares			Dollars			Shares			Dollars
	34,679,335		$	349,718,569			28,548,952		$	427,867,919			32,936,995		$	339,155,806			7,145,801		$	104,771,082
	781,611			7,869,461			673,983			10,093,885			1,308,325			13,467,379			743,869			10,862,519
	(28,060,554	)		(282,600,578	)		(21,797,608	)		(326,251,585	)		(22,423,478	)		(230,101,755	)		(10,118,711	)		(147,811,286	)
	7,400,392			74,987,452			7,425,327			111,710,219			11,821,842			122,521,430			(2,229,041	)		(32,177,685	)
	2,172,651			21,866,144			957,324			14,345,247			1,167,578			12,048,230			344,355			5,032,023
	107,486			1,079,118			66,703			999,317			90,401			933,176			98,367			1,431,750
	(2,141,898	)		(21,476,988	)		(1,478,691	)		(22,110,142	)		(1,249,253	)		(12,887,682	)		(510,983	)		(7,457,687	)
	138,239			1,468,274			(454,664	)		(6,765,578	)		8,726			93,724			(68,261	)		(993,914	)
	9,579,035			96,198,651			2,079,385			31,166,416			1,570,710			16,243,528			196,341			2,870,475
	187,872			1,881,220			34,855			521,783			64,748			668,654			27,470			399,145
	(6,148,788	)		(61,591,248	)		(2,131,999	)		(31,887,869	)		(1,178,563	)		(12,186,099	)		(246,752	)		(3,590,641	)
	3,618,119			36,488,623			(17,759	)		(199,670	)		456,895			4,726,083			(22,941	)		(321,021	)
	43,186,720			435,088,652			8,277,365			124,464,068			27,124,226			280,669,851			1,939,705			28,441,267
	1,155,806			11,609,130			313,592			4,689,493			2,178,746			22,476,578			348,867			5,086,936
	(30,437,226	)		(306,089,408	)		(3,947,560	)		(59,134,765	)		(34,831,812	)		(359,173,888	)		(5,990,141	)		(87,902,975	)
	13,905,300			140,608,374			4,643,397			70,018,796			(5,528,840	)		(56,027,459	)		(3,701,569	)		(54,374,772	)
	—			—			—			—			—			—			—			—
	—			—			—			—			—			—			—			—
	—			—			—			—			—			—			—			—
	—			—			—			—			—			—			—			—
	387,334			3,885,612			305,762			4,568,405			679,136			6,997,755			3,968			58,696
	31,215			313,455			28,019			418,928			92,861			956,914			2,736			39,883
	(937,230	)		(9,409,189	)		(348,556	)		(5,207,467	)		(1,610,472	)		(16,556,114	)		(46,997	)		(694,082	)
	(518,681	)		(5,210,122	)		(14,775	)		(220,134	)		(838,475	)		(8,601,445	)		(40,293	)		(595,503	)
	24,543,369		$	248,342,601			11,581,526		$	174,543,633			5,920,148		$	62,712,333			(6,062,105	)	$	(88,462,895	)

79

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Notes to Financial Statements (continued)

October 31, 2003

10. SUMMARY OF SHARE TRANSACTIONS (continued)

Share activity for the year ended October 31, 2002 is as follows:

							Ultra-Short Duration
	Enhanced Income Fund						Government Fund(a)
	Shares			Dollars			Shares			Dollars
Class A Shares
Shares sold		122,663,688		$	1,252,634,163			173,928,804		$	1,693,236,866
Reinvestment of dividends and distributions		1,813,242			18,481,732			1,598,713			15,534,653
Shares repurchased		(59,197,348	)		(603,744,740	)		(77,993,344	)		(757,628,525	)
		65,279,582			667,371,155			97,534,173			951,142,994
Class B Shares
Shares sold		—			—			—			—
Reinvestment of dividends and distributions		—			—			—			—
Shares repurchased		—			—			—			—
		—			—			—			—
Class C Shares
Shares sold		—			—			—			—
Reinvestment of dividends and distributions		—			—			—			—
Shares repurchased		—			—			—			—
		—			—			—			—
Institutional Shares
Shares sold		317,156,233			3,236,186,654			336,522,286			3,281,183,489
Reinvestment of dividends and distributions		6,003,071			61,138,628			4,888,840			47,583,604
Shares repurchased		(197,216,984	)		(2,009,145,039	)		(96,319,230	)		(936,816,171	)
		125,942,320			1,288,180,243			245,091,896			2,391,950,922
Administration Shares
Shares sold		1,787,859			18,171,712			—			—
Reinvestment of dividends and distributions		31,081			316,599			—			—
Shares repurchased		(464,241	)		(4,715,809	)		—			—
		1,354,699			13,772,502			—			—
Service Shares
Shares sold		—			—			3,248,777			31,686,726
Reinvestment of dividends and distributions		—			—			136,008			1,327,887
Shares repurchased		—			—			(2,911,091	)		(28,346,936	)
		—			—			473,694			4,667,677
NET INCREASE (DECREASE)		192,576,601		$	1,969,323,900			343,099,763		$	3,347,761,593

(a)  Effective July 1, 2002, the Fund’s name changed from the Goldman Sachs Adjustable Rate Government Fund to the Goldman Sachs Ultra-Short Duration Government Fund.

80       

GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS 

Short Duration Government Fund						Government Income Fund						Core Fixed Income Fund						Global Income Fund
Shares			Dollars			Shares			Dollars			Shares			Dollars			Shares			Dollars
	27,906,211		$	279,236,875			17,642,570		$	259,436,060			24,364,554		$	243,320,354			5,737,318		$	82,397,763
	498,538			4,992,184			573,380			8,366,801			1,010,017			10,086,544			603,238			8,647,326
	(12,826,001	)		(127,931,659	)		(11,130,591	)		(163,658,944	)		(11,482,987	)		(114,650,715	)		(7,986,029	)		(114,695,562	)
	15,578,748			156,297,400			7,085,359			104,143,917			13,891,584			138,756,183			(1,645,473	)		(23,650,473	)
	4,094,837			40,907,455			1,837,705			27,055,328			1,699,524			17,036,276			806,684			11,555,242
	65,513			654,319			78,388			1,142,452			84,774			849,179			66,121			945,211
	(895,816	)		(8,919,953	)		(771,028	)		(11,272,400	)		(816,744	)		(8,159,758	)		(394,632	)		(5,647,894	)
	3,264,534			32,641,821			1,145,065			16,925,380			967,554			9,725,697			478,173			6,852,559
	8,883,600			88,628,725			1,316,961			19,372,765			1,271,395			12,743,473			331,469			4,742,441
	82,936			826,899			35,164			512,328			55,166			552,706			17,732			253,025
	(1,372,203	)		(13,633,367	)		(663,009	)		(9,705,479	)		(495,235	)		(4,959,298	)		(133,559	)		(1,906,909	)
	7,594,333			75,822,257			689,116			10,179,614			831,326			8,336,881			215,642			3,088,557
	26,214,688			260,941,463			4,474,897			65,759,397			55,515,013			557,216,053			795,376			11,409,421
	873,822			8,717,696			106,179			1,544,218			2,793,165			27,950,398			392,090			5,614,780
	(19,887,189	)		(198,127,181	)		(1,394,128	)		(20,174,314	)		(28,472,506	)		(284,536,921	)		(3,568,016	)		(51,153,848	)
	7,201,321			71,531,978			3,186,948			47,129,301			29,835,672			300,629,530			(2,380,550	)		(34,129,647	)
	—			—			—			—			—			—			—			—
	—			—			—			—			—			—			—			—
	—			—			—			—			—			—			—			—
	—			—			—			—			—			—			—			—
	692,902			6,945,100			331,195			4,850,686			1,133,120			11,369,835			38,296			551,514
	35,294			351,602			33,642			489,293			133,364			1,334,953			3,515			50,303
	(405,761	)		(4,047,693	)		(195,154	)		(2,862,277	)		(911,771	)		(9,104,849	)		(53,954	)		(773,230	)
	322,435			3,249,009			169,683			2,477,702			354,713			3,599,939			(12,143	)		(171,413	)
	33,961,371		$	339,542,465			12,276,171		$	180,855,914			45,880,849		$	461,048,230			(3,344,351	)	$	(48,010,417	)

       81

 GOLDMAN SACHS ENHANCED INCOME FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Period

										Distributions
			Income (loss) from							to
			investment operations							shareholders
	Net asset
	value,		Net		Net realized			Total from		From net			Net asset
	beginning		investment		and unrealized			investment		investment			value, end
	of period		income(c)		gain (loss)			operations		income			of period
FOR THE YEARS ENDED OCTOBER 31,
2003 - Class A Shares	$	10.13	$	0.33	$	(0.15	)	$	0.18	$	(0.32	)	$	9.99
2003 - Institutional Shares		10.12		0.37		(0.15	)		0.22		(0.36	)		9.98
2003 - Administration Shares		10.13		0.33		(0.14	)		0.19		(0.33	)		9.99
2002 - Class A Shares		10.26		0.38		(0.13	)		0.25		(0.38	)		10.13
2002 - Institutional Shares		10.26		0.42		(0.14	)		0.28		(0.42	)		10.12
2002 - Administration Shares		10.27		0.40		(0.14	)		0.26		(0.40	)		10.13
2001 - Class A Shares		10.00		0.45		0.34			0.79		(0.53	)		10.26
2001 - Institutional Shares		10.00		0.55		0.28			0.83		(0.57	)		10.26
2001 - Administration Shares		10.00		0.49		0.32			0.81		(0.54	)		10.27
FOR THE PERIOD ENDED OCTOBER 31,
2000 - Class A Shares (commenced August 2, 2000)		10.00		0.11		0.06			0.17		(0.17	)		10.00
2000 - Institutional Shares (commenced August 2, 2000)		10.00		0.16		0.01			0.17		(0.17	)		10.00
2000 - Administration Shares (commenced August 2, 2000)		10.00		0.15		0.02			0.17		(0.17	)		10.00

(a)	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.
(b)	Annualized.
(c)	Calculated based on the average shares outstanding methodology.

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

GOLDMAN SACHS ENHANCED INCOME FUND 

											Ratios assuming no
											expense reductions
								Ratio of						Ratio of
			Net assets		Ratio of			net investment			Ratio of			net investment
			at end of		net expenses			income to			expenses			income to			Portfolio
Total			period		to average			average net			to average			average net			turnover
return(a)			(in 000s)		net assets			assets			net assets			assets			rate
	1.77	%	$	378,378		0.65	%		3.28	%		0.71	%		3.22	%		41	%
	2.18			1,106,956		0.25			3.65			0.31			3.59			41
	1.93			50,463		0.50			3.34			0.56			3.28			41
	2.48			810,768		0.65			3.70			0.72			3.63			65
	2.79			2,071,378		0.25			4.17			0.32			4.10			65
	2.53			18,965		0.50			3.91			0.57			3.84			65
	8.10			151,497		0.65			4.60			0.80			4.45			127
	8.53			807,871		0.25			5.40			0.40			5.25			127
	8.35			5,320		0.50			4.80			0.65			4.65			127
	1.66			12,336		0.65	(b)		4.52	(b)		1.77	(b)		3.40	(b)		31
	1.76			156,525		0.25	(b)		6.49	(b)		1.37	(b)		5.37	(b)		31
	1.68			2		0.50	(b)		6.13	(b)		1.62	(b)		5.01	(b)		31

83

 GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Year

			Income (loss) from								Distributions to
			investment operations								shareholders
	Net asset
	value,		Net			Net realized			Total from		From net
	beginning		investment			and unrealized			investment		investment			From			Total
	of year		income			gain (loss)			operations		income			capital			distributions
FOR THE YEARS ENDED OCTOBER 31,
2003 - Class A Shares	$	9.66	$	0.24	(c)	$	(0.11	)	$	0.13	$	(0.32	)	$	—		$	(0.32	)
2003 - Institutional Shares		9.68		0.28	(c)		(0.12	)		0.16		(0.36	)		—			(0.36	)
2003 - Service Shares		9.69		0.23	(c)		(0.11	)		0.12		(0.31	)		—			(0.31	)
2002 - Class A Shares		9.79		0.31	(c)(f)		(0.06	)(f)		0.25		(0.38	)		—			(0.38	)
2002 - Institutional Shares		9.81		0.35	(c)(f)		(0.06	)(f)		0.29		(0.42	)		—			(0.42	)
2002 - Service Shares		9.82		0.31	(c)(f)		(0.07	)(f)		0.24		(0.37	)		—			(0.37	)
2001 - Class A Shares		9.56		0.53	(c)		0.23			0.76		(0.53	)		—			(0.53	)
2001 - Institutional Shares		9.58		0.56	(c)		0.24			0.80		(0.57	)		—			(0.57	)
2001 - Service Shares		9.58		0.42	(c)		0.34			0.76		(0.52	)		—			(0.52	)
2000 - Class A Shares		9.63		0.54	(c)		(0.06	)		0.48		(0.55	)		—			(0.55	)
2000 - Institutional Shares		9.64		0.58	(c)		(0.05	)		0.53		(0.59	)		—			(0.59	)
2000 - Service Shares		9.65		0.52	(c)		(0.05	)		0.47		(0.54	)		—			(0.54	)
1999 - Class A Shares		9.69		0.49			(0.05	)		0.44		(0.44	)		(0.06	)		(0.50	)
1999 - Institutional Shares		9.70		0.53			(0.05	)		0.48		(0.48	)		(0.06	)		(0.54	)
1999 - Administration Shares(e)		9.70		0.37	(c)		0.01			0.38		(0.33	)		(0.04	)		(0.37	)
1999 - Service Shares		9.70		0.48			(0.04	)		0.44		(0.43	)		(0.06	)		(0.49	)

(a)	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. 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.
(b)	Annualized.
(c)	Calculated based on the average shares outstanding methodology.
(d)	Includes the effect of mortgage dollar roll transactions.
(e)	Administration Class shares were liquidated on July 20, 1999. Ending net asset value shown as of July 20, 1999.

(f)  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 $0.05, increase net realized and unrealized gains and losses per share by $0.05, and decrease the ratio of net investment income to average net asset with and without expense reductions by 0.48%. Per share ratios and supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.

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

GOLDMAN SACHS ULTRA-SHORT DURATION GOVERNMENT 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			expenses			income to			Portfolio
value, end			Total			year		to average			average net			to average			average net			turnover
of year			return(a)			(in 000s)		net assets			assets			net assets			assets			rate(d)
$	9.47			1.40	%	$	768,910		0.86	%		2.55	%		0.86	%		2.55	%		102	%
	9.48			1.69			1,967,845		0.46			2.95			0.46			2.95			102
	9.50			1.29			67,480		0.96			2.43			0.96			2.43			102
	9.66			2.57			1,000,977		0.88			3.21	(f)		0.88			3.21	(f)		144
	9.68			2.98			2,646,847		0.48			3.65	(f)		0.48			3.65	(f)		144
	9.69			2.46			35,883		0.98			3.20	(f)		0.98			3.20	(f)		144
	9.79			8.21			59,209		0.89			5.48			0.97			5.40			87
	9.81			8.62			278,316		0.49			5.79			0.57			5.71			87
	9.82			8.19			31,698		0.99			4.52			1.07			4.44			87
	9.56			5.12			41,188		0.89			5.67			0.96			5.60			11
	9.58			5.65			176,881		0.49			6.01			0.56			5.94			11
	9.58			4.95			71		0.99			5.33			1.06			5.26			11
	9.63			4.65			22,862		0.89			5.15			0.93			5.11			39
	9.64			5.06			315,024		0.49			5.49			0.53			5.45			39
	9.71	(e)		4.02			—		0.74	(b)		5.35	(b)		0.78	(b)		5.31	(b)		39
	9.65			4.65			797		0.99			4.99			1.03			4.95			39

85

 GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND

Financial Highlights

Selected Data for a Share Outstanding Throughout Each Year

			Income (loss) from								Distributions to
			investment operations								shareholders
	Net asset
	value,		Net			Net realized			Total from		From net			Net asset
	beginning		investment			and unrealized			investment		investment			value, end
	of year		income			gains (loss)			operations		income			of year
FOR THE YEARS ENDED OCTOBER 31,
2003 - Class A Shares	$	10.12	$	0.35	(c)	$	(0.14	)	$	0.21	$	(0.34	)	$	9.99
2003 - Class B Shares		10.09		0.29	(c)		(0.15	)		0.14		(0.28	)		9.95
2003 - Class C Shares		10.07		0.27	(c)		(0.14	)		0.13		(0.27	)		9.93
2003 - Institutional Shares		10.10		0.39	(c)		(0.15	)		0.24		(0.38	)		9.96
2003 - Service Shares		10.09		0.34	(c)		(0.15	)		0.19		(0.33	)		9.95
2002 - Class A Shares		10.04		0.37	(c)(f)		0.14	(f)		0.51		(0.43	)		10.12
2002 - Class B Shares		10.01		0.31	(c)(f)		0.14	(f)		0.45		(0.37	)		10.09
2002 - Class C Shares		9.99		0.28	(c)(f)		0.16	(f)		0.44		(0.36	)		10.07
2002 - Institutional Shares		10.02		0.42	(c)(f)		0.13	(f)		0.55		(0.47	)		10.10
2002 - Service Shares		10.01		0.37	(c)(f)		0.13	(f)		0.50		(0.42	)		10.09
2001 - Class A Shares		9.49		0.51	(c)		0.60			1.11		(0.56	)		10.04
2001 - Class B Shares		9.46		0.47	(c)		0.58			1.05		(0.50	)		10.01
2001 - Class C Shares		9.45		0.44	(c)		0.58			1.02		(0.48	)		9.99
2001 - Institutional Shares		9.47		0.57	(c)		0.58			1.15		(0.60	)		10.02
2001 - Service Shares		9.46		0.53	(c)		0.57			1.10		(0.55	)		10.01
2000 - Class A Shares		9.57		0.59	(c)		(0.07	)		0.52		(0.60	)		9.49
2000 - Class B Shares		9.56		0.53	(c)		(0.09	)		0.44		(0.54	)		9.46
2000 - Class C Shares		9.54		0.51	(c)		(0.07	)		0.44		(0.53	)		9.45
2000 - Institutional Shares		9.57		0.63	(c)		(0.09	)		0.54		(0.64	)		9.47
2000 - Service Shares		9.56		0.58	(c)		(0.09	)		0.49		(0.59	)		9.46
1999 - Class A Shares		9.91		0.55			(0.36	)		0.19		(0.53	)		9.57
1999 - Class B Shares		9.88		0.48			(0.33	)		0.15		(0.47	)		9.56
1999 - Class C Shares		9.88		0.47			(0.36	)		0.11		(0.45	)		9.54
1999 - Institutional Shares		9.90		0.59			(0.35	)		0.24		(0.57	)		9.57
1999 - Administration Shares(e)		9.91		0.40	(c)		(0.25	)		0.15		(0.39	)		9.67	(e)
1999 - Service Shares		9.89		0.54			(0.35	)		0.19		(0.52	)		9.56

(a)	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. 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.
(b)	Annualized.
(c)	Calculated based on the average shares outstanding methodology.
(d)	Includes the effect of mortgage dollar roll transactions.
(e)	Administration Class shares were liquidated on July 20, 1999. Ending net asset value shown as of July 20, 1999.

(f)  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 reduction by 0.63%. Per share ratios and supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.

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

GOLDMAN SACHS SHORT DURATION GOVERNMENT FUND 

											Ratios assuming no
											expense reductions
								Ratio of						Ratio of
			Net assets		Ratio of			net investment			Ratio of			net investment
			at end of		net expenses			income to			expenses			income to			Portfolio
Total			year		to average			average net			to average			average net			turnover
return(a)			(in 000s)		net assets			assets			net assets			assets			rate(d)
	2.11	%	$	317,379		0.95	%		3.46	%		1.01	%		3.40	%		184	%
	1.41			50,580		1.55			2.87			1.76			2.66			184
	1.26			130,087		1.70			2.71			1.76			2.65			184
	2.43			415,210		0.55			3.86			0.61			3.80			184
	1.92			6,156		1.05			3.36			1.11			3.30			184
	5.26			246,763		0.94			3.69	(f)		1.04			3.59	(f)		194
	4.65			49,874		1.54			3.09	(f)		1.79			2.84	(f)		194
	4.50			95,458		1.69			2.84	(f)		1.79			2.74	(f)		194
	5.69			280,452		0.54			4.20	(f)		0.64			4.10	(f)		194
	5.17			11,471		1.04			3.70	(f)		1.14			3.60	(f)		194
	12.00			88,394		0.94			5.26			1.11			5.09			243
	11.38			16,809		1.54			4.80			1.86			4.48			243
	11.12			18,871		1.69			4.59			1.86			4.42			243
	12.47			206,129		0.54			5.89			0.71			5.72			243
	11.93			8,154		1.04			5.40			1.21			5.23			243
	5.65			29,446		0.94			6.21			1.13			6.02			130
	4.80			5,743		1.54			5.63			1.88			5.29			130
	4.76			5,128		1.69			5.45			1.88			5.26			130
	5.85			131,462		0.54			6.64			0.73			6.45			130
	5.32			6,134		1.04			6.14			1.23			5.95			130
	1.97			52,235		0.94			5.61			1.07			5.48			173
	1.56			6,937		1.54			5.04			1.82			4.76			173
	1.21			7,029		1.69			4.83			1.82			4.70			173
	2.49			146,062		0.54			6.03			0.67			5.90			173
	1.57			—		0.79	(b)		5.76	(b)		0.92	(b)		5.63	(b)		173
	1.97			6,605		1.04			5.54			1.17			5.41			173

87

 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
	of year		income			gain (loss)			operations			income			gains			distributions
FOR THE YEARS ENDED OCTOBER 31,
2003 - Class A Shares	$	14.95	$	0.41	(b)	$	0.05		$	0.46		$	(0.51	)	$	(0.02	)	$	(0.53	)
2003 - Class B Shares		14.95		0.31	(b)		0.04			0.35			(0.40	)		(0.02	)		(0.42	)
2003 - Class C Shares		14.94		0.31	(b)		0.04			0.35			(0.40	)		(0.02	)		(0.42	)
2003 - Institutional Shares		14.93		0.47	(b)		0.04			0.51			(0.57	)		(0.02	)		(0.59	)
2003 - Service Shares		14.92		0.41	(b)		0.04			0.45			(0.50	)		(0.02	)		(0.52	)
2002 - Class A Shares		14.96		0.63	(b)(d)		0.19	(d)		0.82			(0.67	)		(0.16	)		(0.83	)
2002 - Class B Shares		14.96		0.52	(b)(d)		0.19	(d)		0.71			(0.56	)		(0.16	)		(0.72	)
2002 - Class C Shares		14.95		0.51	(b)(d)		0.20	(d)		0.71			(0.56	)		(0.16	)		(0.72	)
2002 - Institutional Shares		14.94		0.69	(b)(d)		0.19	(d)		0.88			(0.73	)		(0.16	)		(0.89	)
2002 - Service Shares		14.93		0.62	(b)(d)		0.19	(d)		0.81			(0.66	)		(0.16	)		(0.82	)
2001 - Class A Shares		13.84		0.78	(b)		1.13			1.91			(0.79	)		—			(0.79	)
2001 - Class B Shares		13.85		0.68	(b)		1.11			1.79			(0.68	)		—			(0.68	)
2001 - Class C Shares		13.84		0.68	(b)		1.11			1.79			(0.68	)		—			(0.68	)
2001 - Institutional Shares		13.82		0.83	(b)		1.14			1.97			(0.85	)		—			(0.85	)
2001 - Service Shares		13.82		0.76	(b)		1.13			1.89			(0.78	)		—			(0.78	)
2000 - Class A Shares		13.70		0.82			0.15			0.97			(0.83	)		—			(0.83	)
2000 - Class B Shares		13.72		0.71			0.15			0.86			(0.73	)		—			(0.73	)
2000 - Class C Shares		13.71		0.71			0.14			0.85			(0.72	)		—			(0.72	)
2000 - Institutional Shares		13.69		0.87			0.14			1.01			(0.88	)		—			(0.88	)
2000 - Service Shares		13.63		0.82			0.18			1.00			(0.81	)		—			(0.81	)
1999 - Class A Shares		14.91		0.80			(0.89	)		(0.09	)		(0.77	)		(0.35	)		(1.12	)
1999 - Class B Shares		14.92		0.69			(0.87	)		(0.18	)		(0.67	)		(0.35	)		(1.02	)
1999 - Class C Shares		14.91		0.69			(0.88	)		(0.19	)		(0.66	)		(0.35	)		(1.01	)
1999 - Institutional Shares		14.90		0.85			(0.88	)		(0.03	)		(0.83	)		(0.35	)		(1.18	)
1999 - Service Shares		14.88		0.77			(0.92	)		(0.15	)		(0.75	)		(0.35	)		(1.10	)

(a)	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.
(b)	Calculated based on the average shares outstanding methodology.
(c)	Includes 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%. Per share ratios and supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.

88     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
					Net assets		Ratio of			net investment			Ratio of			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(a)			(in 000s)		net assets			assets			net assets			assets			rate(d)
$	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
	14.96		14.20			142,904		0.98			5.46			1.31			5.13			473
	14.96		13.27			34,036		1.73			4.71			2.06			4.38			473
	14.95		13.28			13,814		1.73			4.71			2.06			4.38			473
	14.94		14.67			34,997		0.58			5.80			0.91			5.47			473
	14.93		14.04			8,239		1.08			5.27			1.41			4.94			473
	13.84		7.33			88,783		0.98			6.01			1.39			5.60			341
	13.85		6.45			18,724		1.73			5.24			2.14			4.83			341
	13.84		6.46			7,606		1.73			5.25			2.14			4.84			341
	13.82		7.68			7,514		0.58			6.41			0.99			6.00			341
	13.82		7.62			373		1.08			6.02			1.49			5.61			341
	13.70		(0.63	)		82,102		0.98			5.63			1.33			5.28			278
	13.72		(1.29	)		19,684		1.73			4.88			2.08			4.53			278
	13.71		(1.29	)		10,053		1.73			4.89			2.08			4.54			278
	13.69		(0.23	)		5,899		0.58			6.07			0.93			5.72			278
	13.63		(1.01	)		15		1.08			5.56			1.43			5.21			278

89

 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			Total
	of year		income			gain (loss)			operations			income			gains			distributions
FOR THE YEARS ENDED OCTOBER 31,
2003 - Class A Shares	$	10.07	$	0.40	(c)	$	0.28		$	0.68		$	(0.40	)	$	(0.04	)	$	(0.44	)
2003 - Class B Shares		10.10		0.33	(c)		0.28			0.61			(0.32	)		(0.04	)		(0.36	)
2003 - Class C Shares		10.10		0.33	(c)		0.28			0.61			(0.32	)		(0.04	)		(0.36	)
2003 - Institutional Shares		10.09		0.45	(c)		0.29			0.74			(0.44	)		(0.04	)		(0.48	)
2003 - Service Shares		10.09		0.40	(c)		0.29			0.69			(0.39	)		(0.04	)		(0.43	)
2002 - Class A Shares		10.25		0.50	(c)		(0.13	)		0.37			(0.52	)		(0.03	)		(0.55	)
2002 - Class B Shares		10.29		0.43	(c)		(0.15	)		0.28			(0.44	)		(0.03	)		(0.47	)
2002 - Class C Shares		10.29		0.43	(c)		(0.15	)		0.28			(0.44	)		(0.03	)		(0.47	)
2002 - Institutional Shares		10.28		0.55	(c)		(0.15	)		0.40			(0.56	)		(0.03	)		(0.59	)
2002 - Service Shares		10.28		0.51	(c)		(0.16	)		0.35			(0.51	)		(0.03	)		(0.54	)
2001 - Class A Shares		9.52		0.56	(c)		0.75			1.31			(0.58	)		—			(0.58	)
2001 - Class B Shares		9.54		0.49	(c)		0.77			1.26			(0.51	)		—			(0.51	)
2001 - Class C Shares		9.55		0.49	(c)		0.76			1.25			(0.51	)		—			(0.51	)
2001 - Institutional Shares		9.54		0.60	(c)		0.76			1.36			(0.62	)		—			(0.62	)
2001 - Service Shares		9.54		0.55	(c)		0.76			1.31			(0.57	)		—			(0.57	)
2000 - Class A Shares		9.50		0.57	(c)		0.02			0.59			(0.58	)		—			(0.58	)
2000 - Class B Shares		9.52		0.50	(c)		0.02			0.52			(0.51	)		—			(0.51	)
2000 - Class C Shares		9.52		0.50	(c)		0.03			0.53			(0.51	)		—			(0.51	)
2000 - Institutional Shares		9.52		0.61	(c)		0.02			0.63			(0.62	)		—			(0.62	)
2000 - Service Shares		9.52		0.56	(c)		0.02			0.58			(0.57	)		—			(0.57	)
1999 - Class A Shares		10.25		0.54			(0.61	)		(0.07	)		(0.53	)		(0.15	)		(0.68	)
1999 - Class B Shares		10.28		0.48			(0.62	)		(0.14	)		(0.47	)		(0.15	)		(0.62	)
1999 - Class C Shares		10.28		0.47			(0.62	)		(0.15	)		(0.46	)		(0.15	)		(0.61	)
1999 - Institutional Shares		10.28		0.58			(0.62	)		(0.04	)		(0.57	)		(0.15	)		(0.72	)
1999 - Administration Shares(e)		10.27		0.40	(c)		(0.41	)		(0.01	)		(0.40	)		(0.15	)		(0.55	)
1999 - Service Shares		10.28		0.54			(0.62	)		(0.08	)		(0.53	)		(0.15	)		(0.68	)

(a)	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. 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.
(b)	Annualized.
(c)	Calculated based on the average shares outstanding methodology.
(d)	Includes the effect of mortgage dollar roll transactions.
(e)	Administration Class shares were liquidated on July 20, 1999. Ending net asset value shown as of July 20, 1999.

90     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			expenses			income to			Portfolio
value, end			Total			year		to average			average net			to average			average net			turnover
of year			return(a)			(in 000s)		net assets			assets			net assets			assets			rate(d)
$	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
	10.26			14.17			178,885		0.94			5.61			0.94			5.61			315
	10.30			13.51			26,848		1.69			4.93			1.69			4.93			315
	10.30			13.38			11,998		1.69			4.89			1.69			4.89			315
	10.29			14.69			440,836		0.54			6.05			0.54			6.05			315
	10.29			14.13			26,667		1.04			5.54			1.04			5.54			315
	9.51			6.48			73,846		0.94			6.04			0.97			6.01			272
	9.53			5.69			14,002		1.69			5.29			1.72			5.26			272
	9.54			5.80			6,107		1.69			5.30			1.72			5.27			272
	9.53			6.90			268,465		0.54			6.46			0.57			6.43			272
	9.53			6.37			9,445		1.04			5.95			1.07			5.92			272
	9.50			(0.68	)		65,368		0.94			5.57			0.98			5.53			280
	9.52			(1.47	)		14,654		1.69			4.83			1.73			4.79			280
	9.52			(1.51	)		7,443		1.69			4.82			1.73			4.78			280
	9.52			(0.37	)		216,973		0.54			5.97			0.58			5.93			280
	9.71	(e)		(0.13	)		—		0.79	(b)		5.63	(b)		0.83	(b)		5.59	(b)		280
	9.52			(0.87	)		8,172		1.04			5.50			1.08			5.46			280

91

 GOLDMAN SACHS GLOBAL 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			From			realized			Total
	of year		income			gain (loss)			operations			income			capital			gains			distributions
FOR THE YEARS ENDED OCTOBER 31,
2003 - Class A Shares	$	14.34	$	0.46	(b)	$	0.32		$	0.78		$	(0.73	)	$	—		$	—		$	(0.73	)
2003 - Class B Shares		14.30		0.39	(b)		0.30			0.69			(0.65	)		—			—			(0.65	)
2003 - Class C Shares		14.27		0.38	(b)		0.32			0.70			(0.65	)		—			—			(0.65	)
2003 - Institutional Shares		14.33		0.56	(b)		0.30			0.86			(0.82	)		—			—			(0.82	)
2003 - Service Shares		14.31		0.49	(b)		0.31			0.80			(0.75	)		—			—			(0.75	)
2002 - Class A Shares		14.72		0.50	(b)(c)		(0.35	)(c)		0.15			(0.53	)		—			—			(0.53	)
2002 - Class B Shares		14.68		0.41	(b)(c)		(0.33	)(c)		0.08			(0.46	)		—			—			(0.46	)
2002 - Class C Shares		14.65		0.41	(b)(c)		(0.33	)(c)		0.08			(0.46	)		—			—			(0.46	)
2002 - Institutional Shares		14.70		0.58	(b)(c)		(0.33	)(c)		0.25			(0.62	)		—			—			(0.62	)
2002 - Service Shares		14.69		0.50	(b)(c)		(0.33	)(c)		0.17			(0.55	)		—			—			(0.55	)
2001 - Class A Shares		14.68		0.55	(b)		0.85			1.40			(1.36	)		—			—			(1.36	)
2001 - Class B Shares		14.65		0.48	(b)		0.84			1.32			(1.29	)		—			—			(1.29	)
2001 - Class C Shares		14.63		0.47	(b)		0.84			1.31			(1.29	)		—			—			(1.29	)
2001 - Institutional Shares		14.67		0.65	(b)		0.84			1.49			(1.46	)		—			—			(1.46	)
2001 - Service Shares		14.66		0.57	(b)		0.84			1.41			(1.38	)		—			—			(1.38	)
2000 - Class A Shares		14.49		0.59	(b)		0.20			0.79			(0.60	)		—			—			(0.60	)
2000 - Class B Shares		14.45		0.51	(b)		0.22			0.73			(0.53	)		—			—			(0.53	)
2000 - Class C Shares		14.43		0.51	(b)		0.22			0.73			(0.53	)		—			—			(0.53	)
2000 - Institutional Shares		14.48		0.68	(b)		0.21			0.89			(0.70	)		—			—			(0.70	)
2000 - Service Shares		14.47		0.61	(b)		0.20			0.81			(0.62	)		—			—			(0.62	)
1999 - Class A Shares		15.65		0.62	(b)		(0.78	)		(0.16	)		(0.61	)		(0.03	)		(0.36	)		(1.00	)
1999 - Class B Shares		15.63		0.53			(0.78	)		(0.25	)		(0.55	)		(0.02	)		(0.36	)		(0.93	)
1999 - Class C Shares		15.60		0.53			(0.77	)		(0.24	)		(0.55	)		(0.02	)		(0.36	)		(0.93	)
1999 - Institutional Shares		15.64		0.71			(0.77	)		(0.06	)		(0.71	)		(0.03	)		(0.36	)		(1.10	)
1999 - Service Shares		15.64		0.64			(0.79	)		(0.15	)		(0.63	)		(0.03	)		(0.36	)		(1.02	)

(a)	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 distributions of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares.
(b)	Calculated based on the average shares outstanding methodology.
(c)	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 0.43%. Per share ratios and supplemental data for periods prior to November 1, 2001 have not been restated to reflect this change in presentation.

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

GOLDMAN SACHS GLOBAL 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			expenses			income to			Portfolio
value, end		Total			year		to average			average net			to average			average net			turnover
of year		return(a)			(in 000s)		net assets			assets			net assets			assets			rate
$	14.39		5.45	%	$	224,553		1.35	%		3.15	%		1.74	%		2.76	%		106	%
	14.34		4.87			37,118		1.85			2.64			2.24			2.25			106
	14.32		4.96			11,238		1.85			2.64			2.24			2.25			106
	14.37		6.07			90,368		0.70			3.82			1.09			3.43			106
	14.36		5.61			609		1.20			3.37			1.59			2.98			106
	14.34		1.08			255,821		1.34			3.36	(c)		1.72			2.98	(c)		146
	14.30		0.59			37,986		1.84			2.88	(c)		2.22			2.50	(c)		146
	14.27		0.59			11,533		1.84			2.88	(c)		2.22			2.50	(c)		146
	14.33		1.82			143,127		0.69			4.00	(c)		1.07			3.62	(c)		146
	14.31		1.24			1,184		1.19			3.49	(c)		1.57			3.11	(c)		146
	14.72		10.08			286,718		1.34			3.80			1.70			3.44			222
	14.68		9.50			31,969		1.84			3.28			2.20			2.92			222
	14.65		9.44			8,679		1.84			3.28			2.20			2.92			222
	14.70		10.73			181,869		0.69			4.47			1.05			4.11			222
	14.69		10.18			1,394		1.19			3.96			1.55			3.60			222
	14.68		5.58			294,738		1.34			4.03			1.70			3.67			185
	14.65		5.14			22,008		1.84			3.53			2.20			3.17			185
	14.63		5.13			5,954		1.84			3.54			2.20			3.18			185
	14.67		6.27			287,145		0.69			4.69			1.05			4.33			185
	14.66		5.76			1,934		1.19			4.17			1.55			3.81			185
	14.49		(1.14	)		271,832		1.34			4.12			1.72			3.74			158
	14.45		(1.74	)		16,724		1.84			3.60			2.22			3.22			158
	14.43		(1.68	)		7,786		1.84			3.60			2.22			3.22			158
	14.48		(0.49	)		279,621		0.69			4.75			1.07			4.37			158
	14.47		(1.06	)		1,115		1.19			4.28			1.57			3.90			158

93

 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Report of Ernst & Young LLP, Independent Auditors

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 Enhanced Income Fund, Goldman Sachs Ultra-Short Duration Government Fund, Goldman Sachs Short Duration Government Fund, Goldman Sachs Government Income Fund, Goldman Sachs Core Fixed Income Fund and Goldman Sachs Global Income Fund (six of the funds comprising the Goldman Sachs Trust) (the “Funds”) as of October 31, 2003, 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 four periods in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for the period ended October 31, 1999 were audited by other auditors whose report, dated December 10, 1999, expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with auditing standards generally accepted in the 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of October 31, 2003 by correspondence with the custodian and others. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights, audited by us, referred to above present fairly, in all material respects, the financial position of Goldman Sachs Enhanced Income Fund, Goldman Sachs Ultra-Short Duration Government Fund, Goldman Sachs Short Duration Government Fund, Goldman Sachs Government Income Fund, Goldman Sachs Core Fixed Income Fund and Goldman Sachs Global Income Fund at October 31, 2003, the results of their operations, the changes in their net assets and the financial highlights for the periods indicated above, in conformity with accounting principles generally accepted in the United States.

Ernst & Young LLP

New York, New York

December 18, 2003

94

Trustees and Officers (Unaudited)

Independent Trustees

						Number of
			Term of			Portfolios in
			Office and			Fund
			Length of			Complex
	Position(s) Held		Time		Principal Occupation(s)	Overseen by
Name, Address and Age1	with the Trust2		Served3		During Past 5 Years	Trustee4		Other Directorships Held by Trustee5
Ashok N. Bakhru Age: 61		Chairman & Trustee		Since 1991	President, ABN Associates (July 1994- March 1996 and November 1998-Present); Executive Vice President – Finance and Administration and Chief Financial Officer, Coty Inc. (manufacturer of fragrances and cosmetics) (April 1996- November 1998); Director of Arkwright Mutual Insurance Company (1984-1999); Trustee of International House of Philadelphia (program center and residential community for students and professional trainees from the United States and foreign countries) (1989-Present); Member of Cornell University Council (1992-Present); Trustee of the Walnut Street Theater (1992- Present); Trustee, Scholarship America (1998-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-Present).		62		None
					Chairman of the Board and Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
John P. Coblentz, Jr.		Trustee		Since 2003	Partner, Deloitte & Touche, LLP (June 1975-May 2003).		62		None
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
Patrick T. Harker Age: 45		Trustee		Since 2000	Dean and Reliance Professor of Operations and Information Management, The Wharton School, University of Pennsylvania (February 2000-Present); Interim and Deputy Dean, The Wharton School, University of Pennsylvania (July 1999- Present); and Professor and Chairman of Department of Operations and Information Management, The Wharton School, University of Pennsylvania (July 1997- August 2000).		62		None
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
Mary P. McPherson Age: 68		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); and Director, American School of Classical Studies in Athens (1997- Present).		62		None
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).

95

						Number of
			Term of			Portfolios in
			Office and			Fund
			Length of			Complex
	Position(s) Held		Time		Principal Occupation(s)	Overseen by
Name, Address and Age1	with the Trust2		Served3		During Past 5 Years	Trustee4		Other Directorships Held by Trustee5
Wilma J. Smelcer Age: 54		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- Present).		62		None
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
Richard P. Strubel Age: 64		Trustee		Since 1987	President, COO and Director Unext, Inc. (provider of educational services via the internet) (1999-Present); Director, Cantilever Technologies, Inc. (a private software company) (1999- Present); Trustee, The University of Chicago (1987-Present); and Managing Director, Tandem Partners, Inc. (management services firm) (1990-1999).		62	Gildan Activewear Inc. (an activewear clothing marketing and manufacturing company); Unext, Inc. (provider of educational services via the internet); Northern Mutual Fund Complex (53  Portfolios).
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).

96

						Number of
			Term of			Portfolios in
			Office and			Fund
			Length of			Complex
	Position(s) Held		Time		Principal Occupation(s)	Overseen by
Name, Address and Age1	with the Trust2		Served3		During Past 5 Years	Trustee4		Other Directorships Held by Trustee5
Interested Trustees
*Gary D. Black Age: 43		Trustee		Since 2002	Managing Director, Goldman Sachs (June 2001-Present); Executive Vice President, AllianceBernstein (investment adviser) (October 2000-June 2001); Managing Director, Global Institutional Investment Management, Sanford Bernstein (investment adviser) (January 1999- October 2000); and Senior Research Analyst Sanford Bernstein (investment adviser) (February 1992-December 1998).		62		None
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
*James A. McNamara Age: 41	Trustee & Vice President			Since 2002	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).		62		None
				Since 2001	Vice President – Goldman Sachs Mutual Fund Complex (registered investment companies).
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
*Alan A. Shuch Age: 53		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).		62		None
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
*Kaysie P. Uniacke Age: 42		Trustee & President		Since 2001	Managing Director, GSAM (1997-Present).		62		None
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
				Since 2002	President – Goldman Sachs Mutual Fund Complex (2002-Present) (registered investment companies).
					Assistant Secretary – Goldman Sachs Mutual Fund Complex (1997- 2002) (registered investment companies).

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*	These persons are considered to be “Interested Trustees” because they hold positions with Goldman Sachs and own securities issued by The Goldman Sachs Group, Inc. Each Interested Trustee holds comparable positions with certain other companies of which Goldman Sachs, GSAM or an affiliate thereof is the investment adviser, administrator and/or distributor.
1	Each Trustee may be contacted by writing to the Trustee, c/o Goldman Sachs, One New York Plaza, 37th Floor, New York, New York, 10004, Attn: Howard B. Surloff.
2	The Trust is a successor to a Massachusetts business trust that was combined with the Trust on April 30, 1997.
3	Each Trustee holds office for an indefinite term until the earliest of: (a) the election of his or her successor; (b) the date the Trustee resigns or is removed by the Board of Trustees or shareholders, in accordance with the Trust’s Declaration of Trust; (c) the date the Trustee attains the age of 72 years (in accordance with the current resolutions of the Board of Trustees, which may be changed by the Trustees without shareholder vote); or (d) the termination of the Trust.
4	The Goldman Sachs Mutual Fund Complex consists of the Trust and Goldman Sachs Variable Insurance Trust. As of August 31, 2003, the Trust consisted of 56 portfolios, including the Funds described in this Annual Report, and Goldman Sachs Variable Insurance Trust consisted of 6 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): 1-800-292-4726.

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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: 42		President & Trustee	Since 2002 Since 2001		Managing Director, GSAM (1997-Present). Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies). President – Goldman Sachs Mutual Fund Complex (registered investment companies). Assistant Secretary – Goldman Sachs Mutual Fund Complex (1997-2002) (registered investment companies).
John M. Perlowski 32 Old Slip New York, NY 10005 Age: 38		Treasurer		Since 1997	Managing Director, Goldman Sachs (December 2003-Present); and Vice President, Goldman Sachs (July 1995-December 2003). Treasurer – Goldman Sachs Mutual Fund Complex (registered investment companies).
James A. Fitzpatrick 4900 Sears Tower Chicago, IL 60606 Age: 43		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: 41	Vice President & Trustee			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).
				Since 2002	Vice President – Goldman Sachs Mutual Fund Complex (registered investment companies).
					Trustee – Goldman Sachs Mutual Fund Complex (registered investment companies).
Howard B. Surloff One New York Plaza 37th Floor New York, NY 10004 Age: 38		Secretary		Since 2001	Managing Director, Goldman Sachs (November 2002-Present); Associate General Counsel, Goldman Sachs and General Counsel to the U.S. Funds Group (December 1997-Present). Secretary – Goldman Sachs Mutual Fund Complex (registered investment companies) (2001-Present) and Assistant Secretary prior thereto.

¹ Officers hold office at the pleasure of the Board of Trustees or until their successors are duly elected and qualified. Each officer holds comparable positions with certain other companies of which Goldman Sachs, GSAM or an affiliate thereof is the investment adviser, administrator and/or distributor.

*  Represents a partial list of officers of the Trust. Additional information about all the officers is available in the Funds’ Statement of Additional Information which can be obtained from Goldman Sachs free of charge by calling this toll-free number (in the United States): 1-800-292-4726.

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 GOLDMAN SACHS TAXABLE INVESTMENT GRADE FUNDS

Goldman Sachs Taxable Investment Grade Funds — Tax Information (unaudited)

       Pursuant to Section 852 of the Internal Revenue Code, the Goldman Sachs Government Income Fund and the Goldman Sachs Core Fixed Income Fund designate $488,233 and $988,773, respectively, as capital gain dividends paid during the year ended October 31, 2003.

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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, Goldman Sachs Asset Management, L. P. and other units of the Investment Management Division of Goldman Sachs serve a diverse set of clients worldwide, including private institutions, public entities and individuals. With portfolio management teams located around the world — and $337. 2 billion in assets under management as of THE GOLDMAN September 30, 2003 — our investment professionals bring firsthand knowledge of local SACHS ADVANTAGE markets to every investment decision, making us one of the few truly global asset managers.

Our goal is to deliver:

GOLDMAN SACHS FUNDS

Strong, Consistent In building a globally diversified Investment Results portfolio, you can select from more than 50 Goldman Sachs Funds and gain access Global Resources and Global Research to investment opportunities across borders, investment styles, asset classes Team Approach and security capitalizations. Disciplined Processes

Innovative, Value-Added Investment Products

Thoughtful Solutions Risk Management

Outstanding Client Service Domestic Equity Funds Small Cap Value Fund Dedicated Service Asset Allocation Funds CORESM Small Cap Equity Fund Teams Balanced Fund Mid Cap Value Fund Excellence and Asset Allocation Portfolios Concentrated Growth Fund Integrity International Equity Funds Growth Opportunities Fund Fixed Income Funds Asia Growth Fund Research Select FundSM High Yield Fund Emerging Markets Equity Fund Strategic Growth Fund High Yield Municipal Fund International Growth Capital Growth Fund Global Income Fund Opportunities Fund Large Cap Value Fund Core Fixed Income Fund Japanese Equity Fund Growth and Income Fund Municipal Income Fund European Equity Fund CORESM Large Cap Growth Fund Government Income Fund International Equity Fund CORESM Large Cap Value Fund Short Duration Tax-Free Fund CORESM International Equity Fund CORESM U. S. Equity Fund Short Duration Government Fund Ultra-Short Duration Government Specialty Funds Fund Internet Tollkeeper FundSM Enhanced Income Fund CORESM Tax-Managed Equity Fund Real Estate Securities Fund Money Market Funds1

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 Fund seeks to preserve the value of your investment at $1. 00 per share, it is possible to lose money by investing in the Fund.

The Goldman Sachs Research Select FundSM, Internet Tollkeeper FundSM and CORESM are service marks of Goldman, Sachs & Co.

GOLDMAN SACHS ASSET MANAGEMENT, L. P. 32 OLD SLIP, 17TH FLOOR, NEW YORK, NEW YORK 10005 TRUSTEES            OFFICERS Ashok N. Bakhru, Chairman Kaysie P. Uniacke, President

Gary D. Black James A. Fitzpatrick, Vice President John P. Coblentz, Jr. James A. McNamara, Vice President Patrick T. Harker John M. Perlowski, Treasurer James A. McNamara Howard B. Surloff, Secretary Mary Patterson McPherson Alan A. Shuch Wilma J. Smelcer Richard P. Strubel Kaysie P. Uniacke

GOLDMAN, SACHS & CO. GOLDMAN SACHS INTERNATIONAL

Distributor and Transfer Agent Christchurch Court 10-15 Newgate Street GOLDMAN SACHS ASSET MANAGEMENT, L. P. London, England EC1 A7HD Investment Adviser

Visit our internet address: www. gs. com/funds

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.

This material is not authorized for distribution to prospective investors unless preceded or accompanied by a current Prospectus. Investors should read the Prospectus carefully before investing or sending money.

The Goldman Sachs Government Income, Goldman Sachs Short Duration Government and Goldman Sachs Ultra-Short Duration Government Funds’ net asset values and yields are not guaranteed by the U. S. government or by its agencies, instrumentalities or sponsored enterprises.

Goldman Sachs Global Income and Goldman Sachs Core Fixed Income Funds’ foreign investments may be more volatile than an investment in U. S. securities and are subject to the risks of currency fluctuations and political developments.

The Goldman Sachs Enhanced Income Fund is not a money market fund. Investors in this Fund should understand that the net asset value of the Fund will fluctuate which may result in a loss of a portion of the principal amount invested.

Goldman, Sachs & Co. is the distributor of the Funds.

Copyright 2003 Goldman, Sachs & Co. All rights reserved. Date of first use: December 30, 2003 / 03-1944 FI/INVGRAR / 64. 9K / 12-03