Goldman Sachs High Yield Instl (GSHIX) N-CSRSCertified semi-annual shareholder report (management investment company)

Overall, the global capital markets posted gains during the Reporting Period.

The MSCI World Index (net), representing developed markets equities, returned 12.26%. Emerging markets equities, as represented by the MSCI Emerging Markets Index (net), returned 16.36%.

The Bloomberg U.S. Aggregate Bond Index, representing U.S. bonds of investment grade quality or better, returned 6.91%. U.S. high yield corporate bonds, as represented by the ICE BofAML BB to B US High Yield Constrained Index, returned 5.84% for the Reporting Period.

As the Reporting Period began in November 2022, global equities performed strongly, with investors focused on improving inflationary indicators around the world. Within U.S. fixed income, high yield corporate bonds gained on the back of softer U.S. inflation, anticipation of a slower pace of Federal Reserve (“Fed”) tightening, better than consensus expected corporate earnings, and solid market technicals (that is, supply and demand).

Early in November, the Fed raised the targeted federal funds rate. Broad messaging from policymakers suggested a strong preference to slow the pace of interest rate hikes so they could evaluate the impact of the significant tightening during 2022 year to date.

Elsewhere, the European Central Bank (“ECB “) and the Bank of England (“BoE”) delivered interest rates hikes, with policymakers signaling they expected future action to be data dependent.

In December 2022, developed markets equities were rather muted but still positive, while emerging markets equities fell modestly. Within fixed income, U.S. high yield corporate bonds advanced early in the month driven by slowing U.S. inflation but then surrendered their gains as risk aversion increased, fueled by interest rate volatility and investor concerns around a potential U.S. recession.

Inflation remained top of mind for investors overall, as central banks—including the Fed, ECB and BoE—announced plans to continue raising interest rates.

The Bank of Japan, which had been an outlier for much of 2022, took a step towards convergence with other central banks, with policymakers widening their target for the 10-year Japanese government bond yield.

Global equities rose solidly in January 2023, as markets performed well on the back of softening inflationary pressures, the slowing pace of central bank interest rate hikes and abating recession fears. For similar reasons, U.S. high yield corporate bonds generated positive returns for the month.

In China, the government fully lifted its stringent zero-COVID policy, which increased global hopes around both the resolution of supply-chain disruptions as well as economic recovery driven by strong domestic consumption.

During February 2023, global equities fell, as the release of unexpectedly strong U.S. economic and labor market data raised concerns about the “stickiness” (that is, the persistence) of inflation. These concerns led market participants to anticipate further tightening from central banks. Market sentiment was also dampened by ongoing geopolitical tensions between Russia and Ukraine one year after Russia’s initial invasion. In U.S. fixed income, high yield corporate bonds were relatively resilient despite increased investor risk aversion triggered by interest rate volatility following the release of the strong U.S. data.

In March 2023, global equities gained, with market sentiment boosted by speculation about potentially weaker inflationary trends, the possible slowing of central bank interest rate hikes and fading investor concerns about a global recession. Risk aversion increased mid month as the U.S. banking sector faced its worst crisis since 2008 and the fallout extended to other U.S. regional banks and to Europe. Within fixed income, U.S. high yield corporate bonds performed well, though they weakened as investors evaluated the implications of banking sector stress. Ultimately, receding fears of broader contagion, along with a drop in yields, helped the asset class post a modest gain for the month.

Central banks grappled with a difficult trade-off between the firm macroeconomic backdrop, including resilient labor markets and elevated inflation, and rising financial stability concerns. Policymakers generally maintained a hawkish bias during March, while striking a more cautious tone on the forward path for interest rates. (Hawkish tends to suggest higher interest rates; opposite of dovish.)

In April 2023, developed markets equities continued to rise, recovering slightly from the banking turmoil that had plagued March. Emerging markets equities fell amid an increase in geopolitical tensions and growing investor uncertainty around various central banks’ terminal rates. (A terminal rate is the ultimate interest rate level that a central bank targets for a cycle of rate hikes or cuts.) China’s equity market was particularly weak, experiencing a significant sell-off as investors noted an uneven recovery following the country’s economic reopening. In U.S. fixed income, high yield corporate bonds gained on better than consensus expected corporate earnings, robust market technicals, and decreasing regional banking stress.

Overall, U.S. equities rallied during the Reporting Period. The Standard & Poor’s 500 Index (the “S&P 500 Index”) ended the Reporting Period with a return of 8.63%. The Russell 3000^® Index generated a return of 7.30%.

The market posted solid returns during the Reporting Period despite a backdrop of ongoing Fed interest rate hikes to combat inflation, persistent recession worries, supply-chain disruptions, geopolitical tensions given the Russia/Ukraine war, and elevated concerns around China’s zero-COVID policy.

As the Reporting Period began in November 2022, the S&P 500 Index rose, marking its first back-to-back monthly gains since August 2021.

The primary catalyst driving U.S. equities higher was the notion the Fed could begin to slow the pace of interest rate hikes in December 2022.

Economic data mainly supported the Fed’s goal of a controlled economic slowdown, as October 2022 inflation data came in softer than market forecasts.

Still, the third quarter corporate earnings season provided disappointing results.

Consumers proved resilient, as retail sales posted the largest monthly increase since February 2022.

Additionally, China’s zero-COVID policy remained top of mind for the market, as COVID cases in China reached record highs.

In December 2022, the S&P 500 Index fell, as investors continued to witness a variety of contradictory macroeconomic developments, highlighted by a noticeably hawkish Fed, consumer resilience, and economic data supporting the themes of slowing economic growth.

There was a dovish tilt surrounding consensus expectations for a reduction in the pace of monetary policy tightening, which was realized when the Fed announced a 50 basis point interest rate hike in December, following four successive 75 basis point increases.

Positive inflation developments supported market aspirations for a peak in the Fed tightening cycle, with October and November inflation data coming in lower than anticipated by most.

Despite the smaller interest rate hike, the Fed maintained its hawkish tone with its relentless higher-for-longer messaging that continued to be a headwind for the U.S. equities market.

Although the third quarter 2022 corporate earnings season provided disappointing results, companies emphasized a strong demand environment even against a backdrop of heightened macroeconomic uncertainty. Companies also focused on cost-cutting measures, as headlines of layoffs remained in the spotlight, especially within the information technology sector.

On the geopolitical front, the most constructive takeaways came from China’s zero-COVID pivot and pro-growth focus as well as Europe’s warmer than anticipated weather that helped settle concerns about an energy crisis there.

Rebounding from December 2022’s losses, the S&P 500 Index then rose during the first quarter of 2023, marking its second consecutive quarterly gain, with market strength supported by disinflation narrative momentum, soft landing expectations, and a lowered bar for fourth quarter 2022 corporate earnings. (A soft landing, in economics, is a cyclical downturn that avoids recession. It typically describes attempts by central banks to raise interest rates just enough to stop an economy from overheating and experiencing high inflation, without causing a significant increase in unemployment, or a hard landing.)

Following a stellar start to the year, February 2023 proved to be a setback for the disinflation path after non-farm payrolls illustrated the largest job growth in six months and the U.S. unemployment rate fell to a 53-year low—together pushing market forecasts for the Fed’s terminal federal funds rate upward. (A terminal rate is the ultimate interest rate level that a central bank targets for a cycle of rate hikes or cuts.) In addition, inflation indices saw their largest monthly increases since mid-2022, illustrating that more needed to be done to combat inflation.

The bearish case was further supported by a disappointing fourth quarter 2022 corporate earnings season, as margins came under pressure by persistently high input costs and weaker demand.

Consensus forecasts for the Fed’s interest rate path took a dovish turn in March 2023 due to an abrupt banking crisis that escalated the risk of rising interest rates. Economic data in March also contributed to the dovish sentiment, as February inflation data was cooler than market expected as was personal income growth.

In April 2023, the S&P 500 Index increased, albeit modestly, on strong first quarter 2023 corporate earnings results, consumer resiliency and supply-constraint easing.

The soft landing narrative gained support from robust household spending and from manufacturing prices falling to the lowest level in nearly three years as companies continued to reduce outputs to better match demand.

Simultaneously, hard landing fears lingered due to tightening financial conditions following the banking sector turmoil and the U.S. government’s debt ceiling stalemate.

Economic data throughout the month was mixed. First quarter 2023 Gross Domestic Product (“GDP”) came in below consensus. Core inflation grew slightly from a 14-month low of 5.5% in the prior month, however leading indicators still suggested it should begin to moderate in the months ahead. Both manufacturing and services indices showed growth in economic activity. The labor market displayed signs of cooling after the March 2023 jobs report revealed the pace of hiring had slowed to the lowest level in more than two years.

By the end of the month, the market had embraced consensus expectations that interest rates would be raised by 25 basis points at the Fed’s May meeting, followed by a pause before eventual rate cuts in the second half of the calendar year. (On May 3, 2023, the Fed did raise its targeted federal funds rate by 25 basis points and opened the door to a pause in its tightening cycle.)

For the Reporting Period overall, large-cap stocks performed best, followed by mid-cap stocks, with each such market segment generating positive absolute returns. Small-cap stocks lagged, posting negative absolute returns. In a reversal from the prior 12 months, growth stocks meaningfully outperformed value stocks across the capitalization spectrum during the Reporting Period overall.

The best performing sectors within the S&P 500 Index during the Reporting Period were communication services and information technology, followed at some distance by materials. The weakest performing sector was energy, the only sector to post a negative absolute return during the Reporting Period. Financials and health care generated modestly positive returns but also significantly underperformed the S&P 500 Index during the Reporting Period overall.

During the Reporting Period, broad-based macroeconomic uncertainty, driven by rising interest rates and concerns around the banking sector, drove volatility across asset classes, including energy.

West Texas Intermediate (“WTI”) crude oil prices decreased approximately 11%, while natural gas prices saw an even more significant pullback. U.S. Henry Hub natural gas prices were down 63%, and European Title Transfer Facility (“TTF”) natural gas prices were down approximately 50% during the Reporting Period. (Henry Hub is a natural gas pipeline located in Erath, Louisiana, that serves as the official delivery location for futures contracts on the New York Mercantile Exchange (NYMEX). TTF is a pricing location within the Netherlands. TTF has become the most liquid pricing location in Europe, and as such, oftentimes serves as a pricing proxy for the overall European liquified natural gas (“LNG” import market.)

Oil prices were impacted by global recession fears that weighed on sentiment in the energy sector as many anticipated potentially less oil demand.

Further, Russian crude oil and refined products supply hung in better than consensus expected despite the numerous sanctions applied. Russia was producing about 11.3 million barrels per day of crude oil at the end of the Reporting Period, compared with around 11.1 million barrels per day in the 12 months since the invasion began in February 2022.

Natural gas prices were largely affected by a historically mild winter season and sufficient gas storage to meet the warm winter, particularly in Europe.

Conservation efforts in Europe resulted in both European and U.S. natural gas storage levels that were well above historical average levels at the end of the Reporting Period.

Additionally, constrained LNG export capacity in the U.S. was exacerbated by an outage at the Freeport LNG export facility. This facility, which accounts from more than two billion cubic feet per day of capacity was brought back online toward the end of the Reporting Period after being out of service since June 2022 following an incident.

Despite the correction in energy commodities, energy equities generally performed better. The S&P energy sector, as represented by the S&P 500^® Energy Select Sector Index (“IXE”)¹, returned -3.5% and the broad midstream² sector, as represented by the Alerian US Midstream Energy Index (“AMUS”)³, was relatively flat during the Reporting Period. To compare, the S&P 500 Index, a measure of the broad U.S. equities market, finished the Reporting Period up 8.63%, reversing the outperformance of energy equities in calendar year 2022.

Despite the volatility seen during the Reporting Period, we remained constructive on energy equities at the end of the Reporting Period due to long-term commodity fundamentals and what we saw as attractive valuations, healthy balance sheets and strong free cash flow generation in the sector. Longer term, we believed addressing the “energy trilemma”—which refers to the global need for reliable, sustainable and affordable energy—may well create investment opportunities across the energy sector for decades to come.

While high inflation and recessionary indicators were not positive headlines, midstream businesses benefited during the Reporting Period from having contracted cash flows with embedded inflationary escalators, which historically have proven to support earnings resiliency during economic downturns.

We additionally expected midstream companies and the broader energy sector to potentially experience additional interest as the world’s perception around energy security and terminal value shifts and as money managers rationalize underweight energy exposures.

Overall, we believed at the end of the Reporting Period that the midstream sector presented a compelling investment opportunity and was well positioned to benefit from the growing need for North American energy.

While posting solid positive absolute returns, the Fund underperformed its benchmark, the S&P 500 Index (with dividends reinvested) (the “S&P 500 Index”), on a relative basis during the Reporting Period.

From an asset allocation perspective, having approximately 15% its total net assets in the Master Limited Partnership (“MLP”) & Energy Infrastructure sleeve detracted on a relative basis, as the Fund overall was overweight energy exposures compared to the S&P 500 Index, and the energy sector was the weakest in the S&P 500 Index during the Reporting Period.

The Fund’s dividend-paying investments underperformed the S&P 500 ex-Energy Index, the benchmark used for the dividend-paying growers portion of the Fund, during the Reporting Period.

Sector allocations are the result of stock selection in the dividend-paying growers portion of the Fund, and most sector allocations were rather in line with those of the S&P 500 ex-Energy Index during the Reporting Period. In turn, sector allocation overall had a rather neutral effect on relative results.

That said, having average overweight positions in consumer discretionary, industrials and financials were the most significant positive contributors to relative returns during the Reporting Period.

These positive contributors were offset by having average underweight positions in the information technology, health care and communication services sectors, which detracted from relative performance during the Reporting Period.

Further, underweight positions in certain individual stocks that outperformed the S&P 500 ex-Energy Index during the Reporting Period—including NVIDIA, Meta and Microsoft—dampened relative results.

The Fund’s MLP & Energy Infrastructure Sleeve performed in line with the Alerian MLP Index ⁴, the benchmark used for the MLP & Energy Infrastructure Sleeve of the Fund, during the Reporting Period. Sub-industry allocation positioning overall detracted, largely offset by individual security selection, which contributed positively.

Effective stock selection in the gathering & processing sub-industry contributed most positively during the Reporting Period.

Having an underweighted allocation to and strong stock selection in the marketing/wholesale sub-industry also added value during the Reporting Period as did having a position, albeit modest, in cash.

These positive contributors were offset by the detracting effect of having exposure to the production & mining/hydrocarbon sub-industry, which is not a component of the Alerian MLP Index and which significantly underperformed the Alerian MLP Index during the Reporting Period.

Having an underweighted allocation to the pipeline transportation/petroleum sub-industry and weak stock selection in the pipeline transportation/natural gas sub-industry also hurt relative performance during the Reporting Period.

The net asset value (“NAV”) represents the net assets of the class of the Fund (ex-dividend) divided by the total number of shares of the class outstanding. The Fund’s performance reflects the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges.

The Russell 1000^® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000^® Index companies with lower price-to-book ratios and lower expected growth values. This index is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics. It is not possible to invest directly in an unmanaged index.

The ICE BofAML BB to B U.S. High Yield Constrained Index contains all securities in the ICE BofAML U.S. High Yield Index rated BB1 through B3, based on an average of Moody’s, S&P and Fitch, but caps issuer exposure at 2%. Index constituents are capitalization-weighted, based on their current amount outstanding, provided the total allocation to an individual issuer does not exceed 2%. Issuers that exceed the limit are reduced to 2% and the face value of each of their bonds is adjusted on a pro-rata basis. Similarly, the face values of bonds of all other issuers that fall below the 2% cap are increased on a pro-rata basis. It is not possible to invest directly in an unmanaged index.

The returns set forth in the table above represent past performance. Past performance does not guarantee future results. The Fund’s investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. Please visit our web site at www.GSAMFUNDS.com to obtain the most recent month-end returns. Performance reflects applicable fee waivers and/or expense limitations in effect during the periods shown. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

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

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

The net asset value (“NAV”) represents the net assets of the class of the Fund (ex-dividend) divided by the total number of shares of the class outstanding. The Fund’s performance reflects the reinvestment of dividends and other distributions. The Fund’s performance does not reflect the deduction of any applicable sales charges.

The S&P 500^® Index is the Standard & Poor’s 500 Composite Index of 500 stocks, an unmanaged index of common stock prices. The index figure does not reflect any deduction for fees, expenses or taxes. It is not possible to invest directly in an index.

The returns set forth in the table above represent past performance. Past performance does not guarantee future results. The Fund’s investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted above. Please visit our web site at www.GSAMFUNDS.com to obtain the most recent month-end returns. Performance reflects applicable fee waivers and/or expense limitations in effect during the periods shown. In their absence, performance would be reduced. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

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

The Fund is actively managed and, as such, its composition may differ over time. Consequently, the Fund’s overall sector allocations may differ from the percentages contained in the graph above. Figures in the graph may not sum to 100% due to rounding and/or the exclusion of other assets and liabilities. The graph categorizes investments using the Global Industry Classification Standard (“GICS”); however, the sector classifications used by the portfolio management team may differ from GICS. The percentage shown for each investment category reflects the value of investments in that category as a percentage of market value (excluding investments in the securities lending reinvestment vehicle, if any). The graph depicts the Fund’s investments but may not represent the Fund’s market exposure due to the exclusion of certain derivatives, if any, as listed in the Additional Investment Information section of the Schedule of Investments. Underlying sector allocations of exchange traded funds and other investment companies held by the Fund are not reflected in the graph above.

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