GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIO …€¦ · GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIO A SUB FUND OF GOLDMAN SACHS FUNDS, SICAV A core holding for your portfolio

GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIOA SUB FUND OF GOLDMAN SACHS FUNDS, SICAV

A core holding for your portfolio.

The GS Global Income Builder Portfolio provides exposure to a wide opportunity set of global fixed income and equities.

This marketing communication is issued on 30-Apr-14 for use with retail investors in the United Kingdom.

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GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIO

There is no guarantee that these objectives will be met. Diversification does not protect an investor from market risk and does not ensure a profit.

A core holding for your portfolioThe two main sources for investment returns are capital appreciation, and dividend or interest income.

Capital appreciation is a rise in an asset’s market price, meaning the investment in a security has increased in value. Dividend or interest income is paid regularly and can be a portion of a company’s earnings distributed to its shareholders or the interest rate paid by the issuer of a bond to the bondholders.

Fund ObjectiveBy investing across a broad spectrum of global bonds and equities our investment specialists seek to build a portfolio that can generate sustainable and stable income and capital appreciation.

Please remember that the value of investments may go down as well as up and you may not get back the amount invested. For more information about the suitability of this investment to meet your individual goals, please speak to your financial adviser.


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Market ChallengeInvestors today face an uncertain market environment:

Therefore investors in the pursuit of growth and income face two key challenges. Firstly, if interest rates were to rise, newly-issued bonds would offer higher yields. As a result, existing bonds would fall in price in order to match the yield of the newly-issued bonds. Therefore, as interest rates rise, the income generated from traditional bonds may not offset price depreciation. Secondly, with equity markets near all-time highs and the highest-yielding equities potentially appearing more expensive, security selection is critical.

Interest rate risk: When interest rates rise, bond prices fall, reflecting the ability of investors to obtain a more attractive rate of interest on their money elsewhere. Bond prices are therefore subject to movements in interest rates which may move for a number of reasons, political as well as economic.

Source: Bloomberg, Goldman Sachs Global Economics, Commodities and Strategy Research, and GSAM as of 31-Mar-14.

* “Fair Value” is represented by the 2016 Goldman Sachs Global ECS Research forecast as of 31-Mar-14. Past performance does not guarantee future results, which may vary.

** MSCI World Index as at Feb-14.

Interest rates are very low and we expect them to rise...

0

2

4

6

8

Dec-97

Yiel

d (%

)

Dec-00 Dec-03

10 Year US Treasury Yield Fair Value*

Dec-06 Dec-09 Dec-12

…and equities in many places have reached all-time highs.**

Dec-97 Dec-00 Dec-03 Dec-06 Dec-09 Dec-12

Pric

e Le

vel

MSCI World Index Price Level

0

500

1000

1500

2000

Potential Solution: The GS Global Income Builder Portfolio


The portfolio’s 3 goals are:

I. Focus on income stability…

Goal: To provide investors with stable and sustainable income over

time, by creating a well-diversified portfolio of stocks and bonds. Through

in-depth, bottom-up research, we believe we can find securities from

across a wide opportunity set that can better achieve this objective than

just investing in traditional income-generating asset classes.

II. … and capital appreciation…

Goal: To provide investors with attractive total return. Our focus on

income is thoughtfully balanced with the portfolio’s objective for capital

appreciation, to help sustain future capital needs. In other words, we

will not overreach for yield at the expense of capital appreciation.

III. … with an eye towards volatility

Goal: To provide income and growth but with a potentially lower

volatility than traditional equity markets, by finding best-in-class

opportunities at the security level.

There is no guarantee that these objectives will be met. Diversification does not protect an investor from market risk and does not ensure a profit.4

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A broad spectrum of opportunities

The GS Global Income Builder Portfolio invests in a broad spectrum of global bonds and equities, offering investors increased exposure to non-traditional asset classes to achieve enhanced income and lower exposure to interest rates.* Asset classes such as energy infrastructure (including master limited partnerships or MLPs), real estate investment trusts (REITs), business development companies (BDCs) and bank loans can offer higher yields and, in some cases, less exposure to rate risk compared to traditional income-generating asset classes, such as investment grade bonds and high dividend-yielding equities.

Please see additional disclosures and refer to the glossary at the end of the brochure for investment terms.

Sources: Barclays, Bloomberg, Credit Suisse. As of 28-Feb-14. * Enhanced income refers to the ability of investors to receive superior income levels relative to that offered by traditional fixed income and equity

markets. Yield for equities is represented as dividend yields. Yield for fixed income is the rate of return anticipated on a bond if it is held until the maturity date. The asset classes are represented as such: Global Bonds = Barclays Global Aggregate Index, Global Stocks = MSCI World Index, IG Corp = Barclays Global Aggregate Corporate Index, UK GILTs (7-10 Year) = Barclays UK Gilt 7-10 Year Index, BDCs = Wells Fargo BDC Index, Preferred Stocks = S&P Preferred Stock ETF, Energy infrastructure = representative non-K1 generating MLPs, High Yield Bonds = Barclays Global High Yield Index, EMD (USD) = Barclays EM USD Aggregate Index, Bank Loans = Credit Suisse Leveraged Loan Index, Global REITs = FTSE World REIT Index, Convertibles = Barclays US Convertibles Composite Index. Past performance does not guarantee future results, which may vary. Diversification does not protect an investor from market risk and does not ensure a profit.

0

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4

6

8

10

1.9%

Global

Bonds

IG C

orp

High D

iv. S

tocks

UK Gilts

(7-10

Year)

BDCs

EMD (U

SD)

Prefe

rred S

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s

High Yi

eld

Bank L

oans

Energ

y

Infras

tructu

re

Global

REITs

Conve

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Bon

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Global

Stock

s

2.5% 2.7%

3.9% 3.9%

8.2%

6.7%

6.0% 5.4% 5.1% 5.0%4.0%

2.8%

Traditional 60/40 Portfolio

Core IncomeDrivers

Additional IncomeDrivers

Equites Fixed Income (YTW)* 60 Global Bonds / 40 Global Stocks

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Three reasons to consider the GS Global Income Builder Portfolio

A thoughtful balance of the 3 key objectives. In the current low rate environment and in a world of potentially stretched equity valuations, a balanced portfolio of carefully selected bonds and stocks can offer investors the opportunity to enhance their yield.1

2Dynamically managed. The portfolio is dynamically managed and underpinned by in-depth company research. The investment team seeks the best opportunities using the insights of Goldman Sachs Asset Management (GSAM)’s global, experienced and well-resourced teams, as well as having the ability to dynamically manage the portfolio’s interest rate sensitivity.

A wide opportunity set. We employ an integrated approach that allows us to invest across a full spectrum of equities and bonds, in both traditional and non-traditional segments of the market. The GS Global Income Builder Portfolio is a single investment solution offering exposure to a diverse mix of individual securities, across geographies and asset classes.

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Please see additional disclosures.

Financial investments carry a market risk. The value of assets in the portfolio is typically dictated by a number of factors, including the confidence levels of the market in which they are traded.

The Goldman Sachs Global Income Builder Portfolio may appeal to investors who are:

• Seeking a potential core holding for a portfolio focusing on income and growth

• Looking for a more conservative way to access equities

• Seeking potentially greater interest rate resiliency versus traditional bonds

• Looking to complement their other multi-asset class portfolios

Investor profile

Please see additional disclosures and refer to the glossary at the end of the brochure for investment terms. 7



Financial investments carry an operational risk. Material losses to the portfolio may arise as a result of human error, system and/or process failures, inadequate procedures or controls.

At a glance: GS Global Income Builder Portfolio

How does the fund invest?The fund is a dynamically managed portfolio of 150-300 securities, investing in both global bonds and equities. The portfolio’s baseline allocation is 60% to fixed income and 40% to equities, but it has the flexibility to tilt opportunistically by 15% above or below that split toward either asset class. This active management can give the portfolio more potential to adapt to changing conditions over time, reducing or adding risk as conditions change. For example, the overall asset allocation can be adjusted to a more conservative stance by tilting towards higher quality bonds, which can be less risky than equities or other parts of the fixed income universe. Alternately, in an environment of rising rates, the rate resiliency of the portfolio can be increased by adding more equities, as well as actively reducing the portfolio’s overall interest rate sensitivity. Our investment specialists are constantly monitoring yields as well as potential risks. GSAM is considered one of the industry leaders in the development of risk management methods and technology. Understanding the intricacies of risk management and its role in today’s market environment is an integral part of our investment culture.

Who is it managed by?The portfolio is managed by an investment committee that draws on the expertise and best investment ideas of GSAM’s Fundamental Equity and Fixed Income teams. They comprise of over 300 specialists who manage approximately US $450 billion in AUM* and have a proven track record of success in US-oriented Income Builder accounts. The investment committee facilitates a dynamic exchange of ideas and determines asset allocation, asset location and security selection.

* As of 31-Dec-13.The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.Please see additional disclosures and refer to the glossary at the end of the brochure for investment terms.8


As one of the world’s leading asset management firms, GSAM applies insights and risk management expertise to provide solutions for institutional and individual investors (via an adviser) to help meet their current and future financial goals.

• Our in-depth understanding of local economies, markets and cultures helps us provide global perspectives to our clients. We analyse firsthand, for example, how India’s demand for food can increase grocery prices in a different continent – or how Brazil’s production of sugar ethanol can affect the price of petrol at a service station in France.

• Analytical insights derived from such first-hand observations enable our teams to apply sound, thoughtful judgement when determining which investments to make.

About us

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GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIOGOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIO

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Business Development Company (BDC) – US company that invest in small and mid-sized businesses.

Master Limited Partnership (MLP) – A type of limited partnership company that is publicly traded on a securities exchange.

Real Estate Investment Trust (REIT) – Company that owns income-producing real estate, e.g. office buildings, shopping centres, hotels, etc.

Convertible Bond – Bond that can be converted into stock in the issuing company or cash.

High Yield Bond – Bond rated below Investment Grade.

Securitised Bond – Bond whose interest and principal payments are backed by the cash flows from a portfolio or pool of other assets.

Investment Grade Corporate Bonds – Bonds issued by companies with high credit ratings.

Preferred Stock – Stocks with properties of both and equity and debt instruments and with priority over common stock in the payment of dividends.

GLOSSARY

KEY FACTS

Domiciled in: Luxembourg

Geographical reach: Global

Launch date: 18 March 2014

Available currencies: USD, EUR, GBP

Legal form: A sub-fund of Goldman Sachs Funds SICAV, which is an investment company with segregated portfolios under Luxembourg law

R share class:

Currency: GBP Partially hedged

Income: Monthly distribution

Minimum investment: 3,000 GBP

Management fee: 0.60% p.a.

Operating expenses: 0.30% p.a.

Initial sales charge: Up to 5.5%

ISIN code: LU1046681943

Before making an investment in the fund, please ensure that you read the fund’s Key Investor Information Document (KIID), which is available at www.gsam.com/kiids.

Other share classes are available.

Please note that changes in foreign currency exchange rates can have a significant effect on the returns you may expect, as the share class you invest in may be denominated in a different currency to the assets of the fund or a different currency to your home currency.

GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIOGOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIO

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To find out more about the Goldman Sachs Global Income Builder Portfolio, or to access the latest fund information, please contact your financial adviser.

1 As of 31-Mar-14.2 As of 31-Mar-14.

This marketing material has been issued by Goldman Sachs International, which is authorised and regulated by the United Kingdom Financial Conduct Authority (FCA).

This material is provided at your request for informational purposes only and does not constitute a solicitation in any jurisdiction in which such a solicitation is unlawful or to any person to whom it is unlawful.

It only contains selected information with regards to the fund and does not constitute an offer to buy shares in the fund. Prior to an investment, prospective investors should carefully read the latest Key Investor Information Document (KIID) as well as the offering documentation, including but not limited to the fund’s prospectus which contains inter alia a comprehensive disclosure of applicable risks.

The relevant articles of association, prospectus, supplement, KIID and latest annual/semi-annual report are available free of charge from the fund’s paying and information agent and/or from your financial adviser.

Financial advisers generally suggest a diversified portfolio of investments. The fund described herein does not represent a diversified investment by itself. An investor should only invest if he/she has the necessary financial resources to bear a complete loss of this investment.

This material must not be construed as investment or tax advice. Prospective investors should consult their financial and tax adviser before investing in order to determine whether an investment would be suitable for them.

This material is not financial research and was not prepared by the Goldman Sachs Global Investment Research. It was not prepared in compliance with applicable provisions of law designed to promote the independence of financial analysis and is not subject to a prohibition on trading following the distribution of financial research.

The views and opinions expressed herein are valid as of the date of this publication only and may differ from the views and opinions expressed by the Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Goldman Sachs International has no obligation to provide any updates.

Further to above please note that the latest offering documentation is also available free of charge at Goldman Sachs International, Peterborough Court, 133 Fleet Street, London EC4A 2BB, United Kingdom.

© 2014 Goldman Sachs. All rights reserved. 127333.OSF.MED.OTU

GSAM – the key facts

• GSAM is one of the world’s leading investment managers.

• With more than 2,000 professionals across 32 offices worldwide, GSAM provides institutional and individual investors with investment and advisory solutions, with strategies spanning asset classes, industries and geographies1.

• GSAM has more than $935 billion in assets under supervision2.

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GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIO …€¦ · GOLDMAN SACHS GLOBAL INCOME BUILDER PORTFOLIO A SUB FUND OF GOLDMAN SACHS FUNDS, SICAV A core holding for your portfolio