SAS Market Perspectives - May23

Market Perspectives
Crunch Time
MARKET STRATEGY | STRATEGIC ADVISORY SOLUTIONS

MAY 2023
This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.
Executive Summary
Crunch Time
• Home Stretch: In our view, the Federal Reserve (Fed) must balance PREDICTING FED POLICY
sticky inflation and financial stress now that the drivers of tightened Market Implied Terminal Rate (%)
financial conditions have shifted from rate hikes to credit availability. 6 3/8/2023, 5.69
This evolution in macro uncertainty has driven recent volatility around
the terminal rate, which we now expect to stay at 5.00%–5.25%.
5
4.99
• Our Macro Base Case: Contrary to consensus expectations, we 4.58
believe the Fed can engineer a soft landing in the US due to 1) 4
encouraging progress in labor market rebalancing, 2) anchored long-
run inflation expectations, and 3) a well-positioned private sector with
3
few signs of structural imbalances.
• Investing Paradigm Shift: However, the hiking cycle has 2
fundamentally altered the investment opportunity set relative to the Mar-22 Jun-22 Sep-22 Dec-22 Mar-23
past decade. Cross-asset competition has intensified, with cost of
capital at the highest level it has been in 10 years. FAT AND FLAT EQUITY MARKETS
• Equity Implications: Beta exposure may no longer be enough. In S&P 500
aggregate, valuation expansion is limited by higher interest rates; 5000 Base case:
earnings growth is expected to be flat. As such, we believe alpha Soft landing
generation will require being 1) bottom-up, 2) globally exposed, 3) tax
efficient, and 4) income-oriented. 4000 4000
3750
• Fixed Income Implications: Opportunities for compelling yield are
now widely available in fixed income. Particularly, now may be the 3000 3150
time to lock in relatively stickier yields on longer-duration bonds.
Downside case:
Hard landing
2000
2018 2019 2020 2021 2022 2023 2024
Top Right Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. "Terminal rate" refers to the peak spot where the benchmark interest rate will come to rest before the central
bank begins trimming it back. Bottom Right Source: Bloomberg, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management. As of April 30, 2023. “Soft landing” refers to no
recession. “Hard landing” refers to a recession. “We” refers to Goldman Sachs Asset Management, Strategic Advisory Solutions. “Alpha” refers to returns in excess of a benchmark. The economic and
market forecasts presented herein are for informational purposes as of the date of this document. There can be no assurance that the forecasts will be achieved. Past performance does not guarantee
future results, which may vary.
Goldman Sachs Asset Management 1

Mixed Signals
Soft data prints have diverged from hard economic indicators
COMPONENTS INFORMING CURRENT ACTIVITY INDICATORS PERCEPTION VS. REALITY

Type Indicator
Breakdown of US Current Activity Indicators by Type (Ann. % change)
Hard Single-Family Existing Home Sales
Hard Single-Family New Home Sales
Hard Single-Family Building Permits
3.5
Hard Single-Family Housing Starts Hard CAI Soft CAI Total CAI
Hard Average Weekly Hours, Total Private
Hard Payrolls Diffusion Index
Hard Household Employment 2.5
Hard Unemployment Rate
Hard Nonfarm Payrolls
Hard Initial Jobless Claims
Hard Light Vehicle Sales 1.5
Hard Industrial Production
Hard Industrial Production Manufacturing
Hard Real Disposable Personal Income
Hard San Francisco Fed Tech Pulse Index 0.5
Hard Real Imports
Hard Real Exports
Hard Real Construction Spending
Hard Real PCE -0.5
Soft Conference Board Consumer Expectations
Soft UMich. Consumer Expectations
Soft ISM Nonmanufacturing Index
Soft Richmond Fed Services Index
-1.5
Soft NY Fed Business Leaders Index
Soft Markit PMI: Services
Soft ISM Manufacturing Index
Soft Chicago Manufacturing Index
Soft Markit PMI: Manufacturing -2.5
Soft Philadelphia Fed Manufacturing Index Apr '22 Jun '22 Aug '22 Oct '22 Dec '22 Feb '23 Apr '23
Soft Empire State Manufacturing Index
Soft NFIB Small Business Optimism
Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of April 30, 2023. Left Notes: Table shows 31 components making up the CAI. Right Notes: “CAI”
refers to Current Activity Indicators. Charts show the CAI, a summary measure of economic growth constructed from major monthly and weekly economic indicators, broken down by hard and soft data
(top). For illustrative purposes only.

Sources of Volatility
POLICY RATES LIQUIDITY DEBT CEILING FINANCIAL STRESS
5.13% $16.7mn $31.4tn -20%

Forecasted Fed terminal Five-day average S&P 500 Current federal debt ceiling, KBW Regional Banking
rate, reached in Futures Top-of-Book estimated to be breached Index decline from March 8
May 2023 Depth, below average this summer if not raised to April 30
US FINANCIAL CONDITIONS INDEX TIGHTENING ACROSS COMPONENTS

US Financial Conditions Index US Financial Conditions Index Movement in Past Year (bps)
Hiking Cycles Current
105
104
103
102
101
100
99
98
97
96
1990 1994 1998 2002 2006 2010 2014 2018 2022
Source: Goldman Sachs Global Investment Research, Bloomberg, Department of the Treasury, and Goldman Sachs Asset Management. All as of April 30, 2023 or latest available. The economic and
market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at
the end of this presentation. Bottom Notes: “US Financial Conditions Index” refers to a Goldman Sachs Global Investment Research Index designed to gauge the overall looseness or tightness of
financial conditions across the world’s major economies. Past performance does not guarantee future results, which may vary.

Sources of Stability
FINANCIAL CUSHION CORPORATES HOUSING LABOR
0.73% 5.4% 5% 3.8mn

Total loans and leases that Of US high yield debt Of households have an US jobs-workers gap,
are past due, vs. long-term maturing in 2023 or 2024 adjustable-rate mortgage, providing a potential buffer
average of 1.9% compared to 25% in 2006 to reduce labor demand
CAPITAL BUFFER INFLATION EXPECTATIONS

Average Common Equity Tier 1 Capital Ratio (%) US Long-Run Inflation Expectations (%)
4Q 2022 4Q 2008 (Aggregate) 10
13.10 760+
Great
8
Inflation
9.90
6 720-759
720-759
5.56 4 Great Moderation Reopening

660-719
2
620-659
620-659
<620
<620
0
G-SIBs Large Regional Banks 1979 1984 1989 1994 1999 2004 2009 2014 2019 2024
Top Source: Goldman Sachs Global Investment Research, Federal Reserve Economic Data, and Goldman Sachs Asset Management. All as of April 30, 2023 or latest available. “Past due” refers to
loans and leases that are 90 days or more past due or in a nonaccrual status. Bottom Left Source: Federal Reserve, Investment Strategy Group, and Goldman Sachs Asset Management. As of
December 31, 2022. “Common Equity Tier 1 Ratio” refers to a bank's capital, typically common stock, relative to its risk-weighted assets to determine its ability to withstand financial distress. “Aggregate
refers to 18 bank holding companies at the time. Average for Large Regional Banks is based on data for 15 regional banks using disclosures from their 10-K filings. Bottom Right Source: Bloomberg and
Goldman Sachs Asset Management. As of April 30, 2023. “US Long-Run Inflation Expectations” refers to University of Michigan 5-10 Year Inflation Expectations. Past performance does not guarantee

Macro

Macro Drivers
Below-trend growth globally
REAL GDP GROWTH
2023 (f) 2024 (f) Potential Our views:

Percent
2022
Change YoY GS Cons GS Cons GS • Globally, we see decelerating growth, elevated
inflation, and higher policy rates
US 2.1 1.6 1.1 1.5 0.8 1.8
Euro Area 3.5 0.9 0.6 1.3 1.0 1.1 • The US has an excess demand issue, with more
jobs than workers fueling strong wage growth
Japan 1.0 1.0 1.0 1.3 1.1 0.8
• The Euro area has an energy supply shock
UK 4.1 0.2 -0.2 0.6 0.9 1.4 issue, which is pushing up inflation and weighing
on growth
China 2.8 6.0 5.6 4.6 5.0 4.2
• The UK economy faces both issues
Russia -2.2 0.0 -1.7 1.8 1.5 1.2
Developed • Still, this cycle may be different: Labor market
2.6 1.2 0.9 1.4 1.2 - rebalancing, anchored long-term inflation
Markets
expectations, and a well-positioned private
Emerging sector act as macro buffers
3.4 4.2 4.2 4.0 4.4 -
Markets
World 3.0 2.5 2.5 2.6 2.7 2.6
Source: Bloomberg, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management. As of April 28, 2023. “GDP” refers to gross domestic product. “f” refers to forecast. “Cons.”
refers to consensus expectations. “YoY” refers to year over year. Some forecasts may be shaded to highlight data points. All forecasts refer to Goldman Sachs Global Investment Research. “Our views”
refers to Strategic Advisory Solutions, Goldman Sachs Asset Management. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There
can be no assurance that the forecasts will be achieved. Past performance does not guarantee future results, which may vary.

Inflation
Key drivers of inflation have transitioned from goods to services, with taming wage inflation key in the
Fed’s quest to ease inflation
DEMAND MAY DRIVE SUSTAINED INFLATION THE FED’S PLAYBOOK TO TAMING INFLATION
Core PCE Inflation by Sector (% change YoY) Percent
Current Est. Required Level
12 Core Services
Core Nondurable Goods
Core Durable Goods
10
5.1 5.1
8 4.4 4.6
3.5
6
4 2.0
1.6 1.4
1.1
2 0.8
0
Fed Funds GDP Growth Job-Workers Wage Growth Core PCE
Rate Gap
-2
-4
2006 2008 2010 2012 2014 2016 2018 2020 2022
Left Chart Source: US Census, Federal Reserve Economic Data, National Bureau of Economic Research, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management. As of
March 31, 2023. Right Chart Source: Current Population Survey, Bureau of Labor Statistics, Goldman Sachs Global Investment Research (GIR) and Goldman Sachs Asset Management. As of May 3,
2023. “GDP” refers to gross domestic product. “Core PCE” refers to personal consumption expenditures, excluding food and energy. All forecasts refer to Goldman Sachs Global Investment Research.
Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.

Monetary Policy
We expect the Fed to have reached its terminal rate, though we recognize a wide range of outcomes
with risk tilted towards cuts in the event of a potential growth contraction
POTENTIAL POLICY RATE PATH
Forecasted Fed Funds Rate Scenario Analysis (%)

8 Higher Inflation, More Hikes (20%)
GS Baseline (30%)*
Shallow Recession or Insurance Cuts (25%)**
7 Full Recession, Substantial Cuts (25%)**
0
Mar-22 Sep-22 Mar-23 Sep-23 Mar-24 Sep-24
Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of May 3, 2023. *The cuts in the baseline scenario are meant as a placeholder for an uncertain future
date when a material risk to growth emerges. **The recession scenarios show unrealistically slow cuts to capture many sub-scenarios of recessions starting at various points in time. The recession
scenarios reflect a subjective recession probability of 35% over the next 12 months and continued elevated risks thereafter. "Terminal rate" refers to the peak spot where the benchmark interest rate will
come to rest before the central bank begins trimming it back. For illustrative purposes only. The economic and market forecasts presented herein are for informational purposes as of the date of this
presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.

US Recessionary Drivers
Monetary policy has been the driving force behind the economic slowdown, though the Fed’s role in
the economy has evolved over time
KEY CONTRIBUTORS TO PAST US RECESSIONS
Recession Fiscal Industrial Oil Monetary Financial Medical

Aug 1918
Jan 1920
May 1923
Oct 1926
Aug 1929
May 1937
Feb 1945
Nov 1948
Jul 1953
Aug 1957
Apr 1960
Dec 1969
Nov 1973
Jan 1980
Jul 1981
Jul 1990
Mar 2001
Dec 2007
Mar 2020
2023?
Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of April 30, 2023. “2023?” row refers to potential risk of recession, not a forecast. For illustrative
purposes only. Purple shading refers to key contributors to past recessions. Past performance does not guarantee future results, which may vary.

Lack of Structural Imbalances
We believe the private sector is well-positioned, with leverage across households, corporates, and
banks muted relative to the Global Financial Crisis
FINANCIAL RISK
Financial Excess (Z-Score)
Pre-GFC (4Q 2006) Current

Government
2
Quantity of
Equity
1
Household Debt/Risk
-1
Commercial RE Nonfinancial Business
-2
Quality of
Debt/Risk Housing Financial Business
Business Credit Consumer Credit
Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of December 31, 2022. “GFC” refers to the global financial crisis. “Z-score” refers to a standardized
number of standard deviations by which the value of a raw score is above or below the average. Please see additional disclosures at the end of this presentation. For illustrative purposes only.

Macro Views and Risks
Key Takeaways
We believe:
• Slower economic growth is driven by tighter financial conditions and necessary to tame inflation.
• Financial sector risks may alter the Fed’s hiking campaign and economic growth, though impacts are uncertain.
• Still, there remains a narrow path to a soft landing through three factors: 1) reduction in the jobs-workers gap
without full-scale layoffs, 2) well-contained long-term inflation expectations, and 3) well-positioned private sector
with few signs of structural imbalances.
Key Risks
• A rise in US unemployment rate above 0.35 percentage points has historically coincided with a recession.
• Rapid Fed policy hikes may increase the risk of financial overtightening and a monetary policy-induced accident.
• Geopolitical flare-ups and financial sector instability may lift the risk baseline and invite spillover consequences.
Source: Goldman Sachs Asset Management. As of April 30, 2023. The economic and market forecasts presented herein are for informational purposes as of the date of this document. There can be no
assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.

Markets

Capital Market Forecasts
Current macro conditions reflect a broadening opportunity set across asset classes
Forecast Upside /
Downside to
Current 3m 6m 12m 12m TP (%)
Equities
S&P 500 4,135 4,000 4,000 4,000 -3 We believe that equities are likely to be resilient over
STOXX Europe 600 464 465 470 475 2 the long-term, though volatility may persist near-
MSCI Asia-Pacific Ex-Japan 512 535 550 610 19 term. Still, demand may moderate from historically
Topix (FY Basis) 2,033 2,000 2,050 2,200 8 high levels as other asset classes compete
10Y Rate (%) (bp)
US 3.6 3.8 3.9 3.8 25 We forecast global rates to level off reflecting the
Euro area (Germany) 2.5 2.8 2.8 2.6 14 impacts of past rate hikes, though the path of further
Japan 0.5 0.7 0.8 0.8 29 adjustment remains data-dependent
Currencies
€/$ 1.10 1.05 1.05 1.10 0 Global uncertainty and policy differentials may support
£/$ 1.25 1.18 1.19 1.25 0 a strong US dollar in the near term, though high
$/¥ 134 132 125 125 -7 valuation and cyclicality may be long-term headwinds
Commodities
Brent Crude Oil ($/bbl) 78 88 93 100 28
Supply-demand imbalances may partially offset
NYMEX Nat. Gas ($/mmBtu ) 2 3.3 3.3 3.0 27 recessionary risks and keep commodity prices firm,
London Gold ($/troy oz) 1,999 2,050 2,050 2,050 3 albeit with wide tails
LME Copper ($/mt) 8,466 9,500 10,000 11,000 30
Source: MSCI, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management. As of April 28, 2023. “TP” refers to Target Price. The economic and market forecasts presented
herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.

Investing in the Next Cycle
Past Cycle Ingredients Next Cycle Ingredients
Very Strong Growth Decelerating Growth
Falling Interest Rates Rising Interest Rates
Rising Profit Margins Stable Profit Margins
Low Starting Valuations Falling Valuations
Limited Market Volatility More Episodic Volatility
Annualized Return (%)

Forward-Looking Risk & Return
Historical Risk & Return
10Y Strategic Long-Term Assumptions
January 2013 – December 2022
14
S&P 500
12
10 60 S&P 500 /
40 US Agg
8
4
US Agg
0
0 2 4 6 8 10 12 14 16 18
Annualized Volatility (%)
Source: Goldman Sachs Asset Management. As of December 31, 2022. “US Agg” refers to the Bloomberg US Aggregate Bond Index. The Bloomberg US Aggregate Bond Index represents an
unmanaged diversified portfolio of fixed income securities, including US Treasuries, investment grade corporate bonds, and mortgage backed and asset-backed securities. “S&P 500” refers to the S&P
500 Index. The S&P 500 Index is the Standard & Poor’s 500 Composite Stock Prices Index of 500 stocks, an unmanaged index of common stock prices. The index figures do not reflect any deduction for
fees, expenses or taxes. It is not possible to invest directly in an unmanaged index. “Alpha” refers to excess returns. Expected returns are estimates of hypothetical average returns of asset classes
derived from statistical models. There can be no assurance that these returns can be achieved. Actual returns are likely to vary. Past performance does not guarantee future results, which may vary.
Volatility is measured by standard deviation. GS Multi-Asset Solutions Group (MAS). For illustrative purposes only. All numbers reflect MAS strategic assumptions as of December 31, 2022. Strategic
long-term assumptions are subject to high levels of uncertainty regarding future economic and market factors that may affect future performance. They are hypothetical indications of a broad range of
possible returns. Please see endnotes for Strategic Long-Term Assumptions.

1. Higher cost of capital
A higher cost of capital world has shifted the focus from top-line growth to bottom-line resilience
A NEW RATE REGIME
S&P 500 WACC (%)
3
2006 2010 2014 2018 2022
Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. “S&P 500” refers to the S&P 500 Index. “WACC” refers to weighted average cost of capital. Past performance does
not guarantee future results, which may vary.

2. Peaking profit margins
Higher input costs may weigh on margins, limiting earnings growth potential
PEAKING PROFIT MARGINS
S&P 500 ex. Energy Net Profit Margin (%) Recession

14
GS GIR
forecast
12
10
0
1990 1995 1999 2003 2007 2011 2015 2020 2024
Source: Factset, Compustat, Goldman Sachs Global Investment and Goldman Sachs Asset Management. As of April 30, 2023, reflecting 4Q 2022 earnings, latest available. Forecasts start January
2023. “S&P 500” refers to the S&P 500 Index. Net profit margin derived from net sales and net income of the prior four quarters. The economic and market forecasts presented herein are for
informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Past performance does not guarantee future results, which may vary.

3a. Falling equity valuations
Valuations have fallen from peak levels, but stretched multiples by historical standards suggest
moderating returns ahead
FALLING EQUITY VALUATIONS
S&P 500 Forward 10-Year Returns Annualized (%)

25
Current CAPE: 29 Peak CAPE in last cycle: 38
20
15
10
R2=0.64
0
-5
0 5 10 15 20 25 30 35 40 45 50
Cyclically Adjusted Price/Earnings (CAPE) Ratio
Source: Robert Shiller, Bloomberg, and Goldman Sachs Asset Management. As of April 30, 2023. Data from 1950 through 2023, though scatterplot stops in 2013 as chart requires 10-year forward S&P
500 returns. “R2” refers to a statistical measure of how close the data are to the fitted together. Past correlations are not indicative of future correlations, which may vary. Past performance does not
guarantee future results, which may vary. For illustrative purposes only.

3b. Falling equity valuations
Elevated real rates justify capped valuations, forcing earnings to drive returns
RATES AND VALUATIONS

Real 10-Year US Treasury Yield (%)
Avg. S&P 500 5-
Real 10-Year Avg. S&P
3.5 Year Forward
Rates Quintile 500 NTM P/E
Return (Ann., %)
3
2.5 Top 13.0x 9.4
Top Quintile
1.5 Second 13.9x 12.5
1 Second
0.5 Third Third 15.8x 12.7

Fourth
0
-0.5 Fourth 15.3x 13.7

Bottom Quintile
-1
-1.5 Bottom 17.0x 14.6

2007 2011 2015 2019 2023
Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. Quintiles are derived from real 10-Year US Treasury yields since 1/31/2007. Table shows the price-to-earnings ratio of
the S&P 500 Index derived from forward twelve-month earnings estimates. “NTM” refers to next-twelve months. “P/E” refers to Price/Earnings. Past performance does not guarantee future results,
which may vary.

4. More episodic volatility
Episodic volatility may create opportunities for differentiated sources of portfolio returns
INCREASING PRICE VOLATILITY
Number of Trading Days with S&P 500 Intraday Move Over 100 bp
250
200
150
100
50
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Source: Bloomberg Goldman Sachs Asset Management. As of April 30, 2023. Chart shows the count of intraday S&P 500 price movement of 1% or greater. “bp” refers to basis points. Intraday day price
movement derived from daily high, low, and closing price of the S&P 500 Index. Past performance does not guarantee future results, which may vary.

Cross-Asset Competition
Rising global interest rates means income has returned to fixed income
RATES IMPACTING EQUITY PRICES
10-Year US Treasury Yield (%)
Yield at which stock prices and rates become

5 negatively correlated:
2023YE: 3.9%
4 Adjusted for Today’s Lower
Equilibrium Rate: 3.4%
0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Source: Bloomberg, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management. As of April 30, 2023. The economic and market forecasts presented herein are for
informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past
performance does not guarantee future results, which may vary.

Positioning Within Fixed Income
Extending Duration – Why?
The relatively stickier yields on longer-duration bonds may prove valuable following the conclusion of
the current hiking cycle
YIELDS FOLLOWING FED HIKING CYCLES LOOKING LONG

Yield (%) Average Relative Yields following Conclusion of Fed Hiking Cycle (Multiple)
10 US Agg / 1-3 Year US Agg Ratio

2-Year US Treasury 10-Year US Treasury
End of Fed Hiking Cycle 2.3x

9
8 2x
5 1.2x
1.1x 1.1x
4
0
2000 2004 2008 2012 2016 2020 2024 0 6 12 18 24
Months Following Last Fed Hike
Left Chart Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. Chart shows the 2-Year US Treasury and 10-Year US Treasury yields since January 1, 2000. Shaded circles
are centered on the month-end dates of the final hike during the past three Fed hiking cycles, which are May 31, 2000, June 30, 2006, and December 31, 2018. Right Chart Source: Bloomberg and
Goldman Sachs Asset Management. As of April 30, 2023. “Yield” refers to the yield to worst, a measure of the lowest possible yield that can be received on a bond that fully operates within the terms of
its contract. Chart shows the average yield to worst of the Bloomberg US Aggregate Bond Index divided by the average yield to worst of the Bloomberg US Aggregate Bond: 1-3 Year Index at different
time periods following the end of the month of the last hike in the last three Fed hiking cycles. Past performance does not guarantee future results, which may vary.

Extending Duration – How?
Outperformance of HY and long-duration munis relative to short-dated US Treasuries exiting prior

hiking cycles presents an attractive case to extend duration with municipal bonds
TWO ROADS DIVERGED LOOKING LONG WITH MUNIS

Tax-Equivalent Yield (%) 12-Month Total Return Following Conclusion of Fed Hiking Cycle (%)
US Treasuries Municipal Bonds Treasury Bills HY Munis Long-Duration Munis

16
5.74 14
5.41 5.29 12
10
4.73
4.57
8
4.53 4.33
4.19
6
3.97 3.95
3.95
3.90 4
0
12 5 10 20 30 February 1995 May 2000 June 2006 December 2018
Maturity Date (Years)
Left Chart Source: Bloomberg and Goldman Sachs Asset Management. As of April 28, 2023. Right Chart Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. Chart shows
the average 12-month total returns US Treasury bills, long-duration municipal bonds, and high yield municipal bonds following the end of past four Fed hiking cycles. Goldman Sachs does not provide
accounting, tax, or legal advice. Please see additional disclosures at the end of this document. Past performance does not guarantee future results, which may vary.

Extending Duration – When?
We believe the time to consider adding duration is now as the 10Y UST returns have been maximized
when investing before the last hike in a Fed hiking cycle, rather than at or after the last hike
THE COST OF BEING LATE

10-Year US Treasury Bond Forward 12-Month Total Return (Average, %)
18.6
Being one month early to the end of past Fed hiking cycles generated > 500 bp of additional
performance versus being one month late
15.0 14.9
13.1
11.8
-3 -1 0 1 3
Months Before / After Last Hike in a Fed Hiking Cycle
Source: Source: Barclays and Goldman Sachs Asset Management. As of April 30, 2023. “UST” refers to US Treasury. “Fed” refers to the Federal Reserve. “Hiking Cycle” refers to a period where the
Federal Reserve is raising the federal funds rate. The last months of the prior six Fed hiking cycles used are August 1984, February 1989, February 1995, May 2000, June 2006, and December 2018.
Past performance does not guarantee future results, which may vary.

Positioning Within Equities
Addressing volatility
We believe taking advantage of stock dispersion may help increase after-tax returns
LOSSES EXIST IN ALL MARKETS EXPLOITING VOLATILITY MAY ENHANCE AFTER-TAX RETURNS
Proportion of S&P 500 Companies with Losses >-10% at Any Point in Year S&P 500 Performance (After-Tax Growth of $100)
96 1,250 S&P 500 S&P 500 with Monthly Tax-Loss Harvesting
83
70 1,000
68 68
46 750
45
40
37
500
20 21
250
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
100
S&P 500 Total 0

16 32 14 1 12 22 -4 31 18 29 -18 2002 2006 2010 2014 2018 2022
Return (%)
Left Chart Source: Goldman Sachs Asset Management. As of December 31, 2022. Chart shows both the proportion of S&P 500 companies within a calendar year that experienced a -10% drawdown at
any point in time and the calendar year’s S&P 500 total return. Right Chart Source: Bloomberg and Goldman Sachs Asset Management. As of January 31, 2023. “Direct indexing” refers to an investment
strategy where an investor holds the underlying constituents that make up an index. Chart shows the after-tax performance of the S&P 500 and the S&P 500 with monthly tax-loss harvesting based on
data from January 1, 2003 to January 31, 2023. Actual results may vary. Goldman Sachs does not provide accounting, tax, or legal advice. For illustrative purposes only. Please see additional
disclosures at the end of this document. Past performance does not guarantee future results, which may vary.

Positioning Within Equities
Managing active exposures: global, idiosyncratic, and concentrated
We believe being nimble, selective, and global is required for alpha generation going forward
POTENTIAL WEALTH CREATORS OF THE FUTURE TOP PERFORMING COMPANIES

Companies by Region Domicile of Top 50 MSCI ACWI Companies by Performance (%)
Africa & Middle East, 1% Latin America, 1% US International

Japan, 4%
Asia Pacific North

ex-Japan, America, 35%
25% 62
80 78
84 84 82 82
90 92 90
Europe, 33%
38
Characteristics of Potential Future Wealth Creators
20 22
16 16 18 18
10 8 10
Innovators Disruptors Enablers Adapters
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Left Chart Source: Datastream, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management. As of October 13, 2021. "Innovators" are broadly defined as companies using
new technologies. "Disruptors" are broadly defined as utilizing technology to disrupt other industries. "Enablers" are broadly defined as companies facilitating social and economic change. "Adapters" are
broadly defined as companies adapting business models to generate higher returns. Right Chart Source: MSCI, Bloomberg, and Goldman Sachs Asset Management. As of December 31, 2022. Past

Market Solutions
In a world of macro uncertainty, there may be a menu of asset classes serving as potential solutions
POTENTIAL SOLUTION SET FOR PREVAILING INVESTOR CONCERNS
FIXED INCOME EQUITIES ALTERNATIVES
Absolute
Direct Real Estate & Private
Core Municipal International Value Down-in-Cap Buy-Write Return
Indexing Infrastructure Credit
Strategies
Equity Volatility ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫
ALWAYS
Income
⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫
Generation
Tax Efficiency ⚫ ⚫ ⚫ ⚫
DEFENSIVE
Elevated Rates ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫
Recession Risk ⚫ ⚫ ⚫ ⚫
RECOVERY
Global Recovery ⚫ ⚫ ⚫ ⚫ ⚫ ⚫
Source: Goldman Sachs Asset Management. As of April 30, 2023. Goldman Sachs does not provide accounting, tax, or legal advice. Please see additional disclosures at the end of this presentation. A
Buy-Write strategy refers to an investment that receives call premium on an underlying equity position to generate income. This material is provided for educational purposes only and should not be
construed as investment advice or an offer or solicitation to buy or sell securities.

Market Views and Risks
Key Takeaways
We believe:
• Cross-asset competition may keep equity valuations capped, limiting return potential to earnings growth.
• Income will play an increasing role in securing portfolio returns relative to price appreciation.
• Potential risk asset opportunities ahead may be increasingly global, idiosyncratic, concentrated, and tax-aware.
Key Risks
• Challenged market liquidity may amplify market volatility.
• Markets are still not pricing in a recession, leaving them potentially vulnerable to downside risks.
• Corporate earnings and fundamentals may get squeezed from softening demand and margin pressure.
Source: Goldman Sachs Asset Management. As of April 30, 2023. The economic and market forecasts presented herein are for informational purposes as of the date of this document. There can be no
assurance that the forecasts will be achieved. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk. Please see additional disclosures at the
end of this presentation. Past performance does not guarantee future results, which may vary.

Appendix

Asset Class Outlook
Current macro conditions may invite cross-asset competition, broadening the opportunity set
Less Favorable More Favorable • Equities: We believe the likelihood of a recession and soft landing are relatively even, though left-tail
EQUITIES Shorter Term Longer Term risk has substantially deeper downside than an upside scenario. Consequently, defensive positioning
US Equities with a focus on quality and margin resilience remains appropriate as we expect valuation emphasis to
European Equities transition from rate- to earnings-based. Strong progress with China’s reopening, favorable European
Japanese Equities energy / weather conditions, and USD weakness may collectively improve the global opportunity set.
Emerging Market (EM) Equities • Rates: Peak hawkishness and the deepest level of curve inversion are likely behind us, though we
RATES expect to see room for global long-dated yields to rise further alongside higher terminal rates. Each
US Government Fixed Income central bank’s ability to carry out policy objectives may be constrained by regional vulnerabilities, such as
DM Government Fixed Income elevated consumer rate risk in the UK and fragmentation risk in the Euro area. Meanwhile, the Fed has
to balance financial sector risk as it aims to bring inflation down.
EM Debt Local
Municipal Bonds • Credit: The credit outlook is attractive: against the backdrop of resilient global growth, we not only
CREDIT observe attractive yields in global credit but also see a reasonable path for spreads to modestly tighten.
US Investment Grade Similarly, corporate liquidity buffers appear resilient, and strong starting balance sheets may prevent
US High Yield meaningful credit deterioration. Overall, we see strong total returns in credit over the course of the next
year, though potential rate increases, competition from cash, and lingering recession risks all remain key
Euro Area Corporates
risks. We prefer staying up-in-quality, especially in the Euro area.
Asia High Yield
EM Debt Hard • Real Assets: Commodity markets are increasingly being split between macro headwinds and micro
REAL ASSETS tailwinds. China’s reopening and growth concerns in the US, UK, and Europe may continue to dictate
demand, while limited supply and a weakening dollar may still act as tailwinds. Additionally, spillovers
Oil
from geopolitical risks may present unique challenges to energy and metal production, further bolstering
Copper
prices. Ultimately, we think fundamentals can offset economic tightening. Structural tailwinds and
Gold attractive distribution yields support continued global demand for real estate and infrastructure, which
Global Real Estate may further benefit from inflation pass-through, increasing the sustainability of revenues and margins
CURRENCIES amid a challenging growth backdrop.
US Dollar
• FX: Variation in regional inflation, monetary policy, and growth backdrops may continue to drive currency
Euro
movements. The greenback is likely past its peak, but strong USD positioning should limit dollar
British Pound downside in the immediate term. Longer-term dollar weakness should be driven by steadily declining
Japanese Yen inflation and moderating domestic growth keeping monetary policy in line with expectations. Improving
Chinese Renminbi global growth outlooks, specifically stemming from the Euro area and China support foreign currency
strength. Upside risks remain as a strong US labor market could invite a more hawkish Fed.
Source: Goldman Sachs Asset Management. As of April 30, 2023. For illustrative purposes only. Asset Class Outlook is informed by Goldman Sachs Asset Management, Goldman Sachs Global
Investment Research, and Goldman Sachs Investment Strategy Group views. “Up-in-quality” refers to higher-rated credit. “Shorter Term” view refers to less than 6 months. “Longer Term” view refers to
1–5 years. Individual portfolio management teams for Goldman Sachs Asset Management may have views and opinions and/or make investment decisions that, in certain instances, may not always be
consistent with the views and opinions expressed herein. Please see additional disclosures at the end of this presentation.

US Equities
Income-oriented equities look attractive given capped valuations and challenged earnings
EARNINGS FORECASTS SOURCES OF RETURN

S&P 500 Forecasted EPS Growth (%, YoY) S&P 500 Index Total Return Decomposition (%)
Consensus GS Forecast GS Recession Scenario Multiple Expansion Earnings Growth Dividend Yield
12
2
2
0 2
70
2022 2023 2024
2
-4 2
39
2 33
2 2
17 23 2
-8 5 2
10 6
7 6 1
4 3
1 3
-12 -11
-22
-29 -26
EPS ($): $222 $224 $237
-43
Recession
$200
EPS ($): 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E
Left Chart Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of April 30, 2023. Right Chart Source: S&P Global, Bloomberg, Goldman Sachs Global
Investment Research, and Goldman Sachs Asset Management. As of April 30, 2023. The economic and market forecasts presented herein are for informational purposes as of the date of this
presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results,
which may vary.

US Equities
Near-term cash flows, stable earnings, and cost management are among the most important
attributes being rewarded by markets
RETURN DRIVERS
Relative Importance of Variable in Explaining S&P 500 Stock FY2 P/E (Standardized Coefficient)
0.5
2002-2019 average Today
0.4
0.3
0.2
0.1
0.0
(0.1)
Equity Duration Net Margins Earnings Stability Near-term Growth Balance Sheet Market Cap Asset Turnover
Expectations Strength
Variable
Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of February 28, 2023. Chart shows quarterly observations since 2002, excluding financials and real
estate. Specifically, chart compares the relative importance of each variable in explaining price/earnings ratio for the S&P 500 over 2002-2019 and the current period. “R2” refers to a statistical measure
of how close the data are to the fitted together. Past correlations are not indicative of future correlations, which may vary. Past performance does not guarantee future results, which may vary. For
illustrative purposes only.

US Equities
Earnings may remain vulnerable to a recession, which if realized, would weigh further on prices
RECESSIONARY EARNINGS RECESSIONARY RETURNS

Peak to Trough LTM S&P 500 EPS Decline Around 12 Recessions (%) Peak-to-Trough S&P 500 Price Decline Around 12 Recessions (%)
'48 '53 '57 '60 '70 '73 '80 '81 '90 '01 '08 '20 '23 '48 '53 '57 '60 '70 '73 '80 '81 '90 '01 '08 '20 '23
0 0
-2 -3
-3
-10 -8 -10
-12 -13 -10
Median: -13% -13 -14
-14 -15
-17 Recession -17
-20 Forecast -20 -20
-20 -21
-22
-23
Median: -24%
-27
-30 -30
-34
-36 -34
-40 -40 Recession
Forecast
-45
-50 -50 -48 -49
-57
-60 -60
Left Chart Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of April 30, 2023. Right Chart Source: Goldman Sachs Global Investment Research and
Goldman Sachs Asset Management. As of April 30, 2023. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no
assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.

International Equities
European equities may be better positioned to withstand the cross-asset competition of rising global
yields given a starting point of higher dividend income and lower valuations
REASONABLE VALUATIONS ATTRACTIVE INCOME

12m forward P/E (x) Yield (%)
+/-1 Stdev Current Median
STOXX 600 Dividend Yield German 10-Year Bund Yield
8
40 High / low
7
6
30
19.3
20 4
13.5
13.7
12.4 3
10.9 10.8
10 2
0
USA Dev. UK EM Japan China 0
Europe
-1
2010 2012 2014 2016 2018 2020 2022
Left Section Source: MSCI, Bloomberg, and Goldman Sachs Asset Management. As of April 30, 2023. Right Section Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023.
The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see
additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.

Sustained periods of US dollar weakness may provide an additional tailwind for international equities,
with past returns boding well
US DOLLAR WEAKNESS BOOSTING EQUITIES OUTSIDE THE US

MSCI EAFE Total Forward One-Year Return (Average, %)
14.4
9.5 9.9
7.2
2.4
US Dollar Weakness US Dollar Strength

-7.2
Less than -10% -10% to -5% -5% to 0% 0% to 5% 5% to 10% Greater than 10%
Direction of USD Movements
Source: MSCI, Bloomberg, and Goldman Sachs Asset Management. As of April 30, 2023. Chart shows average total returns for MSCI EAFE Index over different movements in the US dollar index going
back to 1990. Returns reflect daily data over rolling years. Past performance does not guarantee future results, which may vary.

A strong reopening in China may have positive spillover effects on European economies given their
large export exposure
CHINA BRIGHT SPOTS

Trade Sensitivity to China Reopening (% of GDP)
6
Exports to China Exports to Asia Ex. China
0
Germany Euro Area Finland Sweden France UK Italy Norway Spain Poland
Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of January 31, 2023. “GDP” refers to gross domestic product. Chart shows the trade exposure of
select European countries to China and Asia excluding China. Data is measured as percent of a country’s GDP. Past performance does not guarantee future results, which may vary.

Emerging Market Equities
A weakening US dollar alongside China’s recovery may unlock upside in emerging market equities
RECENT EM RECOVERY CHINA RALLIES HAVE DRIVEN ALPHA IN LATAM AND NORTH ASIA
MSCI EAFE MSCI EM (Left) US Dollar Spot MSCI EM Performance During Historical China Rallies (%)
US Dollar Spot Price (Right, Inverted)
1600 US Dollar Peak 60
35
1400 70
1200 24
80
1000 19
90 15
14 14
800 12 12 12
11
100 9
600 6
110
400
Jun '13 - Sep '13
Dec '16 - Nov '17

Sep '12 - Jan '13
Feb '11 - Apr '11
Oct '11 - Feb '12
May '14 - Sep '14
Feb '16 - Apr '16
Dec '20 - Feb '21

Jul '16 - Sep '16
Jan '19 - Apr '19
Oct '19 - Jan '20

Mar '15 - Apr '15
200 120
0 130
Left Chart Source: MSCI, Bloomberg, and Goldman Sachs Asset Management. As of April 30, 2023. Right Chart Source: MSCI, Goldman Sachs Global Investment Research, and Goldman Sachs Asset
Management. As of January 9, 2023. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.
Rates
The Fed appears to be at the end of its hiking cycle, though uncertainty remains about policy cuts
MODERATING, BUT HIGHER YIELDS POLICY DEPENDENT ON THE PATH OF INFLATION
US Treasury Yield Curve (%) Forecasted Fed Funds Rate (%)
GS GIR Market Pricing

6.0 2023 YE Forecast (GS GIR) December 30, 2022 6.0
5.5
5.5
5.0
5.0
4.5
4.5
4.0
4.0
3.5
3.5 3.0
Fed 3m 6m 1y 2y 3y 5y 7y 10y Current Jun Jul Sep Nov Dec Jan
Funds Maturity
Left Chart Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of May 3, 2023. Right Chart Source: Bloomberg, Goldman Sachs Global Investment
Research, and Goldman Sachs Asset Management. As of May 3, 2023. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can
be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may vary.
Credit
Credit spreads may tighten and fundamentals appear to remain intact, though defaults may return to
long-run averages
CONTINUED SPREAD NORMALIZATION CONTAINED DEFAULT RISK
Default Rate (%)
Sector Current 2023 4Q Δbps 20

Europe US
USD Spreads (bps) 18
IG 137 115 -22 16
IG Fin 160 122 -38 14
12
IG Non-Fin 125 110 -15
10
HY 466 390 -76
8
EUR Spreads (bps)
6
IG 178 145 -33
4
IG Fin 227 165 -62
IG Non-Fin 148 127 -21 2
HY 474 405 -69 0

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. Left Chart: As of April 27, 2023. Right Chart: As of March 31, 2023. Chart shows the rolling 12-month
default rate for high yields bonds in Europe and the US. Past performance does not guarantee future results, which may vary. The economic and market forecasts presented herein are for
informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation.

Credit
Corporate debt payments remain manageable with a low wall of maturity and high interest coverage
DEBT MATURITY SCHEDULE INTEREST COVERAGE RATIOS FOR IG AND HY CREDIT

US Maturity Wall (%) Interest Coverage Ratio for Median Company in North America
25 IG (% of outstanding IG)
8x
HY (% of outstanding HY) IG HY
20
6x
15
4x
10
2x
5
0 0x
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043 - On
1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2020 2022
Left Chart Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management. As of April 30, 2023. Right Chart Source: Goldman Sachs Global Investment Research and
Goldman Sachs Asset Management. As of December 31, 2022, latest available. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation.
There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee future results, which may
vary.

Emerging Market Debt
EMD has displayed sensitivity to local and US growth, US yields, and US dollar strength
EMD SENSITIVITY TO MACRO FORECASTS VULNERABILITY CONCENTRATED IN DOWN-IN-QUALITY
Index-level Sensitivity to Changes in Macro Variables (bp) Spread Relative to Treasuries (pp)
15 EMBI IG EMBI HY (BB and B-rated) 16 Bloomberg Emerging Markets High Yield Aggregate: Ba
Bloomberg Emerging Markets High Yield
Wider spreads
14
10
12
5 10
8
0
-5
4
2
-10
EM Growth US Growth US 2-Year DXY Total
Yields 0
GS GIR Forecast (12 Months Ahead) 2003 2008 2013 2018 2023
Left Chart Source: Bloomberg, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management. As of February 6, 2023. “BB” and “B” refers to issuer credit rating. “Bp” refers to
basis point. Analysis is based on ordinary least squares regressions of monthly changes in the 6-month moving average of index level spreads, to monthly changes in the 6-month moving average of GS
EM CAI, US CAI, 2yr UST yields, and the DXY. Sensitivity is estimated from 2009-2019. Right Chart Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. Chart shows the
option-adjusted credit spreads for both EMD HY and EMD HY: Ba rated indices. “Pp” refers to percentage points. The economic and market forecasts presented herein are for informational purposes as
of the date of this presentation. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this presentation. Past performance does not guarantee

Municipal Bonds
Challenging technical backdrop in the last year may reverse following the great yield reset
DEMAND FOR MUNICIPAL BONDS MAY RECOVER YIELDS ARE ATTRACTIVE ON A TAX EQUIVALENT BASIS
Municipal Bond Flows ($ billion) Tax-Equivalent Yields (%)

High Yield Funds Intermediate Funds Long Funds
10.0
4.1 9.62
5.0
1.3 1.3 8.47
0.0 7.57
-2.1 -2.3
-5.0
-5.4 5.38
-6.2 5.18
-10.0 -7.8
-9.4
-11.3 3.42
-15.0
-15.8
-20.0
-25.0
Muni US 10-Year Muni US Muni US
-30.0 -27.7 Treasury Corporate Corporate
2Q 2022 3Q 2022 4Q 2022 1Q 2023 AAA BAA High Yield
Left Chart Source: Morningstar and Goldman Sachs Asset Management. As of March 31, 2023. Right Chart Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. A 40.8%
tax rate is used to calculate tax-equivalent yield. “AAA” refers to the AAA-rated portion of the Bloomberg Municipal Bond Index. “BAA” refers to the BAA-rated portion of the Bloomberg Municipal Bond
Index. Yields do not reflect the performance for any Goldman Sachs product. Goldman Sachs does not provide accounting, tax or legal advice. Please see additional disclosures at the end of this
document. Past performance does not guarantee future results, which may vary.

Municipal Bonds
Credit quality remains strong due to federal aid, elevated tax receipts, and ample cash balances
ELEVATED INCOMES AMPLE CASH BALANCES
State and Local Government Income ($, bn) State Rainy Day Fund Balances ($, bn)
Recession Current Tax Receipts Federal Grants
2500 Balance (LHS) Percentage of Expenditures (RHS)
140 14
120 12
2000
100 10
1500
80 8
60 6
1000
40 4
500
20 2
0 0 0
1988 1993 1998 2003 2008 2013 2018 2023
Left Chart Source: US Bureau of Economic Analysis and Goldman Sachs Asset Management. As of March 31, 2023, latest available. Right Chart Source: National Association of State Budget Offices
and Goldman Sachs Asset Management. As of February 6, 2023. Figures for fiscal 2021 are preliminary actual; figures for fiscal 2022 and 2023 are projected based on enacted budgets. Figures for
fiscal 2022 exclude Georgia, Texas, and Wisconsin. Please see additional disclosures at the end of this document. Past performance does not guarantee future results, which may vary.

Commodities
We believe the interplay of macro developments and supply dynamics may allow prices to grind
higher
USD MOVEMENTS IMPACTING COMMODITY PRICES SUPPLY CONSTRAINTS
Bloomberg Commodity Index USD Trade Weighted Index Rig Count United States Baker Hughes Rig Count (LHS) $/bbl
1800 WTI (RHS) 160
160 Bloomberg Commodity Index (LHS) 105
Current WTI
US Dollar Trade Weighted Index (RHS, Inverted)
150 140
1500
110
140
120
130 1200
100
115
120
900 80
110
120
60
100 600
40
90
125
300
80 20
70 130 0 0
Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 1990 1994 1998 2002 2006 2010 2014 2018 2022
Left Chart Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. Right Chart Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. Past

Volatility & Liquidity
Volatility may be amplified by low liquidity
FREQUENCY
S&P 500 Daily Price Δ

± 1% ± 2% ± 3% ± 4% ± 5%
(days)
Avg 62 18 7 3 2
Bear Market Avg 87 31 13 7 3
2022 122 46 12 3 1
2023 YTD 32 2 0 0 0
TOP-OF-BOOK LIQUIDITY
E-Mini S&P 500 Future Top-of-Book Depth (5-day average, $mn)

50
40
30
20
10
0
2018 2019 2020 2021 2022 2023
Top Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. “Bear market” refers to a period when a market experiences prolonged price declines. Bottom Source: Goldman
Sachs Global Investment Research. As of April 30, 2023. “Top-of-book liquidity” refers to the liquidity of the highest bid and the lowest ask in an order book. “Volatility” is a measure for variation of price
of a financial instrument over time. Past performance does not guarantee future results, which may vary.

Clustering of Volatility
The worst days in the market often invite the best days in the market
DAILY PRICE VOLATILITY

Largest Daily Total Returns for the S&P 500 from 1997 – 2022 (%)
15
Worst 50 Days Best 50 Days
10
-5
-10
-15
1997 2002 2007 2012 2017 2022
Source: Bloomberg and Goldman Sachs Asset Management. As of April 30, 2023. “Volatility” is a measure for variation of price of a financial instrument over time. Past performance does not
guarantee future results, which may vary.

Glossary and Risk Considerations
Additional Notes
Page 24 Right Notes: After-tax performance considers the S&P 500 index return on top of the hypothetical capital gains saved by realizing losses at the combined long-term capital gains and net
investment income tax rate of 23.8%. Cost basis is calculated on a monthly basis with adjustments made annually to reflect gains/losses and taxes paid. Analysis assumes that all capital gains/losses are
categorized as long-term and fall under the long-term tax rate. Short-term capital gains taxes are excluded for conservatism. Dividend income paid in 2002 is taxed at the ordinary income tax rate
(40.8%). For all other years after, dividend income is considered qualified dividend income and taxed at the combined long-term capital gains and net investment income tax rate (23.8%). Index returns
are used as a proxy for baskets of similar stocks. Analysis does not factor in wash sale rules. Actual results may vary. Goldman Sachs does not provide accounting, tax, or legal advice.
Equities
The S&P 500 Index is the Standard & Poor’s 500 Composite Stock Prices Index of 500 stocks, an unmanaged index of common stock prices. The index figures do not reflect any deduction for fees,
expenses or taxes. It is not possible to invest directly in an unmanaged index.
The Euro Stoxx 600 Index represents the performance of 600 publicly-traded companies based in one of 18 EU countries.
The TOPIX Index is a free-float adjusted market capitalization-weighted index that is calculated based on all the domestic common stocks listed on the Tokyo Stock Exchange First Section.
The MSCI Asia Pacific ex-Japan Index captures large and mid cap representation across 4 of 5 Developed Markets countries (excluding Japan) and 9 Emerging Markets countries in the Asia Pacific
region.
The MSCI EAFE is an equity index which captures large and mid cap representation across 21 Developed Markets countries around the world, excluding the US and Canada.
The MSCI All Country World Index is designed to represent performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 24 emerging markets.
Fixed Income
The 10-Year Treasury is a US Treasury debt obligation that has a maturity of 10 years.
The Bloomberg U.S. Aggregate Bond Index measures the performance of investment grade, U.S. dollar-denominated, fixed rate taxable bond market, including Treasuries, government-related and
corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS.
The Bloomberg Municipal Bond Index tracks the market for tax-exempt municipal securities in the US.
Other
Euro area refers to the Eurozone. The Eurozone is comprised of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal,
Slovakia, Slovenia, and Spain.
Volatility is a measure of variation of a financial instrument’s price.
Risk Considerations
Equity securities are more volatile than fixed income securities and subject to greater risks. Small and mid-sized company stocks involve greater risks than those customarily associated with larger
companies.
Investments in foreign securities entail special risks such as currency, political, economic, and market risks. These risks are heightened in emerging markets.
Emerging markets securities may be less liquid and more volatile and are subject to a number of additional risks, including but not limited to currency fluctuations and political instability.
An investment in real estate securities is subject to greater price volatility and the special risks associated with direct ownership of real estate.
Investments in fixed-income securities are subject to credit and interest rate risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the
decline in the bond’s price. Credit risk is the risk that an issuer will default on payments of interest and principal. This risk is higher when investing in high yield bonds, also known as junk bonds, which
have lower ratings and are subject to greater volatility. All fixed income investments may be worth less than their original cost upon redemption or maturity.
Buy-write strategies are subject to market risk, which means that the value of the securities in which it invests may go up or down in response to the prospects of individual companies, particular sectors
and/or general economic conditions. They are also subject to the risks associated with writing (selling) call options, which limits the opportunity to profit from an increase in the market value of stocks in
exchange for up-front cash at the time of selling the call option. In a rising market, the strategy could significantly underperform the market, and the options strategies may not fully protect it against
declines in the value of the market.

Risk Considerations and General Disclosures
Bonds are subject to interest rate, price and credit risks. Prices tend to be inversely affected by changes in interest rates.
Although Treasuries are considered free from credit risk, they are subject to interest rate risk, which may cause the underlying value of the security to fluctuate. Income from municipal securities is
generally free from federal taxes and state taxes for residents of the issuing state. While the interest income is tax-free, capital gains, if any, will be subject to taxes. Income for some investors may be
subject to the federal Alternative Minimum Tax (AMT).
Investments in commodities may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or factors affecting a particular industry or commodity.
The currency market affords investors a substantial degree of leverage. This leverage presents the potential for substantial profits but also entails a high degree of risk including the risk that losses may
be similarly substantial. Such transactions are considered suitable only for investors who are experienced in transactions of that kind. Currency fluctuations will also affect the value of an investment.
The above are not an exhaustive list of potential risks. There may be additional risks that are not currently foreseen or considered.
General Disclosures
Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. It should not be assumed that investment
decisions made in the future will be profitable or will equal the performance of the securities discussed in this document.
This material is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities. This material is not intended to be used as a
general guide to investing, or as a source of any specific investment recommendations, and makes no implied or express recommendations concerning the manner in which any client’s account should
or would be handled, as appropriate investment strategies depend upon the client’s investment objectives.
THIS MATERIAL DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY JURISDICTION WHERE OR TO ANY PERSON TO WHOM IT WOULD BE UNAUTHORIZED OR UNLAWFUL TO
DO SO.
Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which
might be relevant.
Goldman Sachs does not provide legal, tax or accounting advice, unless explicitly agreed between you and Goldman Sachs (generally through certain services offered only to clients of Private Wealth
Management). Any statement contained in this presentation concerning U.S. tax matters is not intended or written to be used and cannot be used for the purpose of avoiding penalties imposed on the
relevant taxpayer. Notwithstanding anything in this document to the contrary, and except as required to enable compliance with applicable securities law, you may disclose to any person the US federal
and state income tax treatment and tax structure of the transaction and all materials of any kind (including tax opinions and other tax analyses) that are provided to you relating to such tax treatment and
tax structure, without Goldman Sachs imposing any limitation of any kind. Investors should be aware that a determination of the tax consequences to them should take into account their specific
circumstances and that the tax law is subject to change in the future or retroactively and investors are strongly urged to consult with their own tax advisor regarding any potential strategy, investment or
transaction.
Neither MSCI nor any other party involved in or related to compiling, computing, or creating the MSCI data makes any express or implied warranties or representations with respect to such data (or the
results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability, or fitness for a particular purpose with
respect to any of such data. Without limiting any of the foregoing, in no event shall MSCI, any of its affiliates or any third party involved in or related to compiling, computing or creating the data have any
liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages. No further distribution or dissemination of the
MSCI data is permitted without MSCI’s express written consent.
The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.
Strategic Long-Term Assumptions

Alpha and tracking error assumptions reflect Multi-Asset Solutions’ estimates for above-average active managers and are based on a historical study of the results of active management. Expected
returns are estimates of hypothetical average returns of economic asset classes derived from statistical models. There can be no assurance that these returns can be achieved. Actual returns are likely
to vary. Please see additional end disclosures. The data regarding strategic assumptions has been generated by MAS for informational purposes. As such data is estimated and based on a number of
assumptions; it is subject to significant revision and may change materially with changes in the underlying assumptions. MAS has no obligation to provide updates or changes. The strategic long-term
assumptions shown are largely based on proprietary models and do not provide any assurance as to future returns. They are not representative of how we will manage any portfolios or allocate funds to
the asset classes.
Expected return portfolios apply statistical methods and a series of fixed assumptions to derive estimates of hypothetical average asset class performance. Reasonable people may disagree about the
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Index Benchmarks
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SAS Market Perspectives - May23

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SAS Market Perspectives - May23

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Market Perspectives

MARKET STRATEGY | STRATEGIC ADVISORY SOLUTIONS

Goldman Sachs Asset Management 1

Soft data prints have diverged from hard economic indicators

COMPONENTS INFORMING CURRENT ACTIVITY INDICATORS PERCEPTION VS. REALITY

Goldman Sachs Asset Management 2

POLICY RATES LIQUIDITY DEBT CEILING FINANCIAL STRESS

5.13% $16.7mn $31.4tn -20%

US FINANCIAL CONDITIONS INDEX TIGHTENING ACROSS COMPONENTS

Goldman Sachs Asset Management 3

FINANCIAL CUSHION CORPORATES HOUSING LABOR

0.73% 5.4% 5% 3.8mn

CAPITAL BUFFER INFLATION EXPECTATIONS

5.56 4 Great Moderation Reopening

Goldman Sachs Asset Management 4

Goldman Sachs Asset Management 5

Below-trend growth globally

REAL GDP GROWTH

2023 (f) 2024 (f) Potential Our views:

Goldman Sachs Asset Management 6

Goldman Sachs Asset Management 7

Forecasted Fed Funds Rate Scenario Analysis (%)

Goldman Sachs Asset Management 8

Recession Fiscal Industrial Oil Monetary Financial Medical

Goldman Sachs Asset Management 9

Pre-GFC (4Q 2006) Current

Business Credit Consumer Credit

Goldman Sachs Asset Management 10

Goldman Sachs Asset Management 11

Goldman Sachs Asset Management 12

Goldman Sachs Asset Management 13

Falling Interest Rates Rising Interest Rates

Rising Profit Margins Stable Profit Margins

Low Starting Valuations Falling Valuations

Limited Market Volatility More Episodic Volatility

Annualized Return (%)

Goldman Sachs Asset Management 14

A NEW RATE REGIME

S&P 500 WACC (%)

Goldman Sachs Asset Management 15

PEAKING PROFIT MARGINS

S&P 500 ex. Energy Net Profit Margin (%) Recession

Goldman Sachs Asset Management 16

S&P 500 Forward 10-Year Returns Annualized (%)

Cyclically Adjusted Price/Earnings (CAPE) Ratio

Goldman Sachs Asset Management 17

RATES AND VALUATIONS

2.5 Top 13.0x 9.4

0.5 Third Third 15.8x 12.7

-0.5 Fourth 15.3x 13.7

-1.5 Bottom 17.0x 14.6

Goldman Sachs Asset Management 18

INCREASING PRICE VOLATILITY

Goldman Sachs Asset Management 19

RATES IMPACTING EQUITY PRICES

10-Year US Treasury Yield (%)

Yield at which stock prices and rates become

Goldman Sachs Asset Management 20

YIELDS FOLLOWING FED HIKING CYCLES LOOKING LONG

10 US Agg / 1-3 Year US Agg Ratio

End of Fed Hiking Cycle 2.3x

Goldman Sachs Asset Management 21

Outperformance of HY and long-duration munis relative to short-dated US Treasuries exiting prior