And Now For Something Completely Different

Market Know How Edition 3: And Now For Something Completely Different

It was exactly fifty years ago that Monty Python’s Flying Circus proclaimed “And now for something completely different.” It was also precisely fifty years ago that the US withdrew from the gold standard, thus ushering in a “completely different” era of monetary policy arrangements, inflation dynamics, and market relationships. Paradigm shifts may be infrequent but, when they occur, they can have profound consequences.

This edition of the Market Know-How coincides with another moment where the future could potentially look “completely different” from the recent past. As the global economy begins to reopen we will discover over the next few months what the new post-COVID-19 “normal” looks like: will inflation prove to be sticky in a way we haven’t seen for decades, and will central banks have an increased tolerance for that? Will taxes have to rise to recoup the costs of the fiscal largesse? Should we be recalibrating valuation models to reflect structural changes to crossmarket relationships?

The next phase of the recovery may prove to be a paradigm shift: a move into a world of “completely different” macro and market relationships to those which we have been accustomed to in recent years. Hence, the last decade’s successful portfolio allocation may require adjustments for the years ahead. In this Market Know-How we explore how some of those factors may shape the investment landscape.

We emphasize:

Elevating the importance of income and broadening out to non-traditional investments.
Focusing on strategies seeking to increase portfolio resilience and capitalize on normalizing rates and inflation.
Evaluating risk and return characteristics for digital assets, and staying on top of transformative trends impacting the investing landscape.

Macro & Market Views

Global Growth

The combination of strongly pro-cyclical fiscal and monetary policies in most major economies, in conjunction with households’ pent-up consumption, means that the global economy is currently enjoying its strongest period of growth in decades. Although momentum should inevitably fade as the reopening restores some semblance of normality, the global outlook for 2022 is one of continued above-potential activity. Thereafter, we expect 2023 will return to a lower but more sustainable and historically normal pace of expansion.

Source: Goldman Sachs Global Investment Research and Goldman Sachs Asset Management.

US Equities

Following an impressive policy-fueled, vaccine-led recovery, we believe the US equity cycle is transitioning back to fundamentals. While full valuations and a moderating forward-return environment may temper our optimism, equities remain our preferred asset class. As we enter the longest phase of the equity cycle – the growth phase - corporate earnings, positive investor sentiment, and increased confidence around the sustainability of the recovery may continue to drive returns.

Source: Robert Shiller, Haver, Datastream, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management.

Intro Section Notes: Source: Goldman Sachs Asset Management. Views and opinions expressed are for informational purposes only and do not constitute are recommendation by Goldman Sachs Asset Management to buy, sell, or hold any security. Views and opinions are current as of August 2021 and may be subject to change, they should not be construed as investment advice. 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 page.

Top Section Notes: As of August 2, 2021. “Real GDP” refers to Gross Domestic Product adjusted for inflation. Estimates reflect year-over-year (YoY) changes. The economic and market forecasts presented herein are for informational purposes as of the date of this page. There can be no assurance that the forecasts will be achieved. Please see additional disclosures at the end of this page. Bottom Section Notes: As of July 31, 2021. Data from 1973 onward, non-annualized. Excludes the current equity cycle. Chart shows the S&P 500 averages across each phase of the equity cycle: Despair, Hope, Growth, and Optimism. “Despair” refers to the first period where the market moves from peak to trough. “Hope” refers to the following period where the market rebounds from its trough through P/E expansion. “Growth” refers to the following period when earnings growth drives returns. “Optimism” refers to the final period where returns are driven more by P/E multiple expansion than earnings growth. The number of months in parentheses is the average historical duration of each phase of the cycle. Past performance does not guarantee future results, which may vary.

Tax: Rates may move back to long-term averages

Outlook

Tax: Rates may move back to long-term averages

Expectations vs. Reality

With public spending at record highs, and tax rates at historically low levels, tax rates are likely moving higher in the future. The Biden administration has proposed to revert the top individual income rate to 39.6%, which we think could be achieved, and to raise the top capital gains rate to 43.4%, which may get negotiated down to 28%. Importantly, higher taxes should not materially change capital market opportunities. However, investors may be able to enhance their after-tax total return experience through prescriptive investment decisions.

Source: Economic Policy Institute, Tax Foundation, GIR, and Goldman Sachs Asset Management.

Solutions

A Wealth of Solutions

Tax-efficient vehicles such as municipal bonds, SMAs, and ETFs, that minimize taxable distributions by taking advantage of tax-free or tax-deferred returns. Tax-loss harvesting strategies that improve after-tax returns by offsetting capital gains with realized losses. Asset location approaches that strategically place investments more subject to taxable events or have high turnover inside tax-advantaged accounts. Gain acceleration plans if it makes sense for investors to realize gains ahead of a higher tax regime.

Source: Goldman Sachs Asset Management.

Top Section Notes: As of July 31, 2021. “Long-Term Average” is calculated from January 1961 to December 2020. “Forecast” refers to Goldman Sachs Global Investment Research (GIR) forecast of tax rates that are expected to be implemented. Bottom Section Notes: As of July 31, 2021. “Gain Acceleration” refers to investors choosing to realize capital gains sooner in order to reduce total tax liability. For illustrative purposes only. “ETFs” refer to Exchange Traded Funds. 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. Goldman Sachs does not provide accounting, tax or legal advice. Please see additional disclosures at the end of this page.

Rates: Interpreting Rising Rates

Outlook

Rates: Interpreting Rising Rates

Low Yields Across G7 Economies

We anticipate improving macro fundamentals will drive global rates higher, with some choppiness likely in the path forward. The economic rebound should push long-end rates higher while key dynamics such as unemployment and inflation may shift central bank reaction functions on front-end curves. Still, we expect risk assets to grind higher should rate increases remain measured and gradual, enriching the alpha opportunities across markets.

Source: Bloomberg, Goldman Sachs Global Investment Research, and Goldman Sachs Asset Management.

Solutions

Rising Rate Investment Preferences

Investment solutions emphasizing 1) sensitivity to global growth, 2) lower duration, and 3) income have traditionally outperformed in rising rate environments.

Source: Goldman Sachs Asset Management.

Top Section Notes: As of July 31, 2021. “10-Year Government Yield” refers to yield to worst of the Bloomberg Global G7 Total Return Index Value Unhedged USD. “Forecast” reflects year-end market-cap weighted 10-year yield estimates by Goldman Sachs Global Investment Research for the US, Germany, Japan, UK, Canada, and Bloomberg consensus estimates for France and Italy. Bottom Section Notes: “Small- and mid-cap” equities refer to global firms with a maximum market cap of 48.4 million as of July 31, 2021. “Active selection” refers to the selection of securities expected to outperform a broad index.

Inflation: Transitory or Sustained?

Outlook

Inflation: Transitory or Sustained?

Inflation Expectations Are Elevated

Higher inflation prints have raised concern over how long price pressures will last, despite the Federal Reserve’s assertion that this surge in inflation is transitory, driven by base effects and COVID-19 disruptions. Although we believe these temporary pressures will soon roll off, investors may see benefit in owning assets that display strong performance during periods of rapidly rising inflation expectations.

Source: Bloomberg and Goldman Sachs Asset Management.

Solutions

Reflation Strategies

Equities and real assets have historically delivered solid performance in periods of rising breakevens, with the potential to provide reliable protection when most needed.

Source: Goldman Sachs Asset Management.

Top Section Notes: As of July 31, 2021. “10-Year Breakeven” is the difference between the nominal yield on the 10-Year Treasury and the real yield on the 10-Year Treasury Inflation-Protected Security (TIPS). A “>1 Std. Dev. Increase” occurs when breakeven inflation exceeds 17.4 basis points month-over-month. "Std. Dev." is Standard Deviation. Bottom Section Notes: As of July 31, 2021. For illustrative purposes only.

Valuation: Sustainably higher valuations, realistically lower returns

Outlook

Valuation: Sustainably higher valuations, realistically lower returns

US Equity Valuations

Today’s elevated equity valuations may diminish return potential in the longer term, even if they do not portend a correction per se. We do not expect any imminent re-pricing of risk assets, absent renewed recessionary factors, and would be buyers of any short-term weakness.

Source: Robert Shiller, Bloomberg, and Goldman Sachs Asset Management.

Solutions

Investment Adjustments

Even so, we see greater opportunities in more affordable pockets of the global equity market, particularly in a security-specific approach. Additionally, diversifying assets, or those that can secure returns through dividend income rather than capital appreciation, may benefit portfolios in a lower return environment.

Source: Goldman Sachs Asset Management.

Top Section Notes: As of July 31, 2021. “CAPE” refers to the Cyclically-Adjusted Price-to-Earnings ratio. Chart shows historical percentile of the CAPE ratio and the 10-year average subsequent return. Bottom Section Notes: As of July 31, 2021. For illustrative purposes only.

Digital Assets: A Growing But Speculative Market

Outlook

Digital Assets: A Growing But Speculative Market

The Good, the Bad, and the Volatility

Since the creation of Bitcoin in 2009, over 11,000 cryptocurrencies have been established and the market has grown to more than $1.6tn. Interest has been driven by speculative sentiment, potential equity and inflation hedging capabilities, and the development of blockchain applications and digital assets. However, given extreme volatility, our analysis suggests a 1% portfolio allocation to Bitcoin would require a 165% long-term annualized return. As such, while the high idiosyncratic risk may be appealing to risk-seeking traders such as hedge funds, they do not merit a strategic allocation in our view.

Source: Bloomberg, Goldman Sachs Investment Strategy Group, and Goldman Sachs Asset Management.

Did You Know?

Stats and Facts

1) Portfolio Construction, 2) Alt-Coins, 3) Regulatory Risk, 4) ESG, 5) CBDCs, and 6) Blockchain.

Source: Goldman Sachs Investment Strategy Group, Coinmetrics, Cambridge Center for Alternative Finance (CCAF), and Goldman Sachs Asset Management.

Top Section Notes: Size of crypto market is as of July 31, 2021. Realized Return based on Bitcoin spot price from since its inception (July 2010) through July 2021. Top chart’s annualized volatility refers to standard deviation of Bitcoin price movements compared with those of several major asset classes. Bottom chart’s theoretical return required for 1% and 2% allocation to Bitcoin shows the expected long-term annualized Bitcoin return required for a 1% or 2% allocation within a moderate-risk portfolio using Goldman Sachs Investment Strategy Group’s robust optimization model. Please see additional disclosures at the end of this page. Past performance does not guarantee future results, which may vary. Bottom Section Notes: The probability of a 60% more drawdown per year is calculated based on Bitcoin price data since its inception (July 2010) through July 2021. “Alt-coins” refer to any cryptocurrency that is not Bitcoin. Bitcoin mining energy consumption data is from Cambridge Center for Alternative Finance (CCAF) as of May 2021, latest available. Percent of global central banks experimenting with CBDCs is as of June 2021, latest available.

See Glossary for definition of terms used in reference to Products

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Glossary

Equities

The Dow Jones US Select Real Estate Securities Index tracks companies that are both equity owners and operators of real estate in the US.

The MSCI All Country World (ACWI) Index is a market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. It comprises of stocks from 23 developed countries and 24 emerging markets.

The MSCI All Country World (ACWI) Growth Index captures large and mid cap securities exhibiting overall growth style characteristics across 23 developed markets countries and 27 emerging markets countries.

The MSCI All Country World Investable Market Index (ACWI IMI) is a market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world, including large, mid and small cap stocks across 23 developed markets and 27 emerging markets countries.

The MSCI All Country World (ACWI) Value Index captures large and mid cap securities exhibiting overall value style characteristics across 23 developed markets countries and 27 emerging markets countries.

The unmanaged MSCI EAFE Index (unhedged) is a market capitalization weighted composite of securities in 21 developed markets.

The MSCI Emerging Markets Equity Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

The MSCI USA Cyclical Sectors Index is based on MSCI USA Index, its parent index and captures large and mid-cap segments of the US market. The index is designed to reflect the performance of the opportunity set of global cyclical companies across various GICS® sectors.

The Russell 1000 Index is an unmanaged index of common stock prices that measures the performance of the large cap value segment of the US equity universe.

The Russell 1000 Growth Index is an unmanaged index that measures the performance of the large cap growth segment of the US equity universe.

The Russell 1000 Value Index is an unmanaged index of common stock prices that measures the performance of the large cap value segment of the US equity universe.

The Russell 2000 Index measures the performance of the small-cap segment of the US equity universe. The Russell 2000 Index is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

The Russell Mid Cap Index is an index that measures the performance of the mid-capitalization segment of the US equity market.

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 S&P Developed ex-US Property Index measures the performance of real estate companies domiciled in countries outside the United States.

The S&P Developed ex-US Small Cap Index covers the smallest 15% of companies from developed countries (excluding the US) ranked by total
market capitalization.

Fixed Income

The Bloomberg G7 Total Return Index measures investment grade debt from G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States).

The Bloomberg Global Aggregate Bond Index measures global investment grade debt from 24 local currency markets, including treasury, government-related, corporate, and securitized fixed-rated bonds from both developed and merging market issuers.

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.

The Bloomberg EM USD Aggregate Index is a flagship hard currency Emerging Markets debt benchmark that includes USD denominated debt from sovereign, quasi-sovereign, and corporate EM issuers.

The Bloomberg Global High Yield Index provides a broad-based measure of the global high-yield fixed income market.

The Bloomberg Municipal Bond Index covers the USD-denominated long-term tax-exempted bond market, including state and local general obligation bonds, revenue bonds, insured bonds, and
pre-refunded bonds.

The Bloomberg US Corporate Investment Grade Index includes publicly issued US corporate and specified foreign debentures and secured notes.

The Credit Suisse Leveraged Loan Index tracks the investable leveraged loan market by representing tradable, senior-secured, US-dollar denominated, non-investment grade loans.

The J.P. Morgan 1-Month Cash Index measures the total return of a rolling investment in a short-term fixed income instrument with a one-month maturity.

The J.P. Morgan EMBI Global Composite Index is an unmanaged index tracking dollar-denominated debt instruments issued in emerging markets.

The US Treasury Bond is a debt obligation backed by the United States government and its interest payments are exempt from state and local taxes. However, interest payments are not exempt from federal taxes.

Other

Alpha refers to returns in excess of the benchmark return.

Basis points (bps) refers to a unit represented by one hundredth of one percent.

Bitcoin is the first cryptocurrency that may be transacted on the peer-to-peer bitcoin network using blockchain technology.

The Bloomberg Commodity Index offers liquid exposure to physical commodities via futures contracts. The diversified composition of the Index aims to produce an attractive risk-return profile over time while ensuring that no single commodity or sector dictates the investment.

The Bloomberg Gold Subindex, or formerly known as Dow Jones-UBS Gold Subindex, reflects the returns on fully collateralized gold future positions.

The Bloomberg WTI Crude Oil Subindex is a single commodity subindex of the Bloomberg Commodity Index, composed of futures contracts on crude oil, and reflects the return of underlying commodity futures price movements only in USD.

Cyclical bias refers to securities whose stock price and business performance have high sensitivity to overall macroeconomic conditions.

The Cyclically Adjusted Price-to-Earnings (CAPE) ratio is a valuation measure usually applied to the broad equity market, that uses real per-share earnings over a 10-year period, smoothing out real earnings to eliminate fluctuations in net income cause by variations in profit margins over a typical business cycle.

The Dow Jones US Select Real Estate Securities Index tracks companies that are both equity owners and operators of real estate in the US.

Duration is a measure of the sensitivity of the price of a fixed income investment to a change in interest rates.

Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.

ESG stands for Environmental, Social, and Governance.

Gold spot price measures the current market price at which gold is bought or sold for immediate payment and delivery, quoted as US dollars per Troy Ounce.

Gross Domestic Product (GDP) is the value of finished goods and services produced within a country's borders over one year.

The HFRI Fund of Funds Composite Index is an equal weighted, net of fee, index composed of approximately 800 fund-of-funds which report to HFR.

Income-oriented investing refers to investments where returns are primarily realized through fixed payments such as coupons.

The loan-to-deposit ratio (LDR) measures a bank's liquidity by comparing a bank's total loan to its total deposits for the same period.

Percentage points (pp) refers to the unit for the arithmetic difference of two percentages.

The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS).

Private assets refers to equity or debt investments that are not accessible via public markets, including private equity, private credit, and private real estate.

The quits rate is the monthly percentage of employees that quit as defined by the US Bureau of Labor Statistics.

Risk assets refers to assets that carry a degree of price volatility.

The Reserve Requirement Ratio (RRR) refers to the central bank regulation that sets the minimum amount a commercial bank must hold in reserves as a specified percentage of the amount of deposit liabilities.

The S&P GSCI Commodity Index is a composite index of commodity sector returns, representing an unleveraged, long-only investment in commodity futures that is broadly diversified across the spectrum of commodities.

Standard deviation is defined as a measure of the dispersion of a set of data from its mean.

Treasury Inflation-Protected Securities (TIPS) is a US Treasury bond that is indexed to an inflationary gauge to protect investors from the decline in the purchasing power of their money.

The US headline unemployment rate (U3) is a ratio of the number of unemployed people as a percent of the total labor force, as defined by the US Bureau of Labor Statistics.

A US recession is defined by the National Bureau of Economic Research (NBER) as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

The US Personal Consumption Expenditure (PCE) refers to the measure of prices that people in the US, or those buying on their behalf, pay for goods and services.

The US Core Personal Consumption Expenditure (PCE) Price Index provides a measure of the prices paid by people for domestic purchases of goods and services, excluding the prices of food and energy. The core PCE is the Federal Reserve’s preferred inflation measure.

The US dollar index is a measure of the value of the US dollar relative to the value of a basket of currencies (the euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc).

Yield refers to the earnings generated and realized on an investment over a particular period of time.

Volatility is a measure of variation of a financial instrument's price.

WTI stands for West Texas Intermediate crude oil, a common US benchmark for oil prices.

Risk Disclosures

Investors should also consider some of the potential risks of alternative investments: Alternative Strategies. Alternative strategies often engage in leverage and other investment practices that are speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, including the entire amount that is invested. Manager experience. Manager risk includes those that exist within a manager’s organization, investment process or supporting systems and infrastructure. There is also a potential for fund-level risks that arise from the way in which a manager constructs and manages the fund. Leverage. Leverage increases a fund’s sensitivity to market movements. Funds that use leverage can be expected to be more “volatile” than other funds that do not use leverage. This means if the investments a fund buys decrease in market value, the value of the fund’s shares will decrease by even more. Counterparty risk. Alternative strategies often make significant use of over-the-counter (OTC) derivatives and therefore are subject to the risk that counterparties will not perform their obligations under such contracts. Liquidity risk. Alternative strategies may make investments that are illiquid or that may become less liquid in response to market developments. At times, a fund may be unable to sell certain of its illiquid investments without a substantial drop in price, if at all. Valuation risk. There is risk that the values used by alternative strategies to price investments may be different from those used by other investors to price the same investments. The above are not an exhaustive list of potential risks. There may be additional risks that should be considered before any investment decision.

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.

International securities entail special risks such as currency, political, economic, and market risks.

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.

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).

Concentration in infrastructure-related securities involves sector risk and concentration risk, particularly greater exposure to adverse economic, regulatory, political, legal, liquidity, and tax risks associated with MLPs and REITs.

Investments in master limited partnerships (“MLPs”) are subject to certain risks, including risks related to limited control and limited rights to vote, potential conflicts of interest, cash flow risks, dilution risks, limited liquidity and risks related to the general partner’s right to force sales at undesirable times or prices.

Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. REITs whose underlying properties are concentrated in a particular industry or geographic region are also subject to risks affecting such industries and regions. The securities of REITs involve greater risks than those associated with larger, more established companies and may be subject to more abrupt or erratic price movements because of interest rate changes, economic conditions and other factors.

Buying, selling and using cryptocurrencies carry numerous risks. Digital currency is not legal tender. No law requires companies or individuals to accept cryptocurrencies as a form of payment. Instead, cryptocurrencies use is limited to businesses and individuals that are willing to accept them. If no one accepts them, cryptocurrencies will become worthless. Cryptocurrency payments are irreversible.

Platforms that buy and sell cryptocurrencies can be hacked, and some have failed. In addition, like the platforms themselves, digital wallets can be hacked. As a result, consumers can—and have—lost money.

Cryptocurrency transactions can be subject to fraud and theft. Unlike US banks and credit unions that provide certain guarantees of safety to depositors, there are no such safeguards provided to digital wallets.

The above are not an exhaustive list of potential risks. There may be additional risks that should be considered before any investment decision.

Index Benchmarks

Indices are unmanaged. The figures for the index reflect the reinvestment of all income or dividends, as applicable, but do not reflect the deduction of any fees or expenses which would reduce returns. Investors cannot invest directly in indices.

The indices referenced herein have been selected because they are well known, easily recognized by investors, and reflect those indices that the Investment Manager believes, in part based on industry practice, provide a suitable benchmark against which to evaluate the investment or broader market described herein.

General Disclosures

Rates Bottom Section Notes: Chart shows global asset class styles or segments and market characteristics that tend to perform well under US rising interest rate environments.

Digital Assets Top Section Notes: “US Agg” refers to the Bloomberg US Aggregate Bond Index. “US Dollar” refers to the US Dollar Index. “Gold” refers to Gold spot price. “EAFE Equity” refers to the MSCI EAFE Index. “S&P 500” refers to the S&P 500 Index. “EM Equity” refers to the MSCI Emerging Markets Index. “Commodities (GSCI)” refers to the S&P GSCI Commodity Index. “Bitcoin” refers to Bitcoin spot price.

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 information discusses general market activity, industry or sector trends, or other broad-based economic, market or political conditions and should not be construed as research or investment advice. This material has been prepared by GSAM and is not financial research nor a product of Goldman Sachs Global Investment Research (GIR). 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 may differ from those of Goldman Sachs Global Investment Research or other departments or divisions of Goldman Sachs and its affiliates. Investors are urged to consult with their financial advisors before buying or selling any securities. This information may not be current and GSAM has no obligation to provide any updates or changes.

Economic and market forecasts presented herein reflect a series of assumptions and judgments as of the date of this document and are subject to change without notice. These forecasts do not take into account the specific investment objectives, restrictions, tax and financial situation or other needs of any specific client. Actual data will vary and may not be reflected here. These forecasts are subject to high levels of uncertainty that may affect actual performance. Accordingly, these forecasts should be viewed as merely representative of a broad range of possible outcomes. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change.

Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only.

The opinions expressed in this paper are those of the authors, and not necessarily of GSAM. The investments and returns discussed in this paper do not represent any Goldman Sachs product.

This paper makes no implied or express recommendations concerning how a client's account should be managed and is not intended to be used as a general guide to investing or as a source of any specific investment recommendations.

Although certain information has been obtained from sources believed to be reliable, we do not guarantee its accuracy, completeness or fairness. We have relied upon and assumed without independent verification, the accuracy and completeness of all information available from public sources.

Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this document and may be subject to change, they should not be construed as investment advice.

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 document 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.

Confidentiality

No part of this material may, without GSAM's prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient.

Goldman Sachs & Co. LLC, member FINRA.

Compliance Code: 249030-OTU-1470126. Date of first use: September 7, 2021.

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MARKET KNOW-HOW | 2021: Edition 3