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In the final quarter of 2025, the Goldman Sachs Mid Cap Growth Fund delivered an impressive performance, outstripping its primary benchmark, the Russell Midcap Growth Index (net). This period was characterized by a significant broadening of market strength, supported by a favorable economic climate, relaxed monetary policies, and solid corporate financial results across various sectors. The fund's success during this time highlights its strategic positioning and effective stock selection.

During the fourth quarter of 2025, major U.S. indices displayed notable gains. The S&P 500 Index recorded a total return of 2.66% in USD, while the Russell 2000 Index saw a 2.21% increase in total return, also in USD. This general market uplift provided a conducive backdrop for growth-oriented funds, particularly those focused on mid-capitalization companies. The positive sentiment was fueled by several factors, including ongoing economic expansion and a supportive policy environment that encouraged investor confidence.

A significant driver of the Goldman Sachs Mid Cap Growth Fund's outperformance was its strong holdings in key sectors, particularly Information Technology and Health Care. These sectors benefited from favorable secular trends and demonstrated robust earnings growth. Top-contributing companies within the fund's portfolio showcased not only strong financial results but also efficient margin expansion, further bolstering the fund's overall returns. This strategic allocation to high-growth areas proved crucial in surpassing benchmark performance.

Conversely, the fund made tactical decisions to divest from certain positions, such as AutoZone (AZO) and Varonis Systems (VRNS). The exit from AutoZone was prompted by a decline in do-it-yourself (DIY) customer traffic and increasing operational costs, which began to erode its investment appeal. Varonis Systems was exited following disappointing recurring revenue figures and a downward revision of its financial outlook, leading the fund to seek more promising investment avenues elsewhere. These decisions underscore the fund's active management approach and its willingness to adjust holdings based on evolving market conditions and company-specific performance.

Looking ahead, the Goldman Sachs Mid Cap Growth Fund remains committed to its active management philosophy. The fund's strategy is centered on identifying and investing in high-quality businesses that exhibit strong balance sheets and effective capital allocation strategies. This approach is designed to leverage idiosyncratic opportunities that arise as market leadership continues to diversify and volatility persists. By focusing on these core principles, the fund aims to maintain its competitive edge and deliver sustained growth for its investors.

The fourth quarter of 2025 marked a period of robust growth for the Goldman Sachs Mid Cap Growth Fund, which significantly outperformed its benchmark. This success was underpinned by a strong economic environment and strategic investments in sectors like Information Technology and Health Care. The fund's agile management, including timely divestments from underperforming assets, highlights its commitment to maximizing investor returns amidst changing market dynamics.