N-14

                            OppenheimerFunds, Inc.
                              498 Seventh Avenue
                           New York, New York 10018

June 19, 2003


VIA EDGAR
- ---------
Securities and Exchange Commission
SEC Filer Support
Mail Stop 0-7; Securities Operations Center
6432 General Green Way
Alexandria, VA 22312

Re:   Form  N-14  Registration  Statement/Proxy  Oppenheimer  Select  Managers
      Gartmore Millennium Growth Fund II/Oppenheimer MidCap Fund
      -------------------------------------------------

Dear Madam/Sir:

      Enclosed for filing with the  Securities  and Exchange  Commission  (the
"Commission")  under the  Securities Act of 1933, as amended (the "1933 Act"),
is a  Registration  Statement on Form N-14 (the  "Registration  Statement") of
Oppenheimer MidCap Fund (the  "Registrant"),  an open-end  investment company.
The Registration  Statement  includes the prospectus of the Registrant and the
proxy statement of Oppenheimer  Select  Managers  Gartmore  Millennium  Growth
Fund  II,  a  separate  open-end  investment  company.   The  prospectus/proxy
statement  included  in  this  filing  had  previously  been  filed  with  the
Commission  (Registration  No.  333-105376,   referred  to  as  the  "Previous
Filing") on May 19, 2003, which filing was withdrawn on June 19, 2003.

      The prospectus and proxy statement included in this filing  incorporates
the comments given by the Commission with respect to the Previous  Filing.  We
plan to file a pre-effective  amendment to this registration statement to file
the remaining items not included in this filing.

      We also will file separately,  a request to accelerate the effectiveness
of this  registration/proxy  statement  pursuant  to Rule 461 of the 1933 Act,
seeking  effectiveness  on June 30,  2003.  The  solicitation  of  Oppenheimer
Select Managers  Gartmore  Millennium  Growth Fund II shareholders is expected
to commence promptly thereafter.

      Thank you for your  attention to this matter.  Please  contact me if you
have any questions or comments.

                                          Sincerely,

                                          /s/ Peter E. Pisapia
                                          -------------------------------
                                          Assistant Vice President and
                                          Assistant Counsel
                                          T:(212) 323-0248
                                          Fax: (212) 323-4071
                                          ppisapia@oppenheimerfunds.com
                                          -----------------------------

                                                   Registration No.


As filed with the Securities and Exchange Commission on June 20, 2003


                   U.S. SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                  FORM N-14

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933           / X /

PRE-EFFECTIVE AMENDMENT NO.                                      /  /

POST-EFFECTIVE AMENDMENT NO.___                                   /   /

                           OPPENHEIMER MIDCAP FUND
              (Exact Name of Registrant as Specified in Charter)

              6803 South Tucson Way, Centennial, Colorado 80112
                   (Address of Principal Executive Offices)

                                 303-768-3200
                       (Registrant's Telephone Number)

                             Robert G. Zack, Esq.
                   Senior Vice President & General Counsel
                            OppenheimerFunds, Inc.
                 498 Seventh Avenue, New York, New York 10018
                                (212) 323-0250
                   (Name and Address of Agent for Service)

  As soon as practicable after the Registration Statement becomes effective.
                (Approximate Date of Proposed Public Offering)

Title of Securities Being Registered: Class A, Class B, Class C, Class N and
Class Y shares of Oppenheimer MidCap Fund.

No filing fee is due because of reliance on Section 24(f) of the Investment
Company Act of 1940.

- ------------------------------------------------------------------------------
The Registrant hereby amends the Registration  statement on such date or dates
as may be necessary to delay its  effective  date until the  Registrant  shall
file a further  amendment  which  specifically  states that this  Registration
Statement shall  thereafter  become  effective in accordance with section 8(a)
of the  Securities  Act of 1933 or  until  the  Registration  Statement  shall
become  effective on such date as the  Commission,  acting pursuant to Section
8(a), shall determine.

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement contains the following pages and documents:

Front Cover
Contents Page
Cross-Reference Sheet

Part A

Proxy Statement for Oppenheimer Select Managers Gartmore Millennium Growth
Fund II and Prospectus for Oppenheimer MidCap Fund

Exhibit A - Agreement and Plan of Reorganization between Oppenheimer Select
Managers Gartmore Millennium Growth Fund II and Oppenheimer MidCap Fund

Exhibit B - Principal Shareholders


Part B

Statement of Additional Information


Part C

Other Information
Signatures
Exhibits

        OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
              6803 South Tucson Way, Centennial, Colorado 80112
                                1.800.708.7780

                  NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
                        TO BE HELD ON AUGUST 29, 2003

To the Shareholders of Oppenheimer Select Managers Gartmore  Millennium Growth
Fund II:

Notice  is  hereby  given  that  a  Special  Meeting  of the  Shareholders  of
Oppenheimer  Select Managers Gartmore  Millennium Growth Fund II ("GMG Fund"),
a registered  investment management company, will be held at 6803 South Tucson
Way, Centennial,  CO 80112 at 1:00 p.m., Mountain time, on August 29, 2003, or
any adjournments thereof (the "Meeting"), for the following purposes:

1.    To approve an Agreement and Plan of Reorganization  between  Oppenheimer
Select  Managers   Gartmore   Millennium  Growth  Fund  II  ("GMG  Fund")  and
Oppenheimer  MidCap Fund ("MidCap Fund"),  and the  transactions  contemplated
thereby,  including  (a) the transfer of  substantially  all the assets of GMG
Fund to MidCap  Fund in  exchange  for Class A,  Class B, Class C, Class N and
Class Y shares of MidCap Fund, (b) the  distribution of these shares of MidCap
Fund to the  corresponding  Class A,  Class B,  Class C,  Class N and  Class Y
shareholders  of GMG  Fund in  complete  liquidation  of GMG  Fund and (c) the
cancellation  of the  outstanding  shares  of GMG Fund  (all of the  foregoing
being referred to as the "Proposal").

2.    To  act  upon  such  other  matters  as may  properly  come  before  the
Meeting.

Shareholders  of record at the close of business on June 18, 2003 are entitled
to  notice  of,  and to vote at,  the  Meeting.  The  Proposal  is more  fully
discussed  in the Proxy  Statement  and  Prospectus.  Please read it carefully
before telling us,  through your proxy or in person,  how you wish your shares
to be voted.  The Board of Trustees of GMG Fund  recommends a vote in favor of
the Proposal.  WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.

By Order of the Board of Trustees,
      Robert G. Zack, Secretary
      July 7, 2003
- --------------------------------------------------------------------------------
Shareholders  who do not  expect  to  attend  the  Meeting  are  requested  to
indicate  voting  instructions  on the  enclosed  proxy and to date,  sign and
return it in the  accompanying  postage-paid  envelope.  To avoid  unnecessary
duplicate mailings,  we ask your cooperation in promptly mailing your proxy no
matter how large or small your holdings may be.




        OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II
              6803 South Tucson Way, Centennial, Colorado 80112
                                1.800.708.7780
                   COMBINED PROSPECTUS AND PROXY STATEMENT
                              DATED JULY 7, 2003

 Acquisition of the Assets of OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM
                                GROWTH FUND II

 By and in exchange for Class A, Class B, Class C, Class N and Class Y shares
                                      of
                           OPPENHEIMER MIDCAP FUND

      This combined  Prospectus and Proxy Statement  solicits proxies from the
shareholders of Oppenheimer  Select Managers  Gartmore  Millennium Growth Fund
II  ("GMG  Fund")  to be voted  at a  Special  Meeting  of  Shareholders  (the
"Meeting")  to  approve  the  Agreement  and  Plan  of   Reorganization   (the
"Reorganization  Agreement") and the  transactions  contemplated  thereby (the
"Reorganization")  between  GMG  Fund and  Oppenheimer  MidCap  Fund  ("MidCap
Fund").  This  combined   Prospectus  and  Proxy  Statement   constitutes  the
Prospectus  of MidCap Fund and the Proxy  Statement  of GMG Fund filed on Form
N-14  with  the   Securities   and  Exchange   Commission   (the  "SEC").   If
shareholders   vote  to  approve   the   Reorganization   Agreement   and  the
Reorganization,  the  net  assets  of GMG  Fund  will  be  acquired  by and in
exchange  for shares of MidCap  Fund.  The Meeting will be held at the offices
of OppenheimerFunds,  Inc. at 6803 South Tucson Way,  Centennial,  CO 80112 at
1:00 p.m., Mountain time, on August 29, 2003 or any adjournment  thereof.  The
Board of Trustees  of GMG Fund is  soliciting  these  proxies on behalf of GMG
Fund.  This  Prospectus and Proxy Statement will first be sent to shareholders
on or about July 14, 2003.


      If the shareholders vote to approve the  Reorganization  Agreement,  you
will  receive  Class A shares of MidCap Fund equal in value to the value as of
the Valuation  Date (as defined in the  Agreement and Plan of  Reorganization:
the business day  preceding  the Closing Date of the  Reorganization)  of your
Class A shares of GMG Fund;  Class B shares of MidCap  Fund  equal in value to
the value as of the Valuation  Date of your Class B shares of GMG Fund;  Class
C shares of MidCap Fund equal in value to the value as of the  Valuation  Date
of your  Class C shares of GMG Fund;  Class N shares of MidCap  Fund  equal in
value to the  value as of the  Valuation  Date of your  Class N shares  of GMG
Fund;  and Class Y shares of MidCap Fund equal in value to the value as of the
Valuation  Date of your  Class Y shares  of GMG  Fund.  GMG Fund  will then be
liquidated and  de-registered  under the  Investment  Company Act of 1940 (the
"Investment Company Act").


      MidCap  Fund's  investment  objective is to seek  capital  appreciation.
MidCap Fund invests mainly in equity securities,  such as common and preferred
stocks,  and securities  convertible  into common stock. It invests  primarily
in equity  securities  of U.S.  companies,  but can also buy  foreign  stocks.
Under  normal  market  conditions,  the Fund  invests  at least 80% of its net
assets (plus  borrowings  for  investment  purposes) in equity  securities  of
growth companies that have a market  capitalization  of between $2 billion and
$11.5 billion (referred to as "mid-cap" stocks).

      This  Prospectus and Proxy Statement  gives  information  about Class A,
Class B,  Class C,  Class N and Class Y shares of MidCap  Fund that you should
know  before  investing.   You  should  retain  it  for  future  reference.  A
Statement of Additional  Information relating to the Reorganization  described
in this  Prospectus  and Proxy  Statement,  dated  July 7,  2003  (the  "Proxy
Statement of Additional  Information")  has been filed with the SEC as part of
the Registration Statement on Form N-14 (the "Registration  Statement") and is
incorporated  herein by reference.  You may receive a copy by written  request
to the  OppenheimerFunds  Services free of charge (the "Transfer Agent") or by
calling  the  toll-free   number   1.800.708.7780.   The  Proxy  Statement  of
Additional   Information  includes  the  following   documents:   (i)  audited
financial  statements  for the 12-month  period ended  November 30, 2002,  and
financial  statements for the six-month period ended May 31, 2003 (to be filed
upon   availability),   respectively  of  GMG  Fund;  (ii)  audited  financial
statements  for the 12-month  period ended  October 31,  2002,  and  financial
statements  for the  six-month  period ended April 30, 2003,  respectively  of
MidCap  Fund;  (iii) the  Prospectus  of GMG Fund  dated  March 28,  2003,  as
supplemented  May 7, 2003 (iv) the Statement of Additional  Information of GMG
Fund dated March 28, 2003; and (v) the Statement of Additional  Information of
MidCap Fund dated December 23, 2002, as supplemented February 11, 2003.


      The  Prospectus  of MidCap Fund dated  December  23, 2002 is attached to
and considered a part of this  Prospectus and Proxy  Statement and is intended
to provide you with information about MidCap Fund.

Mutual fund shares are not deposits or  obligations  of any bank,  and are not
insured or  guaranteed by the Federal  Deposit  Insurance  Corporation  or any
other U.S.  government  agency.  Mutual fund shares involve  investment  risks
including the possible loss of principal.

This Prospectus and Proxy Statement is dated July 7, 2003.

As with all mutual  funds,  the  Securities  and Exchange  Commission  has not
approved or disapproved  these  securities or passed upon the adequacy of this
Prospectus  and Proxy  Statement.  Any  representation  to the  contrary  is a
criminal offense.

                              TABLE OF CONTENTS
                   COMBINED PROSPECTUS AND PROXY STATEMENT

                                                                          Page
                                                                          ----
Synopsis
   What am I being asked to vote on?............................................6
   What are the general tax consequences of the Reorganization?.................7
   Comparisons of Some Important Features.......................................7
   How do the investment objectives and policies of the Funds compare?..........7
   Who manages the Funds?.......................................................8
   What are the fees and expenses of each Fund and those expected after the
      Reorganization?...........................................................8
   Where can I find more financial information about the Funds?.................12
   What  are  the   capitalizations   of  the   Funds   and  what   would  the
capitalizations be after the
   Reorganization?..............................................................13
   How have the Funds performed?................................................14
   What are other Key Features of the Funds?....................................20
         Investment Management and Fees.........................................20
         Transfer Agency and Custody Services...................................21
         Distribution Services..................................................21
         Purchases, Redemptions, Exchanges and other Shareholder Services.......21
         Dividends and Distributions............................................21
What are the Principal Risks of an Investment in GMG Fund and MidCap Fund?......22
Reasons for the Reorganization
Information about the Reorganization
   How will the Reorganization be carried out?..................................23
   Who will pay the Expenses of the Reorganization?.............................24
   What are the Tax Consequences of the Reorganization?.........................25
   What  should I know  about  Class A,  Class B, Class C, Class N and Class Y
shares of
      MidCap Fund?..............................................................25
Comparison of Investment Objectives and Policies
   Are there any  significant  differences  between the investment  objectives
and strategies of
      the Funds?................................................................26
   What are the main risks associated with an investment in the Funds?..........26
   How do the investment policies of the Funds compare?.........................26
   What are the fundamental investment restrictions of the Funds?...............32
   How  do the  Account  Features  and  Shareholder  Services  for  the  Funds
         Compare?...............................................................33
         Investment Management..................................................33
         Distribution...........................................................34
         Purchases and Redemptions..............................................35
         Shareholder Services...................................................35
         Dividends and Distributions............................................35
Voting Information
   How many votes are necessary to approve the Reorganization Agreement?........36
   How do I ensure my vote is accurately recorded?..............................36
   Can I revoke my proxy?.......................................................37
   What other matters will be voted upon at the Meeting?........................37
      Who is entitled to vote?..................................................37
   What other solicitations will be made?.......................................37
   Are there any appraisal rights?..............................................38
Information about MidCap Fund...................................................38
Information about GMG Fund......................................................38
Principal Shareholders..........................................................39
Exhibit A - Agreement and Plan of  Reorganization  by and between  Oppenheimer
Select Managers Gartmore Millennium Growth Fund II and Oppenheimer MidCap Fund
Exhibit B - Principal Shareholders
Enclosures:
Prospectus of Oppenheimer MidCap Fund dated December 23, 2002.
Semi-Annual Report of Oppenheimer MidCap Fund dated April 30, 2003 (available
without charge upon request, by calling 1.800.708.7780).


                                   SYNOPSIS

      This is only a summary  and is  qualified  in its  entirety  by the more
detailed  information  contained  in or  incorporated  by  reference  in  this
Prospectus and Proxy  Statement and by the  Reorganization  Agreement which is
attached as Exhibit A.  Shareholders  should  carefully review this Prospectus
and Proxy  Statement and the  Reorganization  Agreement in their entirety and,
in particular,  the current  Prospectus of MidCap Fund which  accompanies this
Prospectus and Proxy Statement and is incorporated herein by reference.


      If shareholders of GMG Fund approve the  Reorganization,  the net assets
of GMG Fund will be  transferred  to MidCap  Fund,  in  exchange  for an equal
value of shares  of  MidCap  Fund.  The  shares  of  MidCap  Fund will then be
distributed to GMG Fund  shareholders  and GMG Fund will be  liquidated.  As a
result of the  Reorganization,  you will cease to be a shareholder of GMG Fund
and  will  become a  shareholder  of  MidCap  Fund.  For  federal  income  tax
purposes,  the holding  period of your GMG Fund shares will be carried over to
the   holding   period  for  shares  you  receive  in   connection   with  the
Reorganization.  This exchange will occur on the Closing Date (as such term is
defined  in the  Agreement  and  Plan of  Reorganization  attached  hereto  as
Exhibit A) of the Reorganization."


What am I being asked to vote on?

      Your Fund's investment manager, OppenheimerFunds,  Inc. (the "Manager"),
proposed to the Board of  Trustees a  reorganization  of your Fund,  GMG Fund,
with and into  Oppenheimer  MidCap Fund so that  shareholders  of GMG Fund may
become  shareholders  of a  substantially  larger  fund  advised  by the  same
investment advisor with generally more favorable  long-term  performance,  and
investment  objectives  and policies  similar to those of their  current Fund.
The Board  considered the differences in investment  focus,  discussed  below.
The Board also  considered  the fact that the surviving fund has the potential
for lower overall operating expenses.  In addition,  the Board considered that
both Funds have Class A, Class B, Class C, Class N and Class Y shares  offered
under  identical  sales charge  arrangements.  The Board also  considered that
the  Reorganization  is  expected to be a tax-free  reorganization,  and there
would  be  no  sales  charge  imposed  in  effecting  the  Reorganization.  In
addition,  due to the  relatively  moderate costs of the  reorganization,  the
Boards of both Funds concluded that neither Fund would experience  dilution as
a result of the Reorganization.

      A  reorganization  of GMG Fund with and into MidCap Fund is  recommended
by the  Manager  based on the fact that both  funds  have  similar  investment
practices and industry sector weighting.

      At a meeting held on April 28,  2003,  the Board of Trustees of GMG Fund
approved a reorganization  transaction that will, if approved by shareholders,
result  in the  transfer  of the net  assets of GMG Fund to  MidCap  Fund,  in
exchange  for an equal  value of shares of MidCap  Fund.  The shares of MidCap
Fund  will  then be  distributed  to GMG Fund  shareholders  and GMG Fund will
subsequently  be  liquidated.  As a  result  of the  Reorganization,  you will
cease to be a shareholder  of GMG Fund and will become a shareholder of MidCap
Fund.  This  exchange  will occur on the Closing Date (as such term is defined
in the Agreement and Plan of  Reorganization  attached hereto as Exhibit A) of
the Reorganization.

      Approval of the Reorganization  means you will receive Class A shares of
MidCap  Fund  equal  in value to the  value as of the  Valuation  Date of your
Class A shares of GMG Fund;  Class B shares of MidCap  Fund  equal in value to
the value as of the Valuation  Date of your Class B shares of GMG Fund;  Class
C shares of MidCap Fund equal in value to the value as of the  Valuation  Date
of your  Class C shares of GMG Fund;  Class N shares of MidCap  Fund  equal in
value to the  value as of the  Valuation  Date of your  Class N shares  of GMG
Fund;  and Class Y shares of MidCap  Fund  equal in value as of the  Valuation
Date of your  Class Y shares of GMG  Fund.  The  shares  you  receive  will be
issued  at net  asset  value  without  a  sales  charge  or the  payment  of a
contingent  deferred sales charge ("CDSC") although if your shares of GMG Fund
are subject to a CDSC,  your MidCap Fund shares will continue to be subject to
the same CDSC applicable to your shares,  and the period during which you held
your GMG shares will  carryover  to your  MidCap  Fund shares for  purposes of
determining the CDSC holding period.

      For the  reasons  set  forth  in the  "Reasons  for the  Reorganization"
section,  the Board of GMG Fund has determined that the  Reorganization  is in
the best interests of the shareholders of GMG Fund.

                THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
             TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION

What are the general tax consequences of the Reorganization?

      It is expected that  shareholders of GMG Fund who are U.S. citizens will
not  recognize any gain or loss for federal  income tax purposes,  as a result
of the  exchange  of their  shares  for  shares of MidCap  Fund.  You  should,
however,  consult  your tax  advisor  regarding  the  effect,  if any,  of the
Reorganization  in light of your  individual  circumstances.  You should  also
consult your tax advisor about state and local tax  consequences.  For further
information about the tax consequences of the  Reorganization,  please see the
"Information  About the  Reorganization--What  are the Tax  Consequences of the
Reorganization?"

                    Comparisons of Some Important Features

How do the investment objectives and policies of the Funds compare?

      GMG Fund and MidCap Fund have similar  investment  objectives.  GMG Fund
seeks   long-term   capital   appreciation   and  MidCap  Fund  seeks  capital
appreciation.

      In  seeking  their  investment  objectives,  GMG  Fund and  MidCap  Fund
utilize  a  similar  investing   strategy.   GMG  Fund  invests  primarily  in
securities of growth  companies that are creating  fundamental  changes in the
economy and MidCap Fund looks for,  among other  characteristics,  established
growth  companies  that are  well-positioned  to take  advantage of product or
technology advances in their industry or related growth sector.

      Please refer to the Annual Reports of both Funds for a complete  listing
of the investments for each Fund.

Who Manages the Funds?

      The  day-to-day  management  of the business and affairs of each Fund is
the   responsibility  of  the  Manager,   however,   GMG  Fund  also  utilizes
sub-advisers to manage the investment and  reinvestment of the assets.  MidCap
Fund  is an  open-end,  diversified  management  investment  company  with  an
unlimited number of authorized shares of beneficial  interest,  organized as a
Massachusetts  business  trust on June 18, 1997.  It commenced  operations  on
December  1, 1997.  GMG Fund is an  open-end,  management  investment  company
with  an  unlimited  number  of  authorized  shares  of  beneficial  interest,
organized  as  a  Massachusetts  business  trust  on  November  10,  2000.  It
commenced operations on February 16, 2001.  Both Funds are governed
by a Board of Trustees,  which is responsible  for protecting the interests of
shareholders  under  Massachusetts  law.  Both Funds are located at 6803 South
Tucson Way, Centennial, Colorado 80112.

      The Manager,  located at 498 Seventh  Avenue,  New York, New York 10018,
acts as investment  advisor to both Funds.  GMG Fund's assets are managed by a
subadviser.

      The portfolio  manager for MidCap Fund is Bruce  Bartlett.  He is a Vice
President  of the  Fund  and a  Senior  Vice  President  of the  Manager.  Mr.
Bartlett has been the Fund's portfolio manager since April 1, 1998.

      The  portfolio  managers  for GMG Fund are  Aaron  Harris  and  Nicholas
Ford.  Both Mr.  Harris and Mr.  Ford are  employed  by  Gartmore  Mutual Fund
Capital  Trust,  the  Fund's  Sub-Adviser.  Mr.  Harris  has been  the  Fund's
portfolio  manager  since  February  16,  2001 and Mr.  Ford since  October 1,
2001.  Prior to joining  the Fund's  Sub-Adviser,  Mr.  Harris was a portfolio
manager,  managing  portions  of several  portfolios  for  Nicholas  Applegate
Capital  Management.  Mr.  Harris  manages funds similar to GMG Fund and other
global  technology  funds.  Mr.  Ford joined the Fund's  Sub-Adviser  in 1998,
serving as an  investment  manager on the U.S.  equity team.  Prior to joining
the Fund's  Sub-Adviser,  Mr. Ford served as the director of U.S.  equities at
Clerical Medical  Investment Group in London.  From 1995 to 1996, Mr. Ford was
a U.S. equities fund manager for Sun Alliance Investment Management.

      Additional  information  about the Funds  and the  Manager  is set forth
below in "Comparison of Investment Objectives and Policies."

What are the Fees and  Expenses  of each  Fund and  those  expected  after the
Reorganization?

      GMG Fund and MidCap  Fund each pay a variety of  expenses  directly  for
management of their assets,  administration,  distribution of their shares and
other  services.  Those  expenses are  subtracted  from each Fund's  assets to
calculate  the  Fund's  net asset  value  per  share.  Shareholders  pay these
expenses   indirectly.   Shareholders   for  both  Funds  pay  other  expenses
directly, such as sales charges.

      The  following  tables are provided to help you  understand  and compare
the fees and  expenses  of  investing  in shares of GMG Fund with the fees and
expenses of  investing  in shares of MidCap  Fund.  The pro forma  expenses of
the  surviving  MidCap Fund show what the fees and expenses are expected to be
after  giving  effect  to  the   Reorganization.   All  amounts  shown  are  a
percentage of net assets of each class of shares of the Funds.

                             PRO FORMA FEE TABLE
                    For the 12 month period ended 3/31/03

- ------------------------------------------------------------------------------------
                                                                Pro Forma
                       GMG Fund            MidCap Fund          Surviving MidCap
                       Class A shares      Class A Shares       Fund
                                                                Class A shares
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) on purchases           5.75%               5.75%                5.75%
(as a
 %  of offering price)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)          None 1               None 1               None1
(as a % of the lower
of the original
offering price or
redemption proceeds)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Annual Fund Operating Expenses (deducted from Fund assets) (as a percentage of
average daily net assets)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Management Fees               1.20%               0.70%                0.70%
- ------------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees          0.02%               0.22%                0.22%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Other Expenses5               0.58%               0.69%                0.69%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Total Fund Operating
Expenses                      1.80%               1.61%                1.61%
- ------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------
                                                                Pro Forma
                       GMG Fund            MidCap Fund          Surviving MidCap
                       Class B shares      Class B Shares       Fund
                                                                Class B shares
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) on purchases           None                 None                None
(as a  %  of offering
price)
- ------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)            5%2                 5%2                  5%2
(as a % of the lower
of the original
offering price or
redemption proceeds)
- ------------------------------------------------------------------------------------
Annual Fund Operating Expenses  (deducted from Fund assets) (as a percentage of
average daily net assets)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Management Fees               1.20%               0.70%                0.70%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees          1.00%               1.00%                1.00%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Other Expenses5               1.44%               0.78%                0.78%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Total Fund Operating
Expenses                      3.64%               2.48%                2.48%
- ------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------
                                                               Pro Forma Surviving
                       GMG Fund            MidCap Fund         MidCap Fund
                       Class C Shares       Class C Shares     Class C Shares
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) on purchases           None                None                 None
(as a  %  of offering
price)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)            1%3                 1%3                 1%3
(as a % of the lower
of the original
offering price or
redemption proceeds)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Annual Fund Operating Expenses  (deducted from Fund assets) (as a percentage of
average daily net assets)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Management Fees               1.20%               0.70%               0.70%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees          1.00%               1.00%               1.00%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Other Expenses5               0.97%               0.76%               0.76%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Total Fund Operating
Expenses                      3.17%               2.46%               2.46%
- ------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------
                                                                Pro Forma
                       GMG Fund            MidCap Fund          Surviving MidCap
                       Class N shares      Class N Shares       Fund
                                                                Class N shares
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) on purchases           None                 None                None
(as a  %  of offering
price)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)            1%4                 1%4                  1%4
(as a % of the lower
of the original
offering price or
redemption proceeds)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Annual Fund Operating Expenses  (deducted from Fund assets) (as a percentage of
average daily net assets)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Management Fees               1.20%               0.70%                0.70%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees          0.50%               0.50%                0.50%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Other Expenses5               1.26%               0.49%                0.49%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Total Fund Operating
Expenses                      2.96%               1.69%                1.69%
- ------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------
                                                                Pro Forma
                       GMG Fund            MidCap Fund          Surviving MidCap
                       Class Y  Shares     Class Y Shares       Fund
                                                                Class Y Shares
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Shareholder Transaction Expenses (charges paid directly from a shareholder's
investment)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Sales Charge
(Load) on purchases           None                None                 None
(as a  %  of offering
price)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Maximum Deferred
Sales Charge (Load)           None                None                 None
(as a % of the lower
of the original
offering price or
redemption proceeds)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Annual Fund Operating Expenses  (deducted from Fund assets) (as a percentage of
average daily net assets)
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Management Fees               1.20%               0.70%               0.70%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Distribution and/or
Service (12b-1) Fees           N/A                 N/A                 N/A
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Other Expenses5               3.13%               0.19%               0.19%
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Total Fund Operating
Expenses                      4.33%               0.89%               0.89%
- ------------------------------------------------------------------------------------
Note:  Expenses may vary in future years.
1. A contingent  deferred sales charge may apply to redemptions of investments
   of $1 million or more ($500,000
   for retirement  plan  accounts) of Class A shares.  See "How to Buy Shares"
   in each Fund's Prospectus.
2. Applies  to  redemptions   within  the  first  year  after  purchase.   The
   contingent  deferred  sales charge  declines to 1% in the sixth year and is
   eliminated after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Applies to shares redeemed  within 18 months of retirement  plan's first
   purchase of Class N shares.

3.    "Other Expenses" include transfer agent fees and custodial, accounting
   and legal expenses, and are based on, among other things, the fees the
   Funds would have paid if the transfer agent had not waived a portion of
   its fee under a voluntary undertaking to the Fund to limit these fees to
   0.25% of average daily net assets per fiscal year for Class Y shares and
   0.35% of average daily net assets per fiscal year for all other 5.
   classes.  With that  expense  assumption  and the  transfer  agent  waiver,
   "Total  Annual  Operating  Expenses"  for GMG Fund were  1.78% for Class A,
   2.50%  for  Class B,  2.50%  for  Class C,  2.00% for Class N and 1.19% for
   Class Y. After the waiver,  the actual  "Other  Expenses" and "Total Annual
   Operating  Expenses"  for MidCap Fund as  percentages  of average daily net
   assets  were  0.48% and 1.40% for Class A,  0.49% and 2.19% for Class C and
   0.47% and 1.67% for  Class N.  Class Y was the same as shown  above.  After
   the  waiver,  the  actual  "Other  Expenses"  and "Total  Annual  Operating
   Expenses"  for the  combined  funds as  percentages  of  average  daily net
   assets  were  0.48% and  1.40%  for  Class A,  0.49% and 2.19% for Class B,
   0.49% and  2.19%  for Class C and 0.47% and 1.67% for Class N.  Class Y was
   the same as shown above.


Examples

      The  examples  below  are  intended  to help  you  compare  the  cost of
investing  in  each  Fund  and  the  proposed  surviving  MidCap  Fund.  These
examples  assume that you invest  $10,000 for the time periods  indicated,  an
annual return for each class of 5%, the  operating  expenses  described  above
and reinvestment of your dividends and distributions.

      Your  actual  costs may be higher or lower  because  expenses  will vary
over  time.  For  each  $10,000  investment,   you  would  pay  the  following
projected  expenses if you sold your shares after the number of years shown or
held your shares for the number of years shown  without  redeeming,  according
to the following examples.

                           12 Months Ended 3/31/03
                           -----------------------

                                   GMG Fund
- --------------------------------------------------------------------------------
If     shares      are    1 year        3 years       5 years      10 years1
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A                    $747         $1,109        $1,494         $2,569
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B                    $866         $1,414        $2,083        $3,1071
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C                    $420          $977         $1,659         $3,476
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class N                    $399          $915         $1,557         $3,280
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y                    $434         $1,312        $2,202         $4,478
- --------------------------------------------------------------------------------

                                   GMG Fund
- --------------------------------------------------------------------------------
If   shares   are  not    1 year        3 years       5 years      10 years1
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A                    $747         $1,109        $1,494         $2,569
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B                    $366         $1,114        $1,883        $3,1071
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C                    $320          $977         $1,659         $3,476
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class N                    $299          $915         $1,557         $3,280
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y                    $434         $1,312        $2,202         $4,478
- --------------------------------------------------------------------------------

                                 MidCap Fund
- --------------------------------------------------------------------------------
If     shares      are    1 year        3 years       5 years      10 years1
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A                    $729         $1,054        $1,401         $2,376
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B                    $751         $1,073        $1,521        $2,4051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C                    $349          $767         $1,311         $2,796
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class N                    $272          $533          $918          $1,998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y                     $91          $284          $493          $1,096
- --------------------------------------------------------------------------------

                                 MidCap Fund
- --------------------------------------------------------------------------------
If   shares   are  not    1 year        3 years       5 years      10 years1
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A                    $729         $1,054        $1,401         $2,376
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B                    $251          $773         $1,321        $2,4051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C                    $249          $767         $1,311         $2,796
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class N                    $172          $533          $918          $1,998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y                     $91          $284          $493          $1,096
- --------------------------------------------------------------------------------

                       Pro Forma Surviving MidCap Fund
- --------------------------------------------------------------------------------
If shares are redeemed:    1 year       3 years       5 years      10 years1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A                     $729        $1,054        $1,401         $2,376
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B                     $751        $1,073        $1,521        $2,4051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C                     $349         $767         $1,311         $2,796
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class N                     $272         $533          $918          $1,998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y                     $91          $284          $493          $1,096
- --------------------------------------------------------------------------------

                       Pro Forma Surviving MidCap Fund
- --------------------------------------------------------------------------------
If   shares   are   not    1 year       3 years       5 years      10 years1
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class A                     $729        $1,054        $1,401         $2,376
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class B                     $251         $773         $1,321        $2,4051
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class C                     $249         $767         $1,311         $2,796
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class N                     $172         $533          $918          $1,998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y                     $91          $284          $493          $1,096
- --------------------------------------------------------------------------------

In the "If shares are redeemed"  example,  expenses  include the initial sales
charge for Class A and the  applicable  Class B, Class C or Class N contingent
deferred  sales  charge.  In the "If shares  are not  redeemed"  example,  the
Class A expenses  include the initial sales  charge,  but Class B, Class C and
Class N expenses do not include the contingent  deferred sales charges.  There
is no sales charge on Class Y shares.
1 Class B  expenses  for  years 7 through  10 are  based on Class A  expenses,
since Class B shares automatically convert to Class A after 6 years.

Where can I find more financial information about the Funds?

      Performance  information  for both MidCap Fund and GMG Fund is set forth
in each Fund's  Prospectus  under the section  "The Fund's Past  Performance."
MidCap Fund's  Prospectus  accompanies this Prospectus and Proxy Statement and
is incorporated by reference.

      The financial statements of MidCap Fund and additional  information with
respect to its  performance  during its fiscal year ended  October  31,  2002,
including a discussion  of factors that  materially  affected its  performance
and  relevant  market  conditions  during  that fiscal  year,  is set forth in
MidCap Fund's Annual Report dated as of October 31, 2002,  that is included in
the Proxy  Statement of  Additional  Information  and  incorporated  herein by
reference.  These documents are available upon request.  See section  entitled
"Information About MidCap Fund."

      The financial  statements of GMG Fund and  additional  information  with
respect to the Fund's  performance  during its fiscal year ended  November 30,
2002,   including  a  discussion  of  factors  that  materially  affected  its
performance  and relevant  market  conditions  during that fiscal year, is set
forth in GMG Fund's  Annual  Report  dated as of November  30,  2002,  that is
included in the Proxy  Statement of Additional  Information  and  incorporated
herein  by  reference.   These  documents  are  available  upon  request.  See
section entitled "Information About GMG Fund."

What are the  capitalizations  of the Funds and what would the  capitalization
be after the Reorganization?

      The following  table sets forth the  capitalizations  (unaudited) of GMG
Fund and MidCap Fund and indicates the pro forma  combined  capitalization  as
of March 31, 2003 as if the Reorganization had occurred on that date.

      As of April 30, 2003,  the value of the assets of GMG Fund was less than
10% of the value of the assets of MidCap Fund.

                                                                  Net Asset
                                                Shares                  Value
                              Net Assets        Outstanding       Per Share
GMG Fund
            Class A                       $2,860,439        542,160
$5.28
      Class B                 $183,682          35,371                  $5.19
      Class C                 $140,008          26,972                  $5.19
      Class N                 $75,320           14,374                  $5.24
      Class Y                 $532              100               $5.32
      TOTAL             $3,259,981        618,977

MidCap Fund
      Class A                 $323,181,442            29,591,155        $10.92
      Class B                 $262,414,202            24,979,865        $10.51
      Class C                 $77,577,506       7,387,508         $10.50
      Class N                 $10,100,112       929,643           $10.86
      Class Y                 $11,125,353       992,433           $11.21
      TOTAL             $684,398,615            63,880,604

MidCap Fund
(Pro Forma Surviving Fund)
      Class A                 $326,041,881            29,853,063        $10.92
      Class B                 $262,597,884            24,997,350        $10.51
      Class C                 $77,717,514       7,400,841         $10.50
      Class N                 $10,175,432       936,576           $10.86
      Class Y                 $11,125,885       992,480           $11.21
      TOTAL             $687,658,596            64,180,312

*Reflects  the  issuance  of 261,908  Class A shares,  17,485  Class B shares,
13,333  Class C shares,  6,933  Class N shares and 47 Class Y shares of MidCap
Fund in a  tax-free  exchange  for the net  assets  of GMG  Fund,  aggregating
$3,259,981.

How have the Funds performed?


      The following past  performance  information  for each Fund is set forth
below, and for earlier periods, in its respective Prospectus:  (i) a bar chart
detailing  annual total  returns of Class A shares of each Fund as of December
31st for each of the five  most  recent  full  calendar  years  (for GMG Fund,
since that  Fund's  inception);  and (ii)  tables  detailing  how the  average
annual total  returns of MidCap  Fund's Class A, Class B, Class C, Class N and
Class Y shares  compare to those of the S&P  MidCap  400(R)Index;  and how GMG
Fund's  Class A, Class B, Class C,  Class N and Class Y average  annual  total
returns  compare to those of the Russell  MidCap Growth  Index.  The after-tax
returns  are  shown  for  Class A shares  only and are  calculated  using  the
historical  highest  individual  federal  marginal  income tax rates in effect
during the periods  shown.  The  after-tax  returns  for the other  classes of
shares will vary.  In certain  cases,  the figure  representing  "Return After
Taxes on  Distributions  and Sale of Fund Shares" may be higher than the other
return figures for the same period.  A higher  after-tax return results when a
capital  loss  occurs  upon  redemption  and  translates  into an assumed  tax
deduction   that  benefits  the   shareholder.   The  after-tax   returns  are
calculated  based on  certain  assumptions  mandated  by  regulation  and your
actual  after-tax  returns  may differ  from those  shown,  depending  on your
individual  tax  situation.  The  after-tax  returns  set forth  below are not
relevant  to  investors  who  hold  their  fund  shares  through  tax-deferred
arrangements  such as 401(k) plans or IRAs or to  institutional  investors not
subject to tax. The Fund's past investment  performance  both before and after
taxes,  is not  necessarily  an indication of how the Fund will perform in the
future.  Past  performance  is no  guarantee of how a fund will perform in the
future.

      Calendar  year  average  annual  total  returns  for the  Funds  for the
periods ended December 31, 2002, are as follows:

[See appendix to prospectus and proxy  statement for data in bar chart showing
annual total  returns for  Oppenheimer  Select  Managers  Gartmore  Millennium
Growth Fund II.]


Sales  charges  and taxes are not  included in the  calculations  of return in
this bar chart, and if those charges and taxes were included,  the returns may
be less than those shown.
For the period from 1/1/03  through  3/31/03,  the  cumulative  return for GMG
Fund (not annualized)  before taxes for Class A shares was -2.04%.  During the
period  shown  in the  bar  chart,  the  highest  return  for  GMG  Fund  (not
annualized)  before taxes for a calendar quarter was 1.51% (4thQtr'02) and the
lowest  return  (not  annualized)  before  taxes for a  calendar  quarter  was
- -16.71% (2ndQtr'02).

[See appendix to prospectus and proxy  statement for data in bar chart showing
annual total returns for Oppenheimer MidCap Fund.]

Sales  charges  and taxes are not  included in the  calculations  of return in
this bar chart, and if those charges and taxes were included,  the returns may
be less than those shown.
For the period from 1/1/03 through 3/31/03,  the cumulative  return for MidCap
Fund (not annualized)  before taxes for Class A shares was -1.89%.  During the
period shown in the bar chart, the highest return for Oppenheimer  MidCap Fund
(not annualized)  before taxes for a calendar  quarter was 43.43%  (4thQtr'99)
and the lowest  return (not  annualized)  before taxes for a calendar  quarter
was -32.06% (4thQtr'00).


Average  annual total returns for the Funds for the periods ended December 31,
2002 are as follows:


- ----------------------------------------------------------------------

GMG Fund                             1 Year   5 Years
                                             (or life
                                             of
                                             class,
                                             if less)

- ----------------------------------------------------------------------
- ----------------------------------------------------------------------

Class A Shares (inception 2/16/01)
 Return Before Taxes
Return After Taxes on Distributions -33.51%   -30.32%
Return      After      Taxes     on -33.51%   -30.32%
Distributions   and  Sale  of  Fund
Shares                              -20.41%   -23.42%

- ----------------------------------------------------------------------
- ------------------------------------------------------------

Russell MidCap Growth Index (from   -27.41%     -20.08%
2/28/01)

- ------------------------------------------------------------
- ------------------------------------------------------------

Class B Shares (inception 2/16/01)  -33.63%     -30.19%

- ------------------------------------------------------------
- ------------------------------------------------------------

Class C Shares (inception 2/16/01)  -30.74%     -28.65%

- ------------------------------------------------------------
- ------------------------------------------------------------

Class N Shares (inception 3/1/01)   -30.36%     -24.90%

- ------------------------------------------------------------
- ------------------------------------------------------------

Class Y Shares (inception 2/16/01)  -29.37%     -27.94%

- ------------------------------------------------------------
- --------------------------------------------------------------------------------------

MidCap Fund                          1 Year     5 Years             10 Years
                                                              (or life of class, if
                                                                      less)

- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------

Class A Shares (inception 12/1/97)
 Return Before Taxes
Return After Taxes on Distributions -31.79%      0.26%                0.97%
Return      After      Taxes     on -31.79%      0.25%                0.96%
Distributions   and  Sale  of  Fund
Shares                              -19.36%      0.20%                0.77%

- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------

S&P MidCap 400(R)Index (from         -14.51%      6.41%
11/30/97)                                                             7.10%

- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------

Class B Shares (inception 12/1/97)  -31.84%      0.30%
                                                                      1.22%

- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------

                                    -28.92%      0.69%
Class C Shares (inception 12/1/97)                                    1.40%

- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------

                                    -28.59%     -26.61%
Class N Shares (inception 3/1/01)                                      N/A

- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------

Class Y Shares (inception 12/1/97)  -27.10%      1.99%
                                                                      2.69%

- --------------------------------------------------------------------------------------


Average  annual  total  returns for the Funds for the periods  ended March 31,
2003 are as follows:


- ------------------------------------------------------

GMG Fund                        1 Year     5 Years
                                         (or life of
                                          class, if
                                        less)1

- ------------------------------------------------------
- ------------------------------------------------------

Class   A   Shares   (inception
2/16/01)
 Return Before Taxes
Return After Taxes on
  Distributions                 -34.00%    -27.99%
Return     After    Taxes    on -34.00%    -27.99%
Distributions  and Sale of Fund
Shares                          -20.88%    -21.48%

- ------------------------------------------------------
- --------------------------------------------------------------

Russell MidCap Growth Index
(from 2/28/01)                  -26.11% -17.91%

- --------------------------------------------------------------
- --------------------------------------------------------------

Class   B   Shares   (inception
2/16/01)                        -34.08% -27.60%

- --------------------------------------------------------------
- --------------------------------------------------------------

Class   C   Shares   (inception
2/16/01)                        -31.22% -26.56%

- --------------------------------------------------------------
- --------------------------------------------------------------

Class   N   Shares   (inception
3/1/01)                         -30.92% -23.11%

- --------------------------------------------------------------
- --------------------------------------------------------------

Class   Y   Shares   (inception
2/16/01)                        -29.63% -25.70%

- --------------------------------------------------------------



1 The Average  annual total returns for GMG Fund for a 2 Year period ended March
31, 2003 were as follows: Class A Shares (inception 2/16/01) Return Before Taxes
was -21.67%,  Class A Shares  Return After Taxes on  Distributions  was -21.31%,
Class A Shares  Return After Taxes on  Distribution  and Sale of Fund Shares was
- -16.61%,  Russell MidCap Growth Index (from 2/28/01) was -12.04%, Class B Shares
(inception 2/16/01) was -21.57%, Class C Shares (inception 2/16/01) was -19.95%,
Class N Shares  (inception  3/1/01) was -19.62%,  and Class Y Shares  (inception
2/16/01) was -19.06%.


2 The Average  annual  total  returns for MidCap Fund for a 2 Year period  ended
March 31, 2003 were as follows: Class A Shares (inception 12/1/97) Return Before
Taxes was  -21.31%,  Class A Shares  Return  After  Taxes on  Distributions  was
- -21.67%,  Class A Shares  Return After Taxes on  Distributions  and Sale of Fund
Shares was -16.88%,  S&P MidCap 400(R)Index (from  11/30/97) was -4.60%,  Class B
Shares (inception  12/1/97) was -21.15%,  Class C Shares (inception 12/1/97) was
- -19.57%,  Class N Shares  (inception  3/1/01)  was  -19.17%,  and Class Y Shares
(inception 12/1/97) was -18.56%.

- ----------------------------------------------------------------------------

MidCap Fund                     1 Year  5 Years    10 Years
                                        2        (or life of
                                                  class, if
                                                    less)

- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------

Class   A   Shares   (inception
12/1/97)
 Return Before Taxes                     -3.77%
Return After Taxes on                    -3.78%
  Distributions                 -30.41%             0.56%
Return     After    Taxes    on -30.41%  -2.98%     0.56%
Distributions  and Sale of Fund
Shares                          -18.67%             0.45%

- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------

S&P MidCap 400(R)Index (from
11/30/97)                       -23.45%  3.27%      5.85%

- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------

Class   B   Shares   (inception
12/1/97)                        -30.37%  -3.71%     0.78%

- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------

Class   C   Shares   (inception
12/1/97)                        -27.46%  -3.36%     0.94%

- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------

Class   N   Shares   (inception
3/1/01)                         -27.16% -24.57%      N/A

- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------

Class   Y   Shares   (inception
12/1/97)                        -25.76%  -2.15%     2.19%

- ----------------------------------------------------------------------------
GMG Fund's average annual total returns include applicable sales charges:  for
Class A, the current maximum  initial sales charge of 5.75%;  for Class B, the
contingent  deferred  sales charge of 5% (1-year) and 4% (life of class);  and
for Class C and  Class N, the 1%  contingent  deferred  sales  charge  for the
1-year period.  There is no sales charge for Class Y. The returns  measure the
performance  of a  hypothetical  account  and assume  that all  dividends  and
capital gains  distributions  have been reinvested in additional  shares.  The
performance  of the Fund's  Class A shares is compared  to the Russell  MidCap
Growth  Index,  an unmanaged  index which  measures the  performance  of those
Russell  Midcap  companies  with  higher   price-to-book   ratios  and  higher
forecasted  growth values.  The index  performance  includes  reinvestment  of
income but does not reflect  transaction  costs,  expenses or taxes.  The Fund
will have investments that vary from those in the index.

MidCap Fund's average annual total returns include  applicable  sales charges:
for Class A, the current maximum  initial sales charge of 5.75%;  for Class B,
the  contingent  deferred  sales charge of 5% (1-year) and 3% (life of class);
and for Class C and Class N, the 1% contingent  deferred  sales charge for the
1-year  period.  There is no sales  charge  for  Class Y shares.  The  returns
measure  the  performance  of a  hypothetical  account  and  assume  that  all
dividends and capital gains  distributions  have been reinvested in additional
shares.  The  performance  of the Fund's Class A shares is compared to the S&P
Midcap 400(R)Index, an unmanaged index of midcap equity  securities.  The index
performance  includes  reinvestment of income but does not reflect transaction
costs,  expenses,  or taxes.  The  Fund's  investments  vary from those in the
index.

      How  has  MidCap   Fund   Performed?   -  Below  is  a   discussion   by
OppenheimerFunds,  Inc., of MidCap Fund's  performance  during its fiscal year
ended  October 31, 2002,  followed by a graphical  comparison of MidCap Fund's
performance to an appropriate broad-based market index.

      Management's  Discussion  of  Performance  - During the one-year  period
that ended  October 31, 2002,  Oppenheimer  MidCap Fund  suffered  losses amid
widespread  declines in stock prices.  We continue to focus on our disciplined
investment  strategy that concentrates on the quality and  sustainability of a
company's  growth,  rather than on the sheer  magnitude of its growth.  MidCap
Fund's  best-performing  stocks  were  concentrated  in the health  care area,
particularly  among  health  care  services  and medical  products  companies.
Another   attractive  area  of  investment   proved  to  be   market-sensitive
financials.  MidCap Fund's relative  performance was hurt by declines in cable
industry  holdings,  and  individual  stocks  in a variety  of other  sectors.
MidCap Fund's portfolio and our management strategies are subject to change.

      Comparing  MidCap  Fund's  Performance  to the Market - The graphs  that
follow show the  performance  of a  hypothetical  $10,000  investment  in each
Class of shares of MidCap Fund held until  October 31,  2002.  Performance  is
measured  from the  inception  of Class A, B, C, and Y shares on  December  1,
1997. In the case of Class N shares,  performance  is measured from  inception
of the  class  on  March 1,  2001.  MidCap  Fund's  performance  reflects  the
deduction  of the  maximum  initial  sales  charge  on  Class  A  shares,  the
applicable  contingent  deferred  sales charge on Class B, Class C and Class N
shares, and reinvestments of all dividends and capital gains distributions.

      MidCap  Fund's  performance  is  compared to that of the S&P Mid-Cap 400
Index.  The S&P  Mid-Cap  400 is an  unmanaged  index of 400  domestic  stocks
chosen for market size liquidity, and industry group representation.

      Index  performance  reflects the  reinvestment of dividends but does not
consider the effect of capital  gains or  transaction  costs,  and none of the
data in the  graphs  shows  the  effect of taxes.  MidCap  Fund's  performance
reflects the effects of Fund  business  and  operating  expenses.  While index
comparisons   may  be  useful  to  provide  a  benchmark   for  MidCap  Fund's
performance,  it must be noted that MidCap Fund's  investments are not limited
to the securities in the index.


Class A Shares

Comparison of Change in Value of $10,000 Hypothetical Investments in:
MidCap Fund (Class A) and S&P MidCap 400 Index.

[Line Graph]

- ---------------------------------------------------------------------------------
          Date          Value of Investment in Fund     S&P Midcap 400 Index
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/01/1997                  $9,425                     $10,000
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1997                  $9,774                     $10,388
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1998                 $11,772                     $11,532
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1998                 $12,450                     $11,285
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1998                  $9,906                      $9,652
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1998                 $12,683                     $12,374
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1999                 $14,230                     $11,584
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1999                 $16,155                     $13,224
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1999                 $17,231                     $12,113
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1999                 $24,714                     $14,195
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2000                 $31,065                     $15,996
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2000                 $30,301                     $15,469
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2000                 $32,433                     $17,348
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2000                 $22,034                     $16,680
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2001                 $15,684                     $14,883
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2001                 $16,476                     $16,842
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2001                 $13,570                     $14,052
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2001                 $14,513                     $16,580
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2002                 $13,957                     $17,694
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2002                 $12,164                     $16,047
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2002                 $10,258                     $13,392
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2002                 $10,503                     $14,173
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2003                 $10,305                     $13,545
- ---------------------------------------------------------------------------------

Class B Shares

Comparison of Change in Value of $10,000 Hypothetical Investments in:
MidCap Fund (Class B) and S&P MidCap 400 Index.

[Line Graph]

- ---------------------------------------------------------------------------------
          Date             Value of Investment in Fund  S&P Midcap 400 Index
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/01/1997                 $10,000                     $10,000
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1997                 $10,370                     $10,388
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1998                 $12,460                     $11,532
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1998                 $13,150                     $11,285
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1998                 $10,440                      $9,652
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1998                 $13,356                     $12,374
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1999                 $14,968                     $11,584
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1999                 $16,971                     $13,224
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1999                 $18,052                     $12,113
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1999                 $25,842                     $14,195
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2000                 $32,430                     $15,996
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2000                 $31,569                     $15,469
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2000                 $33,732                     $17,348
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2000                 $22,868                     $16,680
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2001                 $16,250                     $14,883
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2001                 $17,041                     $16,842
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2001                 $14,007                     $14,052
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2001                 $14,958                     $16,580
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2002                 $14,358                     $17,694
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2002                 $12,485                     $16,047
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2002                 $10,503                     $13,392
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2002                 $10,733                     $14,173
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2003                 $10,423                     $13,545
- ---------------------------------------------------------------------------------

Class C Shares

Comparison of Change in Value of $10,000 Hypothetical Investments in:
MidCap Fund (Class C) and S&P MidCap 400 Index.

[Line Graph]

- ---------------------------------------------------------------------------------
          Date              Value of Investment in      S&P Midcap 400 Index
                                    Fund
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/01/1997                 $10,000                     $10,000
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1997                 $10,370                     $10,388
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1998                 $12,470                     $11,532
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1998                 $13,160                     $11,285
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1998                 $10,450                      $9,652
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1998                 $13,346                     $12,374
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1999                 $14,958                     $11,584
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1999                 $16,951                     $13,224
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1999                 $18,032                     $12,113
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1999                 $25,822                     $14,195
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2000                 $32,420                     $15,996
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2000                 $31,559                     $15,469
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2000                 $33,722                     $17,348
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2000                 $22,868                     $16,680
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2001                 $16,250                     $14,883
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2001                 $17,041                     $16,842
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2001                 $13,997                     $14,052
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2001                 $14,948                     $16,580
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2002                 $14,348                     $17,694
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2002                 $12,485                     $16,047
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2002                 $10,503                     $13,392
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2002                 $10,733                     $14,173
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2003                 $10,513                     $13,545
- ---------------------------------------------------------------------------------

Class N Shares

Comparison of Change in Value of $10,000 Hypothetical Investments in:
MidCap Fund (Class N) and S&P MidCap 400 Index.

[Line Graph]

- ---------------------------------------------------------------------------------
          Date          Value of Investment in Fund     S&P Midcap 400 Index
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/01/2001                 $10,000                     $10,000
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2001                  $8,506                      $9,257
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2001                  $8,930                     $10,475
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2001                  $7,349                      $8,740
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2001                  $7,861                     $10,312
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2002                  $7,554                     $11,005
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2002                  $6,576                      $9,980
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2002                  $5,542                      $8,329
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2002                  $5,670                      $8,815
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2003                  $5,558                      $8,424
- ---------------------------------------------------------------------------------

Class Y Shares

Comparison of Change in Value of $10,000 Hypothetical Investments in:
MidCap Fund (Class Y) and S&P MidCap 400 Index.

[Line Graph]

- ---------------------------------------------------------------------------------
          Date          Value of Investment in Fund     S&P Midcap 400 Index
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/01/1997                 $10,000                     $10,000
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1997                 $10,370                     $10,388
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1998                 $12,510                     $11,532
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1998                 $13,250                     $11,285
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1998                 $10,550                      $9,652
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1998                 $13,526                     $12,374
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/1999                 $15,199                     $11,584
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/1999                 $17,281                     $13,224
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/1999                 $18,442                     $12,113
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/1999                 $26,482                     $14,195
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2000                 $33,341                     $15,996
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2000                 $32,560                     $15,469
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2000                 $34,893                     $17,348
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2000                 $23,739                     $16,680
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2001                 $16,921                     $14,883
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2001                 $17,782                     $16,842
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2001                 $14,658                     $14,052
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2001                 $15,699                     $16,580
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2002                 $15,118                     $17,694
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       06/30/2002                 $13,196                     $16,047
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       09/30/2002                 $11,144                     $13,392
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       12/31/2002                 $11,444                     $14,173
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
       03/31/2003                 $11,224                     $13,545
- ---------------------------------------------------------------------------------

What are other Key Features of the Funds?

      The   description  of  certain  key  features  of  the  Funds  below  is
supplemented   by  each  Fund's   Prospectus   and   Statement  of  Additional
Information, which are incorporated by reference.

Investment  Management  and  Fees -  Under  each  Fund's  investment  advisory
agreement,  he Fund pays the  Manager an  advisory  fee at an annual rate that
declines on additional assets as the Fund grows.

- -------------------------------------------------------------------------------------
                 GMG Fund                                 MidCap Fund
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
1.20% of the first $400 million of         0.75% of the first $200 million of
average annual net assets,                 average annual net assets,
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
1.10% of the next $400 million, and        0.72% of the next $200 million,
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
1.00% of average annual net assets in      0.69% of the next $200 million,
excess of $800 million.
- -------------------------------------------------------------------------------------
                                        -------------------------------------------
                                        0.66% of the next $200 million,
                                        -------------------------------------------
                                        -------------------------------------------
                                        0.60% of the next $700 million,
                                        -------------------------------------------
                                        -------------------------------------------
                                        0.58% of the next $1 billion, and
                                        -------------------------------------------
                                        -------------------------------------------
                                        0.56% of average annual net assets in
                                        excess of $2.5 billion.
                                        -------------------------------------------

Based on average annual net assets of the respective Fund.

      The  management  fee for GMG Fund for the twelve  months ended March 31,
2003 was 1.20% of the  average  annual  net  assets  for each class of shares.
The  management fee for MidCap Fund for the twelve months ended March 31, 2003
was 0.70% of the  average  annual net  assets  for each  class of shares.  The
12b-1 distribution plans for both Funds were substantially similar.

- ---------------------------------------------------------------------------
                    Opp MidCap     Opp GMG        Combined Pro Forma
03/31/03            Class A        Class A        Class A
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Management Fee          0.70%          1.20%               0.70%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
12b-1 Fees              0.22%          0.02%1              0.22%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Other Expenses          0.69%          0.58%               0.69%
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Total Expenses          1.61%          1.80%               1.61%
- ---------------------------------------------------------------------------

"Other  Expenses"  include  transfer agent fees and custodial,  accounting and
legal expenses the Funds pay.  This chart is for illustrative purposes only.
1.  Class A shares  12b-1  fee is not the full 25 basis  points  due to monies
invested by OppenheimerFunds, Inc.

      The net assets under  management  for MidCap Fund on March 31, 2003 were
$684,398,615,  as  compared to  $3,259,981  for GMG Fund.  Effective  upon the
Closing of the  Reorganization,  the  management  fee rate for MidCap  Fund is
expected to be 0.70% of average annual net assets based on combined  assets of
the Funds as of March 31,  2003.  Additionally,  the "Other  Expenses"  of the
surviving  Fund are expected to be the same as the "Other  Expenses" of MidCap
Fund.

      For  a  detailed  description  of  each  Fund's  investment   management
agreement,   see  the  section  below   entitled   "Comparison  of  Investment
Objectives  and  Policies  - How  do  the  Account  Features  and  Shareholder
Services for the Funds Compare?"

      Transfer  Agency and Custody  Services - Both Funds receive  shareholder
accounting and other clerical services from  OppenheimerFunds  Services in its
capacity as transfer  agent and dividend  paying  agent.  It acts on an annual
per-account  fee  basis  for both  Funds.  The  terms of the  transfer  agency
agreement for both Funds are substantially similar.

      Citibank,  N.A., located at 111 Wall Street, New York, NY 10005, acts as
custodian of the securities and other assets of both GMG Fund and MidCap Fund.

      Distribution   Services  -  OppenheimerFunds   Distributor,   Inc.  (the
"Distributor")  acts  as the  principal  underwriter  in a  continuous  public
offering  of shares of both  Funds,  but is not  obligated  to sell a specific
number of shares.  Both Funds have  adopted  distribution  and  service  plans
under Rule 12b-1 of the Investment Company Act for their Class A shares.

      The 12b-1 fees for Class A shares of both GMG Fund and  MidCap  Fund are
service  plan fees which are a maximum  of 0.25% of average  annual net assets
of Class A shares.  The 12b-1  fees for Class B, Class C and Class N shares of
both Funds are  Distribution and Service plan fees which include a service fee
of 0.25% of average  annual net assets  and an  asset-based  sales  charge for
Class B and Class C shares of 0.75% and an  asset-based  sales charge of 0.25%
for Class N shares of the average annual net assets.

      For  a  detailed   description   of  each  Fund's   distribution-related
services,  see the section below titled  "Comparison of Investment  Objectives
and Policies - How do the Account  Features and  Shareholder  Services for the
Funds Compare?"

      Purchases, Redemptions,  Exchanges and other Shareholder Services - Both
Funds have nearly the same  requirements  and  restrictions in connection with
purchases,  redemptions and exchanges.  In addition, each Fund also offers the
same  types of  shareholder  services.  More  detailed  information  regarding
purchases, redemptions,  exchanges and shareholder services can be found below
in the section below titled "Comparison of Investment  Objectives and Policies
- - How  do  the  Account  Features  and  Shareholder  Services  for  the  Funds
Compare?"

      Dividends and  Distributions - Both Funds declare  dividends  separately
for each class of shares from net  investment  income  annually  and pay those
dividends to  shareholders in December on a date selected by the Board of each
Fund.

      For a  detailed  description  of each  Fund's  policy on  dividends  and
distributions,  see the section entitled "Comparison of Investment  Objectives
and Policies - How do the Account  Features and  Shareholder  Services for the
Funds Compare?"

  What are the Principal Risks of an Investment in GMG Fund and MidCap Fund?

      As with  most  investments,  investments  in  MidCap  Fund  and GMG Fund
involve  risks.  There can be no  guarantee  against  loss  resulting  from an
investment  in either Fund,  nor can there be any  assurance  that either Fund
will  achieve  its  investment   objective.   The  risks  associated  with  an
investment in each Fund are similar.  Because both Funds invest  substantially
in  stocks  of U.S.  companies,  the value of each  Fund's  portfolio  will be
affected  by  changes in the U.S.  stock  markets.  The  prices of  individual
stocks do not all move in the same  direction  uniformly  at the same time and
the volatility of their prices at times may be great.  A particular  company's
stock  price can be affected by among  other  things a poor  earnings  report,
loss of major customers,  major litigation against the company,  or changes in
government regulations affecting the company or its industry.

      For more  information  about the risks of the  Funds,  see "What are the
main  risks  associated  with  investment  in the  Funds?"  under the  heading
"Comparison of Investment Objectives and Policies."

                        REASONS FOR THE REORGANIZATION

      At a meeting of the Board of Trustees  of GMG Fund held April 28,  2003,
the Board  considered  whether  to approve  the  proposed  Reorganization  and
reviewed and  discussed  with the Manager and  independent  legal  counsel the
materials  provided by the Manager  relevant to the  proposed  Reorganization.
Included  in  the  materials  was  information  with  respect  to  the  Funds'
respective investment objectives and policies,  management fees,  distribution
fees and other operating expenses, historical performance and asset size.


      The  Board  reviewed  information  demonstrating  that  GMG  Fund  is  a
relatively  smaller fund with  approximately  $3.6 million in net assets as of
April  23,  2003.  The  Board  anticipates  that GMG  Fund's  assets  will not
increase  substantially  in size in the near  future.  In  comparison,  MidCap
Fund had  approximately  $723.1  million in net  assets as of April 23,  2003.
After  the   Reorganization,   the  shareholders  of  GMG  Fund  would  become
shareholders  of a larger  fund  that is  anticipated  to have  lower  overall
operating  expenses  than GMG Fund.  There  can be no  assurances  that  lower
operating  expenses  will  continue  into the future.  Economies  of scale may
benefit shareholders of GMG Fund.


      The Board  considered  the fact that both Funds have similar  investment
objectives  of  seeking   capital   appreciation.   Additionally,   the  Board
considered  that  both  Funds  invest  in  growth  companies.  However,  their
respective  focuses are  different.  Under normal  market  conditions,  MidCap
Fund invests at least 80% of its net assets (plus  borrowings  for  investment
purposes)  in  equity  securities  of  growth  companies  that  have a  market
capitalization  of  between  $2  billion  and $11.5  billion  (referred  to as
"mid-cap"  stocks).  It currently  invests mainly in equity securities of U.S.
companies.  GMG Fund invests  primarily in securities of growth companies that
are creating fundamental changes in the economy.

      The Board noted that MidCap  Fund's  management  fee is currently  lower
than  that  of  GMG  Fund.  The  Board  also  considered  that  MidCap  Fund's
performance has been better than that of GMG Fund.

      The Board also considered  that the procedures for purchases,  exchanges
and  redemptions  of shares of both Funds are very similar and that both Funds
offer the same investor services and options.

      The  Board   also   considered   the  terms   and   conditions   of  the
Reorganization, including that
there would be no sales charge  imposed in effecting  the  Reorganization  and
that the  Reorganization  is  expected  to be a tax-free  reorganization.  The
Board  concluded that GMG Fund's  participation  in the  transaction is in the
best  interests  of the Fund and its  shareholders,  notwithstanding  that the
lower pro forma expenses of the combined funds  (relative to GMG Fund) and the
historically  better performance of MidCap Fund is subject to change, and that
the  Reorganization  would  not  result  in a  dilution  of the  interests  of
existing shareholders of GMG Fund.

      After  consideration  of the above  factors,  and such other factors and
information  as the Board of GMG Fund deemed  relevant,  the Board,  including
the Trustees who are not  "interested  persons" (as defined in the  Investment
Company Act) of either GMG Fund or the Manager (the  "Independent  Trustees"),
unanimously  approved the Reorganization and the Reorganization  Agreement and
voted to recommend its approval to the shareholders of GMG Fund.

      The Board of MidCap Fund also determined that the  Reorganization was in
the best  interests of MidCap Fund and its  shareholders  and that no dilution
would result to those  shareholders.  MidCap Fund  shareholders do not vote on
the  Reorganization.  The  Board of MidCap  Fund,  including  the  Independent
Trustees,  unanimously  approved  the  Reorganization  and the  Reorganization
Agreement.

      For the  reasons  discussed  above,  the  Board,  on behalf of GMG Fund,
recommends  that you vote FOR the  Reorganization  Agreement.  If shareholders
of GMG Fund do not approve the  Reorganization  Agreement,  the Reorganization
will not take place.

                     INFORMATION ABOUT THE REORGANIZATION


This  is  only  a  summary  of  the  material  terms  of  the   Reorganization
Agreement.  You should read the actual form of  Reorganization  Agreement.  It
is attached as Exhibit A.


How Will the Reorganization be Carried Out?

      If the  shareholders of GMG Fund approve the  Reorganization  Agreement,
the  Reorganization  will take place after various conditions are satisfied by
GMG Fund and  MidCap  Fund,  including  delivery  of  certain  documents.  The
Closing Date is presently  scheduled  for  September 5, 2003 and the Valuation
Date is presently scheduled for September 4, 2003.

      If shareholders of GMG Fund approve the  Reorganization  Agreement,  GMG
Fund will  deliver to MidCap Fund  substantially  all of its net assets on the
closing  date.  In exchange,  shareholders  of GMG Fund will receive  Class A,
Class B, Class C,  Class N and Class Y MidCap  Fund  shares  that have a value
equal  to the  dollar  value of the  assets  delivered  by GMG Fund to  MidCap
Fund.  GMG Fund will then be  liquidated  and its  outstanding  shares will be
cancelled.  The stock transfer  books of GMG Fund will be  permanently  closed
at the close of business  on the  Valuation  Date.  Only  redemption  requests
received  by the  Transfer  Agent in  proper  form on or  before  the close of
business  on the  Valuation  Date will be  fulfilled  by GMG Fund.  Redemption
requests  received  after  that time  will be  considered  requests  to redeem
shares of MidCap Fund.


      Shareholders  of GMG Fund  who vote  their  Class A,  Class B,  Class C,
Class N and Class Y shares in favor of the Reorganization  will be electing in
effect to redeem their shares of GMG
Fund at net asset  value on the  Valuation  Date,  after GMG Fund  subtracts a
cash  reserve,  and reinvests the proceeds in Class A, Class B, Class C, Class
N and Class Y shares of MidCap Fund at net asset  value.  The cash  reserve is
that  amount  retained  by  GMG  Fund,  which  is  deemed  sufficient  in  the
discretion  of the Board for the  payment  of the  Fund's  outstanding  debts,
taxes,  and  expenses  of  liquidation.  The  cash  reserve  will  consist  of
approximately   $18,200  cash.  This  amount  of  cash  reserve  are  will  be
reflected in the pro forma  presentation  of NAV.  MidCap Fund is not assuming
any debts of GMG Fund except debts for unsettled  securities  transactions and
outstanding  dividend and  redemption  checks.  Any debts paid out of the cash
reserve will be those debts, taxes or expenses of liquidation  incurred by GMG
Fund on or before the Closing Date. GMG Fund will  recognize  capital gains or
losses   on  any   sales   of   portfolio   securities   made   prior  to  the
Reorganization.  The sales  contemplated in the Reorganization are anticipated
to be in the ordinary course of business of GMG Fund's activities.

      Under the  Reorganization  Agreement,  within one year after the Closing
Date,  GMG Fund shall:  (a) either pay or make  provision for all of its debts
and taxes;  and (b)  either  (i)  transfer  any  remaining  amount of the cash
reserve to MidCap Fund, if such  remaining  amount is not material (as defined
below) or (ii)  distribute  such remaining  amount to the  shareholders of GMG
Fund who were  shareholders on the Valuation Date. The remaining  amount shall
be deemed to be material if the amount to be distributed,  after deducting the
estimated  expenses of the distribution,  equals or exceeds one cent per share
of the number of GMG Fund shares  outstanding on the Valuation  Date. In order
to qualify for this rebate,  it is not necessary for a shareholder of GMG Fund
to continue to hold shares of the combined  entity after the Closing  Date. If
the cash  reserve is  insufficient  to satisfy any of GMG Fund's  liabilities,
the Manager will assume  responsibility  for any such  unsatisfied  liability.
Within  one  year  after  the  Closing  Date,   GMG  Fund  will  complete  its
liquidation.


      Under the Reorganization  Agreement,  either GMG Fund or MidCap Fund may
abandon and  terminate the  Reorganization  Agreement for any reason and there
shall be no  liability  for damages or other  recourse  available to the other
Fund,  provided,  however,  that in the event that one of the Funds terminates
this Agreement without reasonable cause, it shall, upon demand,  reimburse the
other Fund for all expenses,  including reasonable  out-of-pocket expenses and
fees incurred in connection with this Agreement.

      To the  extent  permitted  by law,  the  Funds  may  agree to amend  the
Reorganization  Agreement without  shareholder  approval.  They may also agree
to  terminate  and  abandon the  Reorganization  at any time before or, to the
extent permitted by law, after the approval of shareholders of GMG Fund.

Who Will Pay the Expenses of the Reorganization?


      The cost of printing  and mailing  the proxies and this  Prospectus  and
Proxy  Statement  will be borne by GMG Fund.  Those printing costs and mailing
costs are  estimated  to be $7,748 and $10,966,  respectively.  The Funds will
bear  the  cost of  their  respective  tax  opinions.  Any  documents  such as
existing  prospectuses  or  annual  reports  that are  included  in the  proxy
mailing or at a  shareholder's  request will be a cost of the Fund issuing the
document.    Any   other   out-of-pocket    expenses   associated   with   the
Reorganization  will be paid by the  Funds in the  amounts  incurred  by each.
The  approximate  cost of the  Reorganization  is  $38,433  for GMG Fund,  and
$11,500 for MidCap Fund.


What are the Tax Consequences of the Reorganization?


     The Reorganization is intended to qualify as a tax-free  reorganization for
federal income tax purposes under Section 368(a)(1) of the Internal Revenue Code
of 1986, as amended.  Based on certain assumptions and representations  received
from GMG Fund and MidCap Fund, it is expected to be the opinion of Deloitte &
Touche LLP,  tax  advisor to GMG Fund,  that  shareholders  of GMG Fund will not
recognize  any gain or loss for federal  income tax  purposes as a result of the
exchange of their shares for shares of MidCap  Fund,  and that  shareholders  of
MidCap  Fund will not  recognize  any gain or loss upon  receipt  of GMG  Fund's
assets.  If this type of tax opinion is not forthcoming by the Closing Date, the
Fund  may  still  choose  to  go  forward  with  the   reorganization,   pending
re-solicitation of shareholders and shareholder approval.  In addition,  neither
Fund is expected to recognize a gain or loss as a result of the Reorganization.



      Immediately  prior to the Valuation  Date,  GMG Fund will pay a dividend
which will have the effect of distributing to GMG Fund's  shareholders  all of
GMG Fund's net investment  company  taxable income for taxable years ending on
or prior to the Closing Date  (computed  without  regard to any  deduction for
dividends paid) and all of its net capital gains, if any,  realized in taxable
years  ending  on or  prior  to the  Closing  Date  (after  reduction  for any
available  capital loss  carry-forward).  Such  dividends  will be included in
the taxable income of GMG Fund's  shareholders  as ordinary income and capital
gain, respectively.

      You will continue to be  responsible  for tracking the purchase cost and
holding  period of your shares and should  consult your tax advisor  regarding
the  effect,  if any,  of the  Reorganization  in  light  of  your  individual
circumstances.  You  should  also  consult  your tax  advisor  as to state and
local and other tax consequences,  if any, of the Reorganization  because this
discussion only relates to federal income tax consequences.

What should I know about Class A, Class B, Class C, Class N and Class Y
shares of MidCap Fund?

      The rights of  shareholders  of both Funds are  substantially  the same.
The Declarations of Trust and By-Laws of both Funds are substantially  similar
with respect to rights  voting for the  election of  Trustees,  and rights for
mergers,  liquidations and distributions,  and redemptions.  Class A, Class B,
Class C, Class N and/or Class Y shares of MidCap Fund will be  distributed  to
shareholders  of Class A, Class B,  Class C, Class N and/or  Class Y shares of
GMG Fund,  respectively,  in connection  with the  Reorganization.  Each share
will be fully paid and nonassessable  when issued,  will have no preemptive or
conversion  rights and will be  transferable on the books of MidCap Fund. Each
Fund's  Declaration of Trust contains an express  disclaimer of shareholder or
Trustee   liability   for   the   Fund's   obligations,   and   provides   for
indemnification  and  reimbursement  of expenses  out of its  property for any
shareholder held personally  liable for its obligations.  Neither Fund permits
cumulative voting.  The shares of MidCap Fund will be recorded  electronically
in each  shareholder's  account.  MidCap Fund will then send a confirmation to
each  shareholder.   Class  A  shareholders  of  GMG  Fund  whose  shares  are
represented by outstanding  share  certificates will not be allowed to redeem,
transfer or pledge  shares of MidCap Fund they  receive in the  Reorganization
until the exchanged GMG Fund  certificates  have been returned to the Transfer
Agent.  Shareholders  of Class B,  Class C,  Class N and Class Y shares of GMG
Fund do not  have  certificates  representing  shares.  Their  shares  will be
cancelled.

      Like GMG Fund,  MidCap Fund does not routinely  hold annual  shareholder
meetings.

            COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES

      This section  describes key  investment  policies of GMG Fund and MidCap
Fund, and certain  noteworthy  differences  between the investment  objectives
and policies of the two Funds.  For a complete  description  of MidCap  Fund's
investment  policies and risks,  please review its prospectus and Statement of
Additional  Information  dated December 23, 2002.  That Prospectus is attached
to this Prospectus and Proxy Statement as an enclosure.

      Are there any significant  differences between the investment objectives
and strategies of the Funds?

      In considering  whether to approve the  Reorganization,  shareholders of
GMG Fund should  consider the differences in investment  objectives,  policies
and risks of the Funds.  Further  information  about  MidCap Fund is set forth
in its Prospectus,  which  accompanies this Prospectus and Proxy Statement and
is incorporated herein by reference.  Additional  information about both Funds
is set forth in their  respective  Statements  of Additional  Information  and
Annual  Reports,  which may be obtained  upon request to the  Transfer  Agent.
See "Information about GMG Fund" and "Information about MidCap Fund."

      GMG Fund and  MidCap  Fund  have  similar  investment  objectives.  Both
Funds' investment objective is to seek capital  appreciation,  though GMG Fund
seeks  long-term  capital  appreciation.  GMG Fund invests in companies of any
size but  primarily  focuses on  securities  of small to mid sized  companies.
MidCap Fund invests primarily in mid cap stocks.

      MidCap Fund may invest its assets in a variety of  industry  categories,
although  it may  from  time  to  time  emphasize  investments  in one or more
industries.  For  example,  MidCap  Fund  has at  certain  times,  invested  a
significant  amount of its assets in  technology  companies.  MidCap Fund does
not  concentrate  25% or  more  of its  investments  in  companies  in any one
industry.

What are the Main Risks Associated with an investment in the Funds?

      Like  all  investments,  an  investment  in both of the  Funds  involves
risk.  There is no  assurance  that  either  Fund  will  meet  its  investment
objective.   The   achievement   of  the  Funds'  goals  depends  upon  market
conditions,   generally,   and  on  the  portfolio  manager's  analytical  and
portfolio  management  skills. The risks described below collectively form the
risk  profiles  of  the  Funds,  and  can  affect  the  value  of  the  Funds'
investments,  investment  performance and prices per share.  There is also the
risk that poor  securities  selection  by the  Manager  will cause the Fund to
underperform  other funds  having a similar  objective.  These risks mean that
you can lose money by investing  in either Fund.  When you redeem your shares,
they may be worth more or less than what you paid for them.

How Do the Investment Policies of the Funds Compare?

      Both  funds  invest  primarily  in mid-cap  stocks.  GMG Fund can invest
without limit in foreign  securities.  GMG Fund  currently  does not intend to
invest more than 25% of its net assets in foreign securities.  Although MidCap
Fund invests  primarily in equity  securities of U.S.  companies,  it can also
buy foreign stocks.

      Risks of  Investing  in Stocks.  Stocks  fluctuate  in price,  and their
short-term  volatility  at  times  may be  great.  Because  the  Funds  invest
primarily  in common  stocks,  the  value of each  Fund's  portfolio  willl be
affected  by  changes  in the stock  markets.  Market  risk will  affect  each
Fund's net asset value per share,  which will  fluctuate  as the values of the
respective  Fund's  portfolio  securities  change.  A variety of  factors  can
affect the price of a particular stock and the prices of individual  stocks do
not all move in the same  direction  uniformly or at the same time.  Different
stock markets may behave differently from each other.

      Other  factors  can  affect a  particular  stock's  price,  such as poor
earnings  reports by the issuer,  loss of major  customers,  major  litigation
against the issuer, or changes in government  regulations affecting the issuer
or its industry.

      Industry  and  Sector  Focus.  At  times  the  Funds  may  increase  the
relative emphasis of its investments in a particular  industry or sector.  The
prices of stocks of issuers in a  particular  industry of sector may go up and
down in response to changes in economic  conditions,  government  regulations,
availability of basic resources or supplies,  or other events that affect that
industry or sector more than others.  To the extent that a Fund  increases the
relative emphasis of its investments in a particular  industry or sector,  its
share values may  fluctuate in response to events  affecting  that industry or
sector.

      Risks of Growth Stocks.  Stocks of growth companies,  particularly newer
companies,  may offer opportunities for greater long-term capital appreciation
but may be more volatile than stocks of larger,  more  established  companies.
They have greater risks if the company's  earnings growth or stock price fails
to increase as expected.

      Risks of Technology  Stocks.  The MidCap Fund may also be subject to the
risks  associated  with  technology  stocks.  To the extent the MidCap Fund is
invested in stocks of technology companies,  the value of the Fund's shares is
particularly   vulnerable  to  risks  affecting  technology  companies  and/or
companies that affect those technology  companies.  The technology  sector has
historically  exhibited great  fluctuations in valuations.  The Fund's Manager
takes  this  into  account  when  evaluating  the  long-term   merits  of  its
investments.

      The stock prices of technology  companies during the past few years have
been  highly  volatile,  largely  due to the rapid pace of product  change and
development  within this  sector.  This  phenomenon  may also result in future
stock price  volatility.  In  addition,  technologies  that are  dependent  on
consumer  demand  may be  more  sensitive  to  changes  in  consumer  spending
patterns.    Technology    companies   focusing   on   the   information   and
telecommunications  sectors may also be subject to international,  federal and
state  regulations  and  may  be  adversely   affected  by  changes  in  those
regulations.

      Special  Risks of Mid-Cap  Stocks.  In addition,  the MidCap Fund may be
subject  to the  risks  associated  with the  Fund's  investments  in  mid-cap
companies.  While  stocks  of  mid-cap  companies  may offer  greater  capital
appreciation  potential than investments in larger  capitalization  companies,
they  may  also  present  greater  risks.  Mid-Cap  stocks  tend  to  be  more
sensitive to changes in an issuer's earnings  expectations.  They tend to have
lower  trading  volumes  than large  capitalization  securities.  As a result,
they may experience more abrupt and erratic price movements.

      Since  mid-cap  companies   typically  reinvest  a  high  proportion  of
earnings in their own  businesses,  they may lack the dividend  yield that can
help cushion  their total return in a declining  market.  Many mid-cap  stocks
are traded in  over-the-counter  markets and therefore may be less liquid than
stocks of larger  exchange-traded  issuers.  That means  that the MidCap  Fund
could have  greater  difficulty  selling a security  at an  acceptable  price,
especially  in  periods  of  market  volatility.  That  factor  increases  the
potential for losses to the Fund.

How Do the Investment Policies of the Funds Compare?

      Other Equity  Securities.  While MidCap Fund  emphasizes  investments in
common  stocks,  it  can  buy  preferred   stocks,   warrants  and  securities
convertible  into  common  stock,  which may be  subject  to credit  risks and
interest  rate  risks.  Midcap  Fund will not  invest  more than 5% of its net
assets in convertible  securities that are rated below  investment  grade by a
nationally  recognized rating organization such as Moody's Investor Service or
that are assigned a comparable rating by the Midcap Fund's Manager.

      Similarly,  while GMG Fund also emphasizes investments in common stocks,
it can also buy preferred stocks,  warrants,  and securities  convertible into
common  stock.  GMG Fund may invest in the stocks of  companies of every size,
small, medium and large capitalization.

      Cyclical  Opportunities.  Each Fund may also seek to take  advantage  of
changes in the business  cycle by investing in companies that are sensitive to
those changes,  if the Manager or the  Adviser/Sub-Adviser  believes they have
growth  potential.  For example,  when the economy is expanding,  companies in
the consumer  durables and technology  sectors may benefit and offer long-term
growth  opportunities.  The MidCap  Fund  focuses on seeking  growth  over the
ling  term,  but may seek to take  tactical  advantage  of  short-term  market
movements or events affecting particular issuers or industries.

      Illiquid  and  Restricted   Securities.   Investments  may  be  illiquid
because  they do not have an active  trading  market,  making it  difficult to
value them or dispose of them  promptly at an acceptable  price.  A restricted
security  is one that has a  contractual  restriction  on its  resale or which
cannot be sold publicly  until it is registered  under the  Securities  Act of
1933.  Neither  MidCap  nor GMG  Fund  will  invest  more  than 15% of its net
assets in illiquid or restricted  securities.  Certain  restricted  securities
that are eligible for resale to qualified institutional  purchasers may not be
subject to that limit.  The Manager monitors  holdings of illiquid  securities
on an ongoing  basis to  determine  whether to sell any  holdings  to maintain
adequate liquidity.

      Foreign  Investing.  GMG  Fund  can  invest  without  limit  in  foreign
securities.  The Fund  currently  does not  intend to invest  more than 25% of
its net assets in foreign  securities.  It can buy  securities of both foreign
governments and companies.

      MidCap  Fund can buy  securities  in any  country,  including  developed
countries  and emerging  markets.  The Fund has no limits on the amount of its
assets  that  can be  invested  in  foreign  securities,  but has  adopted  an
operating policy limiting its investments in foreign  securities to 10% of its
total assets. It does not expect to invest  substantial  amounts of its assets
in foreign stocks.

      While foreign  securities  may offer special  investment  opportunities,
they are subject to special  risks that can reduce the Fund's share prices and
returns.

      Special  Risks of  Emerging  Markets.  Both GMG Fund and MidCap Fund can
invest in emerging  markets.  Emerging and developing  markets abroad may also
offer special  opportunities  for growth investing but have greater risks than
more developed foreign markets,  such as those in Europe,  Canada,  Australia,
New  Zealand  and  Japan.  There  may be less  liquidity  in their  securities
markets,  and  settlements of purchases and sales of securities may be subject
to additional delays.  They are subject to greater risks of limitations on the
repatriation  of income and profits because of currency  restrictions  imposed
by local  governments.  Those  countries  may also be  subject  to the risk of
greater  political  and  economic  instability,  which can greatly  affect the
volatility of prices of securities in those countries.

      Derivative  Investments.  Both Funds can invest in a number of different
kinds of "derivative"  investments.  In general terms, a derivative investment
is an  investment  contract  whose value  depends on (or is derived  from) the
value  of an  underlying  asset,  interest  rate or  index.  Options,  futures
contracts,  structured notes such as indexed securities or inverse securities,
collateralized  mortgage  obligations  ("CMOs")  and hedging  instruments  are
"derivative  instruments" GMG Fund can use. Options,  futures  contracts,  and
other hedging instruments may be considered derivative  investments for MidCap
Fund.  In  addition to using  derivatives  for  hedging,  both Funds might use
other  derivative  investments  because they offer the potential for increased
income and principal  value.  GMG Fund and MidCap Fund are not required to use
derivative investments in seeking their objectives.

      Derivatives  have risks.  If the issuer of the  derivative  does not pay
the amount due,  the Funds can lose money on the  investment.  The  underlying
security or investment on which the  derivative is based,  and the  derivative
itself,  might not  perform the way the Manager of MidCap Fund and the Adviser
or  Sub-Adviser  of GMG Fund  expected it to perform.  Interest rate and stock
market  changes in the U.S. and abroad may also  influence the  performance of
derivatives.  As a result  of these  risks,  both  Funds  could  realize  less
principal or income from the investment  than expected or their hedge might be
unsuccessful.  If that  happens,  the Funds' share prices could fall.  Certain
derivative investments held by the Funds may be illiquid.

      Borrowing and  Leveraging.  For GMG Fund,  certain types of  investments
or trading  strategies  (such as  borrowing  money to  increase  the amount of
investment)  may be subject to leverage  risk.  This means a relatively  small
market  movement  may result in large  changes in the value of an  investment.
Certain  investments or trading strategies that involve leverage can result in
losses that greatly exceed the amount originally invested.  Derivatives may be
difficult or  impossible  to sell at the time that the seller would like or at
the price that the seller believes the security is currently worth.

      MidCap  Fund has the  ability  to borrow for  leverage  up to 10% of the
value of its net  assets  from  banks on an  unsecured  basis  to  invest  the
borrowed funds in portfolio  securities.  This speculative  technique is known
as "leverage."  MidCap Fund may borrow only from banks.  Currently,  under the
Investment  Company  Act,  a mutual  fund may  borrow  only from banks and the
maximum  amount  it  may  borrow  is up  to  one-third  of  its  total  assets
(including the amount  borrowed) less all liabilities and  indebtedness  other
than  borrowing.  If the value of MidCap Fund's assets fails to meet this 300%
asset  coverage  requirement,  the Fund will reduce its bank debt within three
days to meet the requirement.  To do so, the Fund might have to sell a portion
of its investments at a disadvantageous time.

      MidCap Fund will pay interest on these loans,  and that interest expense
will raise the  overall  expenses  of the Fund and reduce its  returns.  If it
does borrow,  its expenses will be greater than  comparable  funds that do not
borrow for  leverage.  Additionally,  MidCap  Fund's net asset value per share
might  fluctuate  more  than  that of  funds  that do not  borrow.  Currently,
MidCap Fund does not contemplate  using this technique,  but if it does so, it
will not likely do so to a substantial degree.

      Neither Fund expects to borrow funds for investing purposes.

      Hedging.   Both  Funds  can  buy  and  sell  certain  kinds  of  futures
contracts,  put  and  call  options  and  forward  contracts.  These  are  all
referred to as "hedging  instruments."  The Funds are not required to hedge to
seek  their  objectives.  The Funds have  limits on their use of  hedging  and
types  of  hedging  instruments  that  can be  used,  and do not use  them for
speculative purposes.

      Some of these  strategies  could be used to hedge the  Funds'  portfolio
against price fluctuations.  Other hedging strategies,  such as buying futures
and call  options,  could  increase  the  Funds'  exposure  to the  securities
market.  Forward  contracts  can be used  to try to  manage  foreign  currency
risks on both Funds'  foreign  investments.  Foreign  currency  options can be
used to try to  protect  against  declines  in the  dollar  value  of  foreign
securities  the Funds own,  or to protect  against an  increase  in the dollar
cost of buying foreign securities.

      There are also special risks in particular hedging  strategies.  Options
trading  involves  the payment of premiums  and has special tax effects on the
Funds.  If the  Adviser  or  Sub-Adviser  for GMG Fund,  and the  Manager  for
MidCap  Fund use a  hedging  instrument  at the wrong  time or  judged  market
conditions  incorrectly,  the hedge might fail and the  strategy  could reduce
the respective  Fund's return.  Both Funds could also experience losses if the
prices of their futures and options  positions are not  correlated  with their
other  investments  or if they  could not close out a  position  because of an
illiquid market.

      Portfolio  Turnover.  Both  Funds can  engage in  short-term  trading to
achieve their respective  objectives.  Portfolio  turnover  affects  brokerage
costs the Funds  pay.  If GMG Fund  realizes  capital  gains when it sells its
portfolio investments,  generally it must pay out those gains to shareholders,
increasing  non-retirement  plan or non-IRA or  non-education  savings account
shareholders'  taxable  distributions.  If MidCap Fund realizes  capital gains
when it sells  its  portfolio  investments,  generally  it must pay out  those
gains to shareholders, increasing their taxable distributions.

      Investing  in Small,  Unseasoned  Companies.  Both  Funds can  invest in
securities of small,  unseasoned companies.  s that have been in operation for
less than three (3)  years,  including  the  operations  of any  predecessors.
Securities  of these  companies  may be subject to volatility in their prices.
They may have a limited trading market,  which may adversely affect the Funds'
ability to  dispose  of them and can reduce the price the Funds  might be able
to obtain for them.  Other  investors  that own a security  issued by a small,
unseasoned  issuer  for  which  there is  limited  liquidity  might  trade the
security when the Funds are  attempting  to dispose of their  holdings of that
security.  In that  case the  Funds  might  receive  a lower  price  for their
holdings  than  might  otherwise  be  obtained.  These  are  more  speculative
securities and can increase the Funds' overall portfolio risks.

      Repurchase  Agreements.  Both Funds can  acquire  securities  subject to
repurchase agreements.  In a repurchase transaction,  the Funds buy a security
from, and  simultaneously  resell it to, an approved vendor for delivery on an
agreed-upon  future date.  The resale price  exceeds the purchase  price by an
amount that reflects an  agreed-upon  interest  rate  effective for the period
during which the repurchase  agreement is in effect.  Approved vendors include
U.S.  commercial banks, U.S. branches of foreign banks, or broker-dealers that
have been  designated as primary dealers in government  securities.  They must
meet credit requirements set by the Funds' Adviser from time to time.

      The  majority of these  transactions  run from day to day,  and delivery
pursuant  to the  resale  typically  occurs  within  one to  five  days of the
purchase.  Repurchase  agreements  having a  maturity  beyond  seven  days are
subject to the Funds' limits on holding illiquid  investments.  The Funds will
not enter into a  repurchase  agreement  that  causes more than 15% of each of
their net  assets to be  subject to  repurchase  agreements  having a maturity
beyond  seven (7) days.  There is no limit on the  amount  of the  Funds'  net
assets  that may be subject to  repurchase  agreements  having  maturities  of
seven days or less.

      Purchase and Sale  Contracts.  GMG Fund may enter into purchase and sale
contracts.   A  purchase  and  sale   contract  is  similar  to  a  repurchase
agreement,  but  purchase  and  sale  contracts  provide  that  the  purchaser
receives any interest on the  security  paid during the period.  If the seller
fails to repurchase the security and the market value  declines,  GMG Fund may
lose money.

      Short  Sales.  GMG Fund has the  ability  to have up to 20% of its total
assets  in short  positions.  GMG Fund may  make  short  sales of  securities,
either as a hedge against potential  declines in value of a portfolio security
or to  realize  appreciation  when a  security  that  the  Fund  does  not own
declines in value.  When GMG Fund makes a short sale,  it borrows the security
sold short and  delivers  it to the  broker-dealer  through  which it made the
short sale as  collateral  for its  obligation  to deliver the  security  upon
conclusion  of the sale.  The Fund may have to pay a fee to borrow  particular
securities and is often  obligated to turn over any payments  received on such
borrowed securities to the lender of the securities.

      GMG Fund's  obligations to replace the borrowed security will be secured
by collateral deposited with the broker-dealer,  usually cash, U.S. Government
securities  or  other  liquid  securities  similar  to  those  borrowed.  With
respect  to  uncovered  short  positions,  GMG Fund will also be  required  to
deposit  similar  collateral  with  its  custodian  to  the  extent,  if  any,
necessary so that the value of both  collateral  deposits in the  aggregate is
at all  times  equal  to at  least  100% of the  current  market  value of the
security sold short.  Depending on arrangements  made with the broker - dealer
from which it borrowed the  security,  regarding  payment over of any payments
received by the Fund on such  security,  the Fund may not receive any payments
(including interest) on its collateral deposited with such broker-dealer.

      GMG Fund  will not make a short  sale if,  after  giving  effect to such
sale,  the market value of all  securities  sold short exceeds 5% of the value
of its total assets.

      Temporary  Defensive  and  Interim  Investments.  In times of adverse or
unstable market,  economic or political  conditions,  both Funds can invest up
to  100%  of  their  assets  in  temporary  defensive   investments  that  are
inconsistent with the Fund's principal investment  strategies.  Generally they
would  be  cash  equivalents   (such  as  commercial   paper),   money  market
instruments,   short-term  debt  securities,   U.S.   government   securities,
repurchase  agreements  and in  the  case  of GMG  Fund,  purchase  and  sales
contracts.  They could include other  investment  grade debt  securities.  GMG
Fund  can also  invest  in such  short-term  securities  for  cash  management
purposes.  MidCap Fund might also hold these types of  securities  pending the
investment of proceeds from the sale of Fund's shares or portfolio  securities
or to meet  anticipated  redemptions  of Fund shares.  To the extent the Funds
invest in these securities,  either  defensively,  or in the case of GMG Fund,
for  cash  management  purposes,  they  might  not  achieve  their  investment
objectives of capital appreciation.

What are the fundamental investment restrictions of the Funds?

      Both  GMG  Fund and  MidCap  Fund  have  certain  additional  investment
restrictions  that are  fundamental  policies,  changeable only by shareholder
approval.  MidCap Fund's  investment  objective is a fundamental  policy,  GMG
Fund's investment objective is not. Generally,  these investment  restrictions
are similar between the Funds and are discussed below:

         |_|      Neither Fund can buy securities  issued or guaranteed by any
         one issuer if more than 5% of their  total  assets  would be invested
         in  securities of that issuer or if they would then own more than 10%
         of that issuer's voting securities.  That restriction  applies to 75%
         of each Fund's total  assets.  The limit does not apply to securities
         issued  by  the  U.S.   government   or  any  of  its   agencies   or
         instrumentalities,  and in the case of GMG Fund,  securities of other
         investment companies.
      |_|   Neither  Fund can  invest  in  physical  commodities  or  physical
         commodity  contracts.  However,  the Funds  can buy and sell  hedging
         instruments  to  the  extent  specified  in  their  Prospectuses  and
         Statement  of  Additional  Information  from time to time.  The Funds
         can  also  buy  and  sell  options,  futures,   securities  or  other
         instruments  backed  by, or the  investment  return  from  which,  is
         linked to changes in the price of, physical commodities.
|_|   MidCap  Fund  cannot  lend  money.  However,  it can  invest in all or a
         portion of an issue of bonds,  debentures,  commercial paper or other
         similar corporate  obligations.  The Fund may also lend its portfolio
         securities  subject to the restrictions  stated in its Prospectus and
         Statement of  Additional  Information  and can enter into  repurchase
         transactions.
|_|   GMG Fund cannot make loans  except (a)  through  lending of  securities,
         (b) through the purchase of debt instruments,  loan participations or
         similar evidences of indebtedness,  (c) through an inter-fund lending
         program  with other  affiliated  funds,  and (d)  through  repurchase
         agreements.
      |_|   Neither Fund can concentrate  investments.  That means they cannot
         invest  25% or more of their  total  assets in  companies  in any one
         industry.
      |_|   Neither  Fund can  underwrite  securities  of other  companies.  A
         permitted  exception  is in case they are  deemed to be  underwriters
         under the Securities  Act of 1933 when reselling any securities  held
         in their own portfolio.
|_|   Neither  Fund can invest in real estate or in  interests in real estate.
         However,  the Funds can  purchase  readily-marketable  securities  of
         companies holding real estate or interests in real estate.
|_|   Neither Fund can issue "senior  securities."  However,  that restriction
         does not  prohibit  the Funds  from  borrowing  money  subject to the
         provisions set forth in their  Statements of Additional  Information,
         or from  entering  into  margin,  collateral  or escrow  arrangements
         permitted by their other investment policies.

|_|   GMG Fund cannot borrow money in excess of 33 1/3% of the value of its
         total assets. The Fund may borrow only from banks and/or affiliated
         investment companies. With respect to this fundamental policy, the
         Fund can borrow only if it maintains a 300% ratio of assets to
         borrowings at all times in the manner set forth in the Investment
         Company Act.  MidCap Fund does not have such a fundamental
         investment restriction.


How do the Account Features and Shareholder Services for the Funds Compare?

      Investment  Management - Pursuant to each investment advisory agreement,
the Manager acts as the investment  advisor for both Funds.  For GMG Fund, the
Manager has retained  Gartmore Mutual Fund Capital Trust, the Sub-Advisor,  to
provide day-to-day  portfolio management for GMG Fund. The sub-advisory fee is
paid by the Manager out of its management  fee. Under the Investment  Advisory
Agreement  for MidCap Fund and under the  Subadvisory  Agreement for GMG Fund,
the  Manager,  Adviser,  or  Sub-Adviser  is  authorized  and  directed to (i)
regularly  provide  investment  advice and  recommendations  to each Fund with
respect to the Funds'  investments,  investment  policies and the purchase and
sale of  securities  and other  investments;  (ii)  supervise  and monitor the
investment  program  of each  Fund and the  composition  of its  portfolio  to
determine what securities and other  investments shall be purchased or sold by
the  Funds;  and  (iii)  arrange  for the  purchase  of  securities  and other
investments  for each Fund and the sale of  securities  and other  investments
held in the portfolio of each Fund.

      The investment  advisory  agreements state that the Manager will provide
administrative  services for the Funds,  including compilation and maintenance
of records,  preparation and filing of reports required by the SEC, reports to
shareholders,  and composition of proxy statements and registration statements
required by Federal and state  securities  laws. The  administrative  services
to be provided by the Manager under the investment  advisory agreement will be
at its own expense.

      Expenses  not  expressly  assumed  by  the  Manager  under  each  Fund's
advisory  agreement  or by the  Distributor  under the  General  Distributor's
Agreement  are paid by the Funds.  The  investment  advisory  agreements  list
examples of expenses paid by the Funds,  the major  categories of which relate
to interest,  taxes,  brokerage commissions,  fees to certain Trustees,  legal
and audit  expenses,  custodian and transfer  agent  expenses,  share issuance
costs,  certain printing and registration  costs and  non-recurring  expenses,
including litigation costs.

      Both  investment  advisory  agreements  generally  provide  that  in the
absence  of  willful   misfeasance,   bad  faith,   gross  negligence  in  the
performance of its duties or reckless  disregard of its obligations and duties
under the  investment  advisory  agreement,  the Manager is not liable for any
loss sustained by reason of good faith errors or omissions in connection  with
any  matters  to which the  agreement(s)  relate.  The  agreements  permit the
Manager to act as investment advisor
for any other person,  firm or corporation.  Pursuant to each  agreement,  the
Manager is permitted to use the name  "Oppenheimer"  in connection  with other
investment  companies  for which it may act as  investment  advisor or general
distributor.  If the Manager shall no longer act as investment  advisor to the
Funds,  the  Manager  may  withdraw  the  right  of the  Funds to use the name
"Oppenheimer" as part of their names.

      The Manager is controlled by  Oppenheimer  Acquisition  Corp., a holding
company  owned  in part by  senior  officers  of the  Manager  and  ultimately
controlled  by  Massachusetts  Mutual Life  Insurance  Company,  a mutual life
insurance  company that also advises  pension plans and investment  companies.
The Manager has been an investment  advisor  since  January 1960.  The Manager
(including  subsidiaries  and an affiliate)  managed more than $120 billion in
assets as of March 31, 2003,  including other Oppenheimer funds with more than
7  million  shareholder  accounts.  The  Manager  is  located  at 498  Seventh
Avenue,  10th Floor, New York, New York 10018.  OppenheimerFunds  Services,  a
division of the Manager,  acts as transfer and shareholder servicing agent and
is paid an annual  per-account fee by each of GMG Fund and MidCap Fund and for
certain other open-end funds managed by the Manager and its affiliates.

      Distribution  -  Pursuant  to  General  Distributor's  Agreements,   the
Distributor acts as principal  underwriter in a continuous  public offering of
shares of GMG Fund and MidCap  Fund,  but is not  obligated to sell a specific
number  of  shares.   Expenses  normally  attributable  to  sales,   including
advertising  and the cost of  printing  and  mailing  prospectuses  other than
those  furnished  to  existing  shareholders,  are  borne by the  Distributor,
except for those for which the  Distributor  is paid under  each  Fund's  Rule
12b-1 Distribution and Service Plan described below.

      The Service Plan  provides  for the  reimbursement  to  OppenheimerFunds
Distributor,  Inc. (the  "Distributor"),  for a portion of its costs  incurred
in connection with the personal  service and maintenance of accounts that hold
Class A shares of the  respective  Funds.  Under  the  Class A Service  Plans,
reimbursement  is made  quarterly  at an annual rate that may not exceed 0.25%
of the average  annual net assets of Class A shares of the  respective  Funds.
The  Distributor  currently  uses all of  those  fees to  compensate  dealers,
brokers,  banks and  other  financial  institutions  quarterly  for  providing
personal  service and  maintenance  of accounts of their  customers  that hold
Class A shares of the respective Funds.

      Both Funds have adopted  Distribution  and Service Plans and  Agreements
under Rule 12b-1 of the Investment  Company Act for Class B, Class C and Class
N shares.  These plans  compensate the  Distributor for its services and costs
in  connection  with the  distribution  of Class B, Class C and Class N shares
and the personal service and maintenance of shareholder  accounts.  Under each
Class B,  Class C and Class N Plan,  the Funds pay the  Distributor  a service
fee  at an  annual  rate  of  0.25%  of  average  annual  net  assets  and  an
asset-based  sales  charge for Class B and Class C at an annual  rate of 0.75%
of  average  annual  net  assets.  Under  the  Class N Plan,  the Funds pay an
asset-based  sales  charge at an annual  rate of 0.25% of  average  annual net
assets.  All fee amounts are computed on the average  annual net assets of the
class  determined  as of the close of each regular  business day of each Fund.
The  Distributor  uses  all of the  service  fees to  compensate  dealers  for
providing  personal  services and  maintenance of accounts of their  customers
that hold  shares of the  Funds.  The  Class B and Class N  asset-based  sales
charge is  retained  by the  Distributor.  After the first  year,  the Class C
asset-based   sales  charge  is  paid  to  the  broker-dealer  as  an  ongoing
concession  for  shares  that have been  outstanding  for a year or more.  The
terms  of  the  Funds'   respective   Distribution   and  Service   Plans  are
substantially similar.

      Purchases and Redemptions - Both Funds are part of the  OppenheimerFunds
family  of  mutual  funds.   The  procedures  for  purchases,   exchanges  and
redemptions  of shares of the Funds are  nearly  identical;  however,  for GMG
Fund,  not only can shares be redeemed by mail and  telephone,  but by wire as
well.  Shares of either Fund may be exchanged  for shares of the same class of
other Oppenheimer funds offering such shares.  Exchange privileges are subject
to amendment or termination at any time.

      Both Funds  have the same  initial  and  subsequent  minimum  investment
amounts  for the  purchase  of  shares.  These  amounts  are  $1,000  and $50,
respectively.  Both  Funds  have a maximum  initial  sales  charge of 5.75% on
Class A shares for purchases of less than  $25,000.  The sales charge of 5.75%
is reduced for  purchases of Class A shares of $25,000 or more.  Investors who
purchase  $1 million or more of Class A shares  pay no initial  sales  charge.
Class B shares of the Funds are sold  without a  front-end  sales  charge  but
investors  will pay an annual  asset-based  sales  charge.  If investors  sell
their shares  within six years of buying them,  they will normally pay a CDSC.
The CDSC begins at 5% for shares  redeemed  in the first year and  declines to
1% in the sixth  year and is  eliminated  after  that.  Class C shares  may be
purchased  without an initial sales charge,  but investors  will pay an annual
asset-based  sales charge,  and if redeemed within 12 months of buying them, a
CDSC of 1% may be deducted.  Class N shares  (available  only through  certain
retirement  plans)  are  purchased  without  an  initial  sales  charge,   but
investors will pay an annual  asset-based sales charge, and if redeemed within
18 months of the retirement  plan's first  purchase of Class N shares,  a CDSC
of 1% may be deducted.

      Class A,  Class B,  Class C,  Class N and Class Y shares of MidCap  Fund
received in the  Reorganization  will be issued at net asset value,  without a
sales charge and no CDSC will be imposed on any GMG Fund shares  exchanged for
MidCap Fund shares as a result of the Reorganization.  However,  any CDSC that
applies to GMG Fund shares as of the date of the  exchange  will carry over to
MidCap Fund shares received in the Reorganization.

      Shareholder  Services - Both Funds also offer the following  privileges:
(i) Right of  Accumulation,  (ii)  Letter of  Intent,  (iii)  reinvestment  of
dividends  and  distributions  at  net  asset  value,  (iv)  net  asset  value
purchases by certain  individuals and entities,  (v) Asset Builder  (automatic
investment)   Plans,   (vi)  Automatic   Withdrawal  and  Exchange  Plans  for
shareholders  who own  shares  of the Funds  valued  at $5,000 or more,  (vii)
AccountLink and PhoneLink arrangements,  (viii) exchanges of shares for shares
of the  same  class  of  certain  other  funds at net  asset  value,  and (ix)
telephone  and  Internet  redemption  and exchange  privileges.  GMG Fund also
offers  wire  redemptions  of fund  shares  (for a fee);  MidCap Fund does not
offer  this  feature.  All of such  services  and  privileges  are  subject to
amendment  or  termination  at any time and are  subject  to the  terms of the
Funds' respective prospectuses.

      Dividends  and  Distributions  - Both Funds intend to declare  dividends
separately  for each class of shares from net  investment  income on an annual
basis  and to pay  those  dividends  to  shareholders  in  December  on a date
selected by the Board of Trustees of each Fund.  Dividends
and the  distributions  paid on Class A,  Class B, Class C, Class N or Class Y
shares may vary over time, depending on market conditions,  the composition of
the Funds'  portfolios,  and expenses borne by the particular class of shares.
Dividends  paid on Class A and Class Y shares  will  generally  be higher than
those  paid on Class B,  Class C and Class N shares.  That is  because  of the
effect  of the  asset-based  sales  charge  on  Class B,  Class C and  Class N
shares.  The Funds have no fixed  dividend rates and there can be no guarantee
that either Fund will pay any dividends or distributions.

      Either  Fund  may  realize  capital  gains  on  the  sale  of  portfolio
securities.  If  either  does,  it may  make  distributions  out  of  any  net
short-term  or  long-term  capital  gains in December of each year.  The Funds
may make  supplemental  distributions of dividends and capital gains following
the end of their fiscal years.

                              VOTING INFORMATION

How many votes are necessary to approve the Reorganization Agreement?

      The  affirmative  vote of the holders of a majority  of the  outstanding
voting  securities  (as  defined in the  Investment  Company  Act) of GMG Fund
voting  in the  aggregate  and  not by  class  is  necessary  to  approve  the
Reorganization  Agreement  and  the  transactions   contemplated  thereby.  As
defined  in  the  Investment  Company  Act,  the  vote  of a  majority  of the
outstanding  shares  means  the  vote  of  (1)  67%  or  more  of  GMG  Fund's
outstanding  shares  present at a meeting  if the  holders of more than 50% of
the  outstanding  shares of the Fund are present or represented  by proxy;  or
(2) more than 50% of the Fund's  outstanding  shares,  whichever is less. Each
shareholder  will  be  entitled  to  one  vote  for  each  full  share,  and a
fractional  vote for each  fractional  share  of GMG Fund  held on the  Record
Date.  If  sufficient  votes to approve the  proposal  are not received by the
date  of  the  Meeting,  the  Meeting  may  be  adjourned  to  permit  further
solicitation  of  proxies.  The  holders of a majority  of shares  entitled to
vote at the  Meeting  and  present  in  person  or by  proxy  (whether  or not
sufficient to  constitute a quorum) may adjourn the Meeting to permit  further
solicitation of proxies.

How do I ensure my vote is accurately recorded?

      You can vote in either of three ways:
o     By mail, with the enclosed proxy card.
o     In person at the Meeting.
o     By telephone (please see the insert for instructions).

      A proxy card is, in essence,  a ballot.  If you simply sign and date the
proxy but give no voting  instructions,  your shares will be voted in favor of
the Reorganization Agreement.

      Votes may also be  recorded  by  telephone.  Shareholders  must  enter a
unique  control  number  found  on  their   respective  proxy  ballots  before
providing voting instructions by telephone.  After a shareholder  provides his
or  her  voting  instructions,   those  instructions  are  read  back  to  the
shareholder  and the shareholder  must confirm his or her voting  instructions
before  disconnecting  the  telephone  call.  The  voting  procedures  used in
connection with telephone  voting are designed to reasonably  authenticate the
identity of  shareholders,  to permit  shareholders to authorize the voting of
their shares in accordance with their  instructions  and to confirm that their
instructions have been properly recorded

Can I revoke my proxy?

      Yes.  You may revoke  your  proxy at any time  before it is voted by (i)
writing to the  Secretary  of GMG Fund at 6803 South  Tucson Way,  Centennial,
Colorado  80112 (if received in time to be acted  upon);  (ii)  attending  the
Meeting and voting in person;  or (iii)  signing and  returning a  later-dated
proxy (if returned and received in time to be voted).

What other matters will be voted upon at the Meeting?

      The Board of  Trustees  of GMG Fund does not intend to bring any matters
before the Meeting other than those  described in this proxy.  It is not aware
of any other  matters to be  brought  before  the  Meeting  by others.  If any
other  matters  legally  come before the  Meeting,  the proxy  ballots  confer
discretionary  authority with respect to such matters, and it is the intention
of the  persons  named  as  attorneys-in-fact  to  vote  proxies  to  vote  in
accordance with their judgment in such matters.

Who is entitled to vote?

      Shareholders  of record of GMG Fund at the close of business on June 18,
2003 (the  "record  date") will be entitled  to vote at the  Meeting.  On June
18, 2003, there were __________  outstanding shares of GMG Fund, consisting of
__________  Class A  shares,  _________  Class B  shares,  __________  Class C
shares,  __________  Class N shares and _________ Class Y shares.  On June 18,
2003,  there were _________  outsanding  shares of MidCap Fund,  consisting of
_________  Class A  shares,  _________  Class  B  shares,  __________  Class C
shares,  __________  Class N  shares  and  __________  Class Y  shares.  Under
relevant state law,  proxies  representing  abstentions  and broker  non-votes
will be included  for purposes of  determining  whether a quorum is present at
the  Meeting.  Shares  owned of record by  broker-dealers  for the  benefit of
their customers  ("street account shares") will be voted by the  broker-dealer
based on  instructions  received from its customers.  If no  instructions  are
received,  and the  broker-dealer  does not have  discretionary  power to vote
such street account shares under  applicable  stock exchange rules, the shares
represented  thereby  will be  considered  to be  present at the  Meeting  for
purposes of only determining the quorum ("broker  non-votes").  Because of the
need to obtain the  above-described  vote for the  Reorganization  proposal to
pass,  broker  non-votes  will have the same  effect as a vote  "against"  the
Proposal.  For purposes of the Meeting,  a majority of shares  outstanding and
entitled to vote,  present in person or  represented  by proxy,  constitutes a
quorum.  MidCap Fund shareholders do not vote on the Reorganization.

What other solicitations will be made?

      GMG Fund will  request  broker-dealer  firms,  custodians,  nominees and
fiduciaries to forward proxy  material to the beneficial  owners of the shares
of record,  and may reimburse them for their reasonable  expenses  incurred in
connection  with such proxy  solicitation.  In  addition to  solicitations  by
mail,  officers  of GMG Fund or officers  and  employees  of  OppenheimerFunds
Services,  without extra pay, may conduct additional  solicitations personally
or by  telephone  or  telegraph.  Any  expenses so  incurred  will be borne by
OppenheimerFunds   Services.   Proxies  may  also  be  solicited  by  a  proxy
solicitation  firm hired at GMG Fund's expense.  If a proxy  solicitation firm
is hired,  it is  anticipated  that the cost of engaging a proxy  solicitation
firm  would not exceed  $17,000,  plus the  additional  costs  which  would be
incurred in connection with contacting those  shareholders who have not voted,
in the event of a need for resolicitation of votes.

Are there any appraisal rights?

      No.  Under the 1940 Act,  shareholders  do not have rights of  appraisal
as  a  result  of  the   Reorganization.   Although   appraisal   rights   are
unavailable,  you have the right to  redeem  your  shares  at net asset  value
until the Valuation Date for the  Reorganization.  After the closing date, you
may  redeem  your new  MidCap  Fund  shares or  exchange  them into  shares of
certain other funds in the  OppenheimerFunds  family of mutual funds,  subject
to the terms of the prospectuses of both funds.

      Shares  owned of  record  by  broker-dealers  for the  benefit  of their
customers  ("street account shares") will be voted by the broker-dealer  based
on instructions received from its customers.  If no instructions are received,
and the broker-dealer  does not have  discretionary  power to vote such street
account shares under applicable  stock exchange rules, the shares  represented
thereby will be  considered  to be present at the Meeting for purposes of only
determining the quorum ("broker  non-votes").  Because of the need to obtain a
vote  of  the  majority  of  the   outstanding   voting   securities  for  the
Reorganization  proposal to pass,  abstentions and broker  non-votes will have
the same effect as a vote "against" the Proposal.

                           INFORMATION ABOUT MIDCAP FUND


      Information  about  MidCap  Fund (File no.  811-08297)  is  included  in
MidCap Fund's  Prospectus  dated  December 23, 2002,  which is attached to and
considered  a  part  of  this  Proxy  Statement  and  Prospectus.   Additional
information  about  MidCap  Fund  is  included  in  the  Fund's  Statement  of
Additional  Information  dated  December 23, 2002, and the Annual Report dated
October  31,  2002,  which have been  filed with the SEC and are  incorporated
herein  by  reference.  You may  request a free  copy of these  materials  and
other  information by calling  1.800.708.7780  or by writing to MidCap Fund at
OppenheimerFunds  Services, P.O. Box 5270, Denver, CO 80217-5270.  MidCap Fund
also files  proxy  materials,  reports and other  information  with the SEC in
accordance with the informational  requirements of the Securities and Exchange
Act of 1934 and the 1940 Act.  These  materials  can be  inspected  and copied
at:  the  SEC's   Public   Reference   Room  in   Washington,   D.C.   (Phone:
1.202.942.8090)  or the  EDGAR  database  on the  SEC's  Internet  website  at
www.sec.gov.  Copies may be  obtained  upon  payment of a  duplicating  fee by
electronic  request  at the SEC's  e-mail  address:  publicinfo@sec.gov  or by
writing to the SEC's Public Reference Section, Washington, D.C.  20549-0102.


                             INFORMATION ABOUT GMG FUND


      Information  about GMG Fund  (File no.  811-10153)  is  included  in the
current GMG Fund  Prospectus  dated March 28,  2003,  as  supplemented  May 7,
2003.  This  document has been filed with the SEC and is  incorporated  herein
by reference.  Additional  information  about GMG Fund is also included in the
Fund's  Statement of  Additional  Information  dated March 28,  2003,  and the
Annual  Report dated  November 30, 2002 which have been filed with the SEC and
are  incorporated  herein by  reference.  You may request free copies of these
or other  documents  relating  to GMG  Fund by  calling  1.800.708.7780  or by
writing to  OppenheimerFunds  Services,  P.O. Box 5270, Denver, CO 80217-5270.
Reports and other  information  filed by GMG Fund can be inspected  and copied
at: the SEC's Public  Reference  Room in  www.sec.gov.  Copies may be obtained
upon payment of a duplicating  fee by  electronic  request at the SEC's e-mail
address:  publicinfo@sec.gov  or by  writing  to the  SEC's  Public  Reference
Section, Washington, D.C.  20549-0102.


                               PRINCIPAL SHAREHOLDERS

      As of June 18, 2003,  the officers and Trustees of GMG Fund, as a group,
owned less than 1% of the  outstanding  voting  shares of GMG Fund. As of June
18,  2003,  the only  persons  who owned of record or was known by GMG Fund to
own  beneficially  or of  record  5% or  more  of  any  class  of  the  Fund's
outstanding shares were as follows:

      5% Shareholder information will be updated
      ------------------------------------------

      As of June 18, 2003,  the  officers  and  Trustees of MidCap Fund,  as a
group,  owned less than 1% of the  outstanding  voting  shares of MidCap Fund.
As of June 18,  2003,  the only  persons  who  owned of record or was known by
MidCap  Fund to own  beneficially  or of record 5% or more of any class of the
Fund's outstanding shares were as follows:

      5% Shareholder information will be updated
      ------------------------------------------

By Order of the Board of Trustees

Robert G. Zack, Secretary

July 7, 2003


                Appendix to Prospectus and Proxy Statement of
        Oppenheimer Select Managers Gartmore Millennium Growth Fund II

      Graphic  material  included  in the  Prospectus  of  Oppenheimer  Select
Managers  Gartmore  Millennium  Growth Fund II under the heading "Annual Total
Returns (Class A) (as of 12/31 each year)":

      A bar chart will be included  in the  Prospectus  of the Fund  depicting
the annual total  returns of a  hypothetical  investment  in Class A shares of
the Fund  for the  calendar  year  ended  12/31/02,  without  deducting  sales
charges.  Set forth below is the  relevant  data point that will appear on the
bar chart.


Calendar                            Oppenheimer Select Managers Gartmore
Year                                Millennium Growth Fund II
Ended                               Class A Shares
- -----                               --------------

12/31/02                              -29.45%


                Appendix to Prospectus and Proxy Statement of
                           Oppenheimer MidCap Fund

      Graphic material  included in the Prospectus of Oppenheimer  MidCap Fund
under the heading "Annual Total Returns (Class A) (as of 12/31 each year)":

      A bar chart will be included in the Prospectus of the Fund depicting
the annual total returns of a hypothetical investment in Class A shares of
the Fund for its five most recent calendar years, without deducting sales
charges. Set forth below are the relevant data points that will appear on the
bar chart.

Calendar
Year                                Oppenheimer MidCap Fund
Ended                               Class A Shares
- -----                               --------------

12/31/98                              29.76%
12/31/99                              94.87%
12/31/00                            -10.84%
12/31/01                            -34.13%
12/31/02                            -27.63%


                        EXHIBITS TO THE COMBINED PROXY
                           STATEMENT AND PROSPECTUS

Exhibit
- -------

A  Agreement and Plan of Reorganization between Oppenheimer Select Managers
   Gartmore Millennium Growth Fund II and Oppenheimer MidCap Fund

B  Principal Shareholders


                                                                     EXHIBIT A

                     AGREEMENT AND PLAN OF REORGANIZATION

      AGREEMENT  AND  PLAN OF  REORGANIZATION  (the  "Agreement")  dated as of
April 28, 2003 by and between  Oppenheimer Select Managers Gartmore Millennium
Growth Fund II ("GMG Fund"),  a  Massachusetts  business trust and Oppenheimer
MidCap Fund ("MidCap Fund"), a Massachusetts business trust.

                                 W I T N E S S E T H:

      WHEREAS,  the  parties are each  open-end  investment  companies  of the
management type; and

      WHEREAS,  the parties  hereto  desire to provide for the  reorganization
pursuant  to  Section  368(a)(1)  of the  Internal  Revenue  Code of 1986,  as
amended (the "Code"),  of GMG Fund through the  acquisition  by MidCap Fund of
substantially  all of the assets of GMG Fund in exchange for the voting shares
of  beneficial  interest  ("shares") of Class A, Class B, Class C, Class N and
Class Y shares of MidCap  Fund and the  assumption  by MidCap  Fund of certain
liabilities  of GMG Fund,  for which  Class A,  Class B,  Class C, Class N and
Class Y shares of MidCap  Fund are to be  distributed  by GMG Fund pro rata to
its   shareholders   in  complete   liquidation   of  GMG  Fund  and  complete
cancellation of its shares;

      NOW,   THEREFORE,   in  consideration  of  the  mutual  promises  herein
contained, the parties hereto agree as follows:

   1. The  parties   hereto   hereby   adopt  this   Agreement   and  Plan  of
Reorganization (the "Agreement")  pursuant to Section 368(a)(1) of the Code as
follows:  The  reorganization  will be comprised of the  acquisition by MidCap
Fund of  substantially  all of the assets of GMG Fund in exchange for Class A,
Class  B,  Class  C,  Class N and  Class  Y  shares  of  MidCap  Fund  and the
assumption by MidCap Fund of certain  liabilities of GMG Fund, followed by the
distribution  of such Class A, Class B, Class C, Class N and Class Y shares of
MidCap  Fund  to  the  Class  A,  Class  B,  Class  C,  Class  N and  Class  Y
shareholders  of GMG Fund in  exchange  for their  Class A,  Class B, Class C,
Class N and Class Y shares of GMG Fund,  all upon and  subject to the terms of
the Agreement hereinafter set forth.

      The share transfer  books of GMG Fund will be permanently  closed at the
close of business on the  Valuation  Date (as  hereinafter  defined)  and only
redemption  requests  received  in  proper  form on or prior  to the  close of
business on the  Valuation  Date shall be  fulfilled  by GMG Fund;  redemption
requests  received  by GMG Fund after  that date shall be treated as  requests
for the  redemption  of the  shares of MidCap  Fund to be  distributed  to the
shareholder in question as provided in Section 5 hereof.

   2. On the Closing Date (as hereinafter  defined),  all of the assets of GMG
Fund on that  date,  excluding  a cash  reserve  (the  "cash  reserve")  to be
retained  by GMG Fund  sufficient  in its  discretion  for the  payment of the
expenses of GMG Fund's  dissolution and its liabilities,  but not in excess of
the amount  contemplated  by Section  10E,  shall be  delivered as provided in
Section 8 to MidCap Fund, in exchange for and against  delivery to GMG Fund on
the  Closing  Date of a number of Class A, Class B, Class C, Class N and Class
Y shares of MidCap  Fund,  having an  aggregate  net asset  value equal to the
value of the assets of GMG Fund so transferred and delivered.

   3. The net asset  value of Class A,  Class B,  Class C, Class N and Class Y
shares  of  MidCap  Fund  and  the  value  of the  assets  of GMG  Fund  to be
transferred  shall in each case be  determined  as of the close of business of
The New York Stock Exchange on the Valuation  Date. The computation of the net
asset  value of the Class A,  Class B,  Class C, Class N and Class Y shares of
MidCap  Fund and the Class A,  Class B, Class C, Class N and Class Y shares of
GMG Fund  shall  be done in the  manner  used by  MidCap  Fund  and GMG  Fund,
respectively,  in the  computation  of such net  asset  value per share as set
forth in their  respective  prospectuses.  The methods  used by MidCap Fund in
such  computation  shall be applied to the valuation of the assets of GMG Fund
to be transferred to MidCap Fund.

    GMG Fund shall declare and pay,  immediately  prior to the Valuation Date,
a dividend or dividends  which,  together  with all previous  such  dividends,
shall have the effect of  distributing to GMG Fund's  shareholders  all of GMG
Fund's investment  company taxable income for taxable years ending on or prior
to the Closing Date (computed  without  regard to any dividends  paid) and all
of its net capital gain, if any,  realized in taxable years ending on or prior
to the Closing Date (after reduction for any capital loss carry-forward).

   4. The   closing   (the   "Closing")   shall   be   at   the   offices   of
OppenheimerFunds,  Inc.  (the  "Agent"),  6803 S Tucson  Way,  Centennial,  CO
80112,  on such time or such other place as the parties  may  designate  or as
provided  below (the "Closing  Date").  The business day preceding the Closing
Date is herein referred to as the "Valuation Date."

    In the event that on the Valuation Date either party has,  pursuant to the
Investment  Company  Act of  1940,  as  amended  (the  "Act"),  or  any  rule,
regulation  or order  thereunder,  suspended  the  redemption of its shares or
postponed  payment  therefore,  the Closing Date shall be postponed  until the
first  business  day  after  the date  when  both  parties  have  ceased  such
suspension or postponement;  provided,  however, that if such suspension shall
continue  for a period of 60 days beyond the  Valuation  Date,  then the other
party to the Agreement  shall be permitted to terminate the Agreement  without
liability to either party for such termination.

   5. In  conjunction  with the Closing,  GMG Fund shall  distribute  on a pro
rata basis to the  shareholders  of GMG Fund as of the Valuation Date Class A,
Class B, Class C, Class N and Class Y shares of MidCap  Fund  received  by GMG
Fund on the Closing  Date in  exchange  for the assets of GMG Fund in complete
liquidation  of GMG Fund; for the purpose of the  distribution  by GMG Fund of
Class A, Class B,  Class C,  Class N and Class Y shares of MidCap  Fund to GMG
Fund's  shareholders,  MidCap Fund will promptly  cause its transfer agent to:
(a)  credit an  appropriate  number of Class A,  Class B, Class C, Class N and
Class Y shares of MidCap  Fund on the  books of MidCap  Fund to each  Class A,
Class B,  Class C,  Class N and Class  shareholder  of GMG Fund in  accordance
with a list (the "Shareholder  List") of GMG Fund  shareholders  received from
GMG Fund; and (b) confirm an appropriate  number of Class A, Class B, Class C,
Class N and Class Y shares of MidCap  Fund to each  Class A, Class B, Class C,
Class N and Class Y shareholder of GMG Fund;  certificates  for Class A shares
of MidCap Fund will be issued upon written request of a former  shareholder of
GMG Fund but only for whole shares,  with  fractional  shares  credited to the
name of the  shareholder  on the books of MidCap Fund and only after any share
certificates for GMG Fund are returned to the transfer agent.

    The Shareholder  List shall  indicate,  as of the close of business on the
Valuation  Date,  the  name  and  address  of each  shareholder  of GMG  Fund,
indicating  his  or  her  share  balance.   GMG  Fund  agrees  to  supply  the
Shareholder   List  to  MidCap   Fund  not  later  than  the   Closing   Date.
Shareholders of GMG Fund holding certificates  representing their shares shall
not be required to surrender  their  certificates to anyone in connection with
the  reorganization.  After the Closing  Date,  however,  it will be necessary
for such  shareholders  to surrender  their  certificates  in order to redeem,
transfer or pledge the shares of MidCap Fund which they received.

   6. Within one year after the  Closing  Date,  GMG Fund shall (a) either pay
or make  provision for payment of all of its  liabilities  and taxes,  and (b)
either (i) transfer any  remaining  amount of the cash reserve to MidCap Fund,
if such remaining  amount (as reduced by the estimated cost of distributing it
to  shareholders)  is not material (as defined below) or (ii)  distribute such
remaining  amount to the  shareholders of GMG Fund on the Valuation Date. Such
remaining  amount  shall  be  deemed  to  be  material  if  the  amount  to be
distributed,  after deduction of the estimated  expenses of the  distribution,
equals or exceeds one cent per share of GMG Fund  outstanding on the Valuation
Date.

   7. Prior to the  Closing  Date,  there  shall be  coordination  between the
parties as to their respective  portfolios so that, after the Closing,  MidCap
Fund  will  be  in  compliance  with  all  of  its  investment   policies  and
restrictions.  At the  Closing,  GMG Fund  shall  deliver  to MidCap  Fund two
copies  of a list  setting  forth  the  securities  then  owned  by GMG  Fund.
Promptly  after the  Closing,  GMG Fund shall  provide  to MidCap  Fund a list
setting forth the respective federal income tax bases thereof.

   8. Portfolio  securities or written  evidence  acceptable to MidCap Fund of
record  ownership  thereof by The  Depository  Trust  Company  or through  the
Federal  Reserve  Book Entry  System or any other  depository  approved by GMG
Fund  pursuant  to Rule 17f-4 and Rule 17f-5  under the Act shall be  endorsed
and  delivered,   or   transferred  by  appropriate   transfer  or  assignment
documents,  by  GMG  Fund  on the  Closing  Date  to  MidCap  Fund,  or at its
direction,  to its  custodian  bank,  in  proper  form  for  transfer  in such
condition  as to  constitute  good  delivery  thereof in  accordance  with the
custom of brokers and shall be  accompanied  by all necessary  state  transfer
stamps,  if any. The cash delivered  shall be in the form of certified or bank
cashiers'  checks or by bank wire or intra-bank  transfer payable to the order
of MidCap  Fund for the  account  of MidCap  Fund.  Class A, Class B, Class C,
Class N and Class Y shares of MidCap Fund  representing the number of Class A,
Class B,  Class C, Class N and Class Y shares of MidCap  Fund being  delivered
against the assets of GMG Fund,  registered in the name of GMG Fund,  shall be
transferred  to GMG Fund on the Closing Date.  Such shares shall  thereupon be
assigned  by GMG Fund to its  shareholders  so that the shares of MidCap  Fund
may be distributed as provided in Section 5.

      If, at the Closing Date,  GMG Fund is unable to make delivery under this
Section 8 to MidCap Fund of any of its  portfolio  securities  or cash for the
reason  that  any of  such  securities  purchased  by GMG  Fund,  or the  cash
proceeds of a sale of  portfolio  securities,  prior to the Closing  Date have
not yet been  delivered  to it or GMG  Fund's  custodian,  then  the  delivery
requirements of this Section 8 with respect to said undelivered  securities or
cash will be  waived  and GMG Fund will  deliver  to MidCap  Fund by or on the
Closing  Date with respect to said  undelivered  securities  or cash  executed
copies of an  agreement  or  agreements  of  assignment  in a form  reasonably
satisfactory to MidCap Fund,  together with such other documents,  including a
due bill or due bills and brokers'  confirmation  slips as may  reasonably  be
required by MidCap Fund.

   9. MidCap  Fund shall not  assume the  liabilities  (except  for  portfolio
securities  purchased  which have not settled and for  shareholder  redemption
and  dividend   checks   outstanding)   of  GMG  Fund,   but  GMG  Fund  will,
nevertheless,  use its best efforts to discharge all known liabilities, so far
as may be  possible,  prior to the  Closing  Date.  The cost of  printing  and
mailing the proxies and proxy  statements  will be borne by GMG Fund. GMG Fund
and  MidCap  Fund will bear the cost of their  respective  tax  opinions.  Any
documents  such as existing  prospectuses  or annual reports that are included
in that  mailing will be a cost of the Fund  issuing the  document.  Any other
out-of-pocket  expenses  of  MidCap  Fund and GMG Fund  associated  with  this
reorganization,  including legal, accounting and transfer agent expenses, will
be  borne by GMG  Fund  and  MidCap  Fund,  respectively,  in the  amounts  so
incurred by each.

   10. The  obligations  of MidCap  Fund  hereunder  shall be  subject  to the
following conditions:

    A. The Board of Trustees of GMG Fund shall have  authorized  the execution
of the  Agreement,  and the  shareholders  of GMG Fund shall have approved the
Agreement and the transactions  contemplated  hereby,  and GMG Fund shall have
furnished  to MidCap Fund copies of  resolutions  to that effect  certified by
the  Secretary  or the  Assistant  Secretary  of GMG  Fund;  such  shareholder
approval   shall  have  been  by  the   affirmative   vote   required  by  the
Massachusetts  Law and its charter  documents  at a meeting for which  proxies
have been  solicited by the Proxy  Statement and  Prospectus  (as  hereinafter
defined).

    B. MidCap  Fund shall have  received  an opinion  dated as of the  Closing
Date from  counsel to GMG Fund,  to the effect that (i) GMG Fund is a business
trust duly organized,  validly existing and in good standing under the laws of
the  State  of  Massachusetts  with  full  corporate  powers  to  carry on its
business as then being  conducted and to enter into and perform the Agreement;
and (ii) that all action  necessary  to make the  Agreement,  according to its
terms,   valid,   binding  and  enforceable  on  GMG  Fund  and  to  authorize
effectively the transactions  contemplated by the Agreement have been taken by
GMG Fund.  Massachusetts counsel may be relied upon for this opinion.

    C. The  representations  and warranties of GMG Fund contained herein shall
be true and correct at and as of the Closing Date,  and MidCap Fund shall have
been furnished with a certificate of the President,  or a Vice  President,  or
the  Secretary or the  Assistant  Secretary or the  Treasurer or the Assistant
Treasurer of GMG Fund, dated as of the Closing Date, to that effect.

D.    On the  Closing  Date,  GMG Fund shall have  furnished  to MidCap Fund a
certificate  of the  Treasurer  or  Assistant  Treasurer of GMG Fund as to the
amount of the capital  loss  carry-over  and net  unrealized  appreciation  or
depreciation, if any, with respect to GMG Fund as of the Closing Date.

    E. The cash  reserve  shall not exceed 10% of the value of the net assets,
nor 30% in value of the gross assets,  of GMG Fund at the close of business on
the Valuation Date.
F.    A  Registration  Statement  on Form N-14 filed by MidCap  Fund under the
Securities Act of 1933, as amended (the "1933 Act"),  containing a preliminary
form of the Proxy Statement and Prospectus,  shall have become effective under
the 1933 Act.

    G. On the  Closing  Date,  MidCap  Fund shall have  received a letter from
Robert G. Zack or other senior  executive  officer of  OppenheimerFunds,  Inc.
acceptable  to  MidCap  Fund,  stating  that  nothing  has  come to his or her
attention  which in his or her judgment  would indicate that as of the Closing
Date there were any  material,  actual or contingent  liabilities  of GMG Fund
arising out of litigation  brought against GMG Fund or claims asserted against
it, or pending  or to the best of his or her  knowledge  threatened  claims or
litigation  not  reflected  in  or  apparent  from  the  most  recent  audited
financial  statements  and footnotes  thereto of GMG Fund  delivered to MidCap
Fund.  Such letter may also include  such  additional  statements  relating to
the  scope  of  the  review   conducted   by  such   person  and  his  or  her
responsibilities   and   liabilities  as  are  not   unreasonable   under  the
circumstances.

     H.  MidCap Fund shall have  received  an  opinion,  dated as of the Closing
Date, of Deloitte & Touche LLP (or an appropriate substitute tax expert), to
the same effect as the opinion contemplated by Section 11.E. of the Agreement.

I.    MidCap Fund shall have  received at the Closing all of the assets of GMG
Fund to be conveyed  hereunder,  which  assets  shall be free and clear of all
liens,   encumbrances,   security  interests,   restrictions  and  limitations
whatsoever.

   11.      The  obligations  of GMG Fund  hereunder  shall be  subject to the
following conditions:

    A. The  Board of  Trustees  of  MidCap  Fund  shall  have  authorized  the
execution of the Agreement,  and the transactions  contemplated  thereby,  and
MidCap Fund shall have  furnished  to GMG Fund copies of  resolutions  to that
effect certified by the Secretary or the Assistant Secretary of MidCap Fund.

    B. GMG Fund's  shareholders  shall have  approved  the  Agreement  and the
transactions  contemplated  hereby,  by an  affirmative  vote  required by the
Massachusetts  Law and its charter documents and GMG Fund shall have furnished
MidCap Fund copies of  resolutions  to that effect  certified by the Secretary
or an Assistant Secretary of GMG Fund.

C.    GMG Fund shall have  received an opinion  dated as of the  Closing  Date
from counsel to MidCap Fund,  to the effect that (i) MidCap Fund is a business
trust duly organized,  validly existing and in good standing under the laws of
the  Commonwealth of  Massachusetts  with full powers to carry on its business
as then being conducted and to enter into and perform the Agreement;  (ii) all
actions  necessary  to make the  Agreement,  according  to its  terms,  valid,
binding and  enforceable  upon MidCap Fund and to  authorize  effectively  the
transactions  contemplated  by the  Agreement  have been taken by MidCap Fund;
and  (iii)  the  shares  of  MidCap  Fund  to be  issued  hereunder  are  duly
authorized   and  when  issued  will  be  validly   issued,   fully-paid   and
non-assessable,  except as set forth under "Shareholder and Trustee Liability"
in MidCap Fund's Statement of Additional  Information.  Massachusetts  counsel
may be relied upon for this opinion.

    D. The  representations  and  warranties of MidCap Fund  contained  herein
shall be true and  correct at and as of the Closing  Date,  and GMG Fund shall
have been furnished  with a certificate of the President,  a Vice President or
the  Secretary or the  Assistant  Secretary or the  Treasurer or the Assistant
Treasurer of the Trust to that effect dated as of the Closing Date.

     E. GMG Fund shall have received an opinion of Deloitte &  Touche LLP to
the effect that the federal tax consequences of the transaction,  if carried out
in the manner  outlined in the Agreement  and in accordance  with (i) GMG Fund's
representation  that there is no plan or intention  by any GMG Fund  shareholder
who owns 5% or more of GMG Fund's  outstanding  shares,  and, to GMG Fund's best
knowledge,  there is no plan or intention on the part of the  remaining GMG Fund
shareholders,  to redeem,  sell,  exchange or  otherwise  dispose of a number of
MidCap  Fund  shares  received  in the  transaction  that would  reduce GMG Fund
shareholders'  ownership  of MidCap Fund  shares to a number of shares  having a
value,  as of the  Closing  Date,  of less  than 50% of the  value of all of the
formerly  outstanding  GMG  Fund  shares  as of the  same  date,  and  (ii)  the
representation by each of GMG Fund and MidCap Fund that, as of the Closing Date,
GMG Fund and MidCap Fund will qualify as regulated  investment companies or will
meet the diversification  test of Section  368(a)(2)(F)(ii) of the Code, will be
as follows:

1.    The  transactions  contemplated  by  the  Agreement  will  qualify  as a
tax-free  "reorganization"  within the  meaning of  Section  368(a)(1)  of the
Code, and under the regulations promulgated thereunder.

         2. GMG Fund and  MidCap  Fund  will  each  qualify  as a "party  to a
reorganization" within the meaning of Section 368(b)(2) of the Code.

         3. No gain or loss  will be  recognized  by the  shareholders  of GMG
Fund upon the  distribution of Class A, Class B, Class N and Class Y shares of
beneficial  interest in MidCap Fund to the  shareholders  of GMG Fund pursuant
to Section 354 of the Code.

         4. Under  Section  361(a)  of the  Code  no  gain  or  loss  will  be
recognized  by GMG Fund by reason of the  transfer  of  substantially  all its
assets in  exchange  for Class A, Class B, Class C, Class N and Class Y shares
of MidCap Fund.

         5. Under  Section 1032 of the Code no gain or loss will be recognized
by MidCap Fund by reason of the  transfer of  substantially  all of GMG Fund's
assets in  exchange  for Class A, Class B, Class C, Class N and Class Y shares
of MidCap Fund and MidCap  Fund's  assumption  of certain  liabilities  of GMG
Fund.

         6. The  shareholders  of GMG Fund  will  have the same tax  basis and
holding  period  for the Class A, Class B, Class C, Class N and Class Y shares
of  beneficial  interest in MidCap Fund that they  receive as they had for GMG
Fund  shares  that they  previously  held,  pursuant  to  Section  358(a)  and
1223(1), respectively, of the Code.

         7. The  securities  transferred  by GMG Fund to MidCap Fund will have
the same tax basis and holding  period in the hands of MidCap Fund as they had
for GMG Fund,  pursuant to Section  362(b) and 1223(1),  respectively,  of the
Code.

      F. The  cash  reserve  shall  not  exceed  10% of the  value  of the net
assets,  nor 30% in value of the  gross  assets,  of GMG Fund at the  close of
business on the Valuation Date.

      G. A Registration  Statement on Form N-14 filed by MidCap Fund under the
1933  Act,   containing  a  preliminary   form  of  the  Proxy  Statement  and
Prospectus, shall have become effective under the 1933 Act.

      H. On the  Closing  Date,  GMG Fund  shall have  received a letter  from
Robert G. Zack or other senior  executive  officer of  OppenheimerFunds,  Inc.
acceptable to GMG Fund,  stating that nothing has come to his or her attention
which in his or her judgment  would indicate that as of the Closing Date there
were any  material,  actual or contingent  liabilities  of MidCap Fund arising
out of litigation  brought against MidCap Fund or claims asserted  against it,
or  pending  or,  to the best of his or her  knowledge,  threatened  claims or
litigation not reflected in or apparent by the most recent  audited  financial
statements and footnotes  thereto of MidCap Fund  delivered to GMG Fund.  Such
letter may also include such  additional  statements  relating to the scope of
the  review  conducted  by such  person  and his or her  responsibilities  and
liabilities as are not unreasonable under the circumstances.

I.    GMG Fund  shall  acknowledge  receipt  of the Class A, Class B, Class C,
Class N and Class Y shares of MidCap Fund.

   12.      GMG Fund hereby represents and warrants that:

      A. The audited financial  statements of GMG Fund as of November 30, 2002
and unaudited financial  statements as of May 31, 2003 heretofore furnished to
MidCap Fund,  present  fairly the financial  position,  results of operations,
and  changes  in net assets of GMG Fund as of that date,  in  conformity  with
generally  accepted  accounting  principles applied on a basis consistent with
the preceding  year;  and that from May 31, 2003 through the date hereof there
have not been,  and through the Closing  Date there will not be, any  material
adverse  change in the business or financial  condition of GMG Fund,  it being
agreed  that a  decrease  in the size of GMG Fund due to a  diminution  in the
value  of  its  portfolio  and/or  redemption  of  its  shares  shall  not  be
considered a material adverse change;

B.    Contingent   upon  approval  of  the  Agreement  and  the   transactions
contemplated  thereby by GMG Fund's  shareholders,  GMG Fund has  authority to
transfer  all of the  assets  of GMG Fund to be  conveyed  hereunder  free and
clear  of  all  liens,  encumbrances,  security  interests,  restrictions  and
limitations whatsoever;

C.    The  Prospectus,  as amended and  supplemented,  contained in GMG Fund's
Registration  Statement under the 1933 Act, as amended,  is true,  correct and
complete,  conforms to the  requirements  of the 1933 Act and does not contain
any  untrue  statement  of a material  fact or omit to state a  material  fact
required to be stated therein or necessary to make the statements  therein not
misleading.  The Registration  Statement,  as amended,  was, as of the date of
the filing of the last Post-Effective  Amendment,  true, correct and complete,
conformed to the  requirements  of the 1933 Act and did not contain any untrue
statement of a material  fact or omit to state a material  fact required to be
stated therein or necessary to make the statements therein not misleading;

      D. There  is no  material  contingent  liability  of  GMG  Fund  and  no
material  claim and no material  legal,  administrative  or other  proceedings
pending or, to the  knowledge of GMG Fund,  threatened  against GMG Fund,  not
reflected in such Prospectus;

      E. Except  for  the   Agreement,   there  are  no   material   contracts
outstanding  to which GMG Fund is a party  other  than those  ordinary  in the
conduct of its business;

      F. GMG Fund is a Massachusetts  business trust duly  organized,  validly
existing and in good  standing  under the laws of the State of  Massachusetts;
and has all necessary  and material  Federal and state  authorizations  to own
all of its assets and to carry on its  business  as now being  conducted;  and
GMG Fund is duly registered  under the Act and such  registration has not been
rescinded or revoked and is in full force and effect;

      G. All federal  and other tax  returns and reports of GMG Fund  required
by law to be filed have been filed,  and all federal and other taxes shown due
on said returns and reports  have been paid or provision  shall have been made
for the payment  thereof and to the best of the  knowledge of GMG Fund no such
return is  currently  under audit and no  assessment  has been  asserted  with
respect to such returns; and

      H. GMG  Fund  has  elected  that  GMG  Fund be  treated  as a  regulated
investment  company and, for each fiscal year of its operations,  GMG Fund has
met the  requirements  of  Subchapter  M of the  Code  for  qualification  and
treatment as a regulated  investment company and GMG Fund intends to meet such
requirements with respect to its current taxable year.

13.   MidCap Fund hereby represents and warrants that:

A.    The audited  financial  statements of MidCap Fund as of October 31, 2002
and unaudited financial  statements as of April 30, 2003 heretofore  furnished
to GMG Fund,  present  fairly the financial  position,  results of operations,
and changes in net assets of MidCap Fund, as of that date, in conformity  with
generally  accepted  accounting  principles applied on a basis consistent with
the  preceding  year;  and that from April 30,  2003  through  the date hereof
there  have not been,  and  through  the  Closing  Date there will not be, any
material  adverse  changes in the  business or  financial  condition of MidCap
Fund, it being  understood that a decrease in the size of MidCap Fund due to a
diminution  in the value of its  portfolio  and/or  redemption  of its  shares
shall not be considered a material or adverse change;

B.    The Prospectus, as amended and supplemented,  contained in MidCap Fund's
Registration  Statement  under the 1933 Act, is true,  correct  and  complete,
conforms to the  requirements  of the 1933 Act and does not contain any untrue
statement of a material  fact or omit to state a material  fact required to be
stated  therein or necessary to make the  statements  therein not  misleading.
The Registration  Statement,  as amended, was, as of the date of the filing of
the last Post-Effective  Amendment,  true, correct and complete,  conformed to
the  requirements of the 1933 Act and did not contain any untrue  statement of
a  material  fact or omit to  state a  material  fact  required  to be  stated
therein or necessary to make the statements therein not misleading;

      C. Except for this Agreement,  there is no material contingent liability
of MidCap Fund and no material claim and no material legal,  administrative or
other  proceedings  pending or, to the  knowledge of MidCap  Fund,  threatened
against MidCap Fund, not reflected in such Prospectus;

      D. There are no material  contracts  outstanding to which MidCap Fund is
a party other than those ordinary in the conduct of its business;

     E. MidCap Fund is a business trust duly organized,  validly existing and in
good standing under the laws of the Commonwealth of  Massachusetts;  MidCap Fund
has all necessary and material federal and state  authorizations  to own all its
properties and assets and to carry on its business as now being  conducted;  the
Class A, Class B,  Class C,  Class N and Class Y shares of MidCap  Fund which it
issues to GMG Fund pursuant to the Agreement  will be duly  authorized,  validly
issued,  fully-paid and  non-assessable,  except as set forth under "Shareholder
& Trustee  Liability" in MidCap Fund's Statement of Additional  Information,
will conform to the description  thereof contained in MidCap Fund's Registration
Statement and will be duly registered under the 1933 Act and in the states where
registration is required;  and MidCap Fund is duly registered  under the Act and
such  registration  has not been revoked or  rescinded  and is in full force and
effect;

      F. All  federal  and other  tax  returns  and  reports  of  MidCap  Fund
required by law to be filed have been  filed,  and all federal and other taxes
shown due on said returns and reports  have been paid or provision  shall have
been made for the payment  thereof and to the best of the  knowledge of MidCap
Fund,  no such  return is  currently  under audit and no  assessment  has been
asserted  with respect to such returns and to the extent such tax returns with
respect to the  taxable  year of MidCap  Fund ended  October 31, 2002 have not
been filed,  such  returns  will be filed when  required and the amount of tax
shown as due thereon shall be paid when due;

      G. MidCap  Fund has  elected  to be treated  as a  regulated  investment
company and, for each fiscal year of its  operations,  MidCap Fund has met the
requirements of Subchapter M of the Code for  qualification and treatment as a
regulated   investment   company  and  MidCap   Fund   intends  to  meet  such
requirements with respect to its current taxable year;

      H.  MidCap  Fund has no plan or  intention  (i) to dispose of any of the
assets  transferred  by GMG  Fund,  other  than  in  the  ordinary  course  of
business,  or (ii) to redeem or  reacquire  any of the Class A, Class B, Class
C, Class N and Class Y shares  issued by it in the  reorganization  other than
pursuant to valid requests of shareholders; and

      I. After   consummation   of  the   transactions   contemplated  by  the
Agreement,  MidCap  Fund  intends to operate its  business in a  substantially
unchanged manner.

   14.       Each  party  hereby  represents  to the  other  that no broker or
finder  has  been  employed  by it  with  respect  to  the  Agreement  or  the
transactions  contemplated  hereby. Each party also represents and warrants to
the  other  that the  information  concerning  it in the Proxy  Statement  and
Prospectus will not as of its date contain any untrue  statement of a material
fact or omit to state a fact  necessary to make the  statements  concerning it
therein not  misleading and that the financial  statements  concerning it will
present the  information  shown fairly in accordance  with generally  accepted
accounting  principles  applied on a basis consistent with the preceding year.
Each party also  represents  and  warrants to the other that the  Agreement is
valid,  binding  and  enforceable  in  accordance  with its terms and that the
execution,  delivery and  performance  of the Agreement will not result in any
violation of, or be in conflict with,  any provision of any charter,  by-laws,
contract,  agreement,  judgment,  decree or order to which it is subject or to
which it is a party.  MidCap Fund hereby  represents to and covenants with GMG
Fund that, if the  reorganization  becomes  effective,  MidCap Fund will treat
each  shareholder  of GMG Fund who received any of MidCap  Fund's  shares as a
result of the  reorganization  as having made the minimum initial  purchase of
shares of MidCap Fund received by such  shareholder  for the purpose of making
additional  investments  in shares of MidCap Fund,  regardless of the value of
the shares of MidCap Fund received.

   15.       MidCap Fund agrees that it will  prepare and file a  Registration
Statement  on Form N-14 under the 1933 Act which shall  contain a  preliminary
form of proxy  statement  and  prospectus  contemplated  by Rule 145 under the
1933 Act. The final form of such proxy  statement  and  prospectus is referred
to in the  Agreement  as the  "Proxy  Statement  and  Prospectus."  Each party
agrees that it will use its best efforts to have such  Registration  Statement
declared  effective  and to supply  such  information  concerning  itself  for
inclusion  in the  Proxy  Statement  and  Prospectus  as may be  necessary  or
desirable in this  connection.  GMG Fund covenants and agrees to liquidate and
dissolve under the laws of the State of Massachusetts,  following the Closing,
and, upon Closing, to cause the cancellation of its outstanding shares.

   16.       The  obligations  of the parties shall be subject to the right of
either party to abandon and  terminate  the Agreement for any reason and there
shall be no liability for damages or other  recourse  available to a party not
so terminating  this Agreement,  provided,  however,  that in the event that a
party shall terminate this Agreement  without  reasonable  cause, the party so
terminating  shall,  upon demand,  reimburse the party not so terminating  for
all expenses,  including reasonable  out-of-pocket  expenses and fees incurred
in connection with this Agreement.

   17.       The  Agreement may be executed in several  counterparts,  each of
which shall be deemed an original,  but all taken  together  shall  constitute
one  Agreement.  The rights and  obligations  of each  party  pursuant  to the
Agreement shall not be assignable.

   18.       All prior or contemporaneous  agreements and  representations are
merged into the Agreement,  which  constitutes the entire contract between the
parties  hereto.  No  amendment or  modification  hereof shall be of any force
and effect  unless in writing  and signed by the parties and no party shall be
deemed to have waived any provision  herein for its benefit unless it executes
a written acknowledgment of such waiver.

   19.      MidCap Fund  understands  that the  obligations  of GMG Fund under
the  Agreement  are not binding  upon any Trustee or  shareholder  of GMG Fund
personally,  but  bind  only GMG Fund and GMG  Fund's  property.  MidCap  Fund
represents  that it has notice of the  provisions of the  Declaration of Trust
of GMG  Fund  disclaiming  shareholder  and  trustee  liability  for  acts  or
obligations of GMG Fund.

   20.      GMG Fund  understands  that the  obligations  of MidCap Fund under
the Agreement are not binding upon any trustee or  shareholder  of MidCap Fund
personally,  but bind only MidCap Fund and MidCap  Fund's  property.  GMG Fund
represents  that it has notice of the  provisions of the  Declaration of Trust
of MidCap  Fund  disclaiming  shareholder  and trustee  liability  for acts or
obligations of MidCap Fund.

    IN WITNESS  WHEREOF,  each of the parties has caused the  Agreement  to be
executed and attested by its officers  thereunto  duly  authorized on the date
first set forth above.

                                                OPPENHEIMER SELECT MANAGERS
                                                GARTMORE MILLENNIUM GROWTH
                                                FUND II


                                                By:   ______________________
                                                      Robert G. Zack
                                                      Vice    President    and
                                                Secretary

                                                OPPENHEIMER  MIDCAP FUND


                                                By:   ______________________
                                                      Robert G. Zack
                                                      Secretary






                                                                     EXHIBIT B

                            PRINCIPAL SHAREHOLDERS

A.    Major Shareholders of MidCap Fund.  As of June 18, 2003, the only
   persons who owned of record or who were known by MidCap Fund to own
   beneficially 5% or more of any class of that Fund's outstanding shares,
   and their holdings of that class as of that date, were the following:

                                    [TBS]

   B. Major Shareholders of GMG Fund.  As of June 18, 2003, the only persons
   who owned of record or who were known by GMG Fund to own beneficially 5%
   or more of any class of that Fund's outstanding shares, and their holdings
   of that class as of that date, were the following:

                                    [TBS]


                     STATEMENT OF ADDITIONAL INFORMATION

                      TO PROSPECTUS AND PROXY STATEMENT

                                    PART B

                       Acquisition of the Assets of the
        OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

                     By and in exchange for Shares of the
                           OPPENHEIMER MIDCAP FUND

      This Statement of Additional  Information  to this  Prospectus and Proxy
Statement  (the  "SAI")  relates  specifically  to the  proposed  delivery  of
substantially  all of the  assets  of  Oppenheimer  Select  Managers  Gartmore
Millennium  Growth Fund II ("GMG Fund") for shares of Oppenheimer  MidCap Fund
("MidCap Fund").


      This SAI consists of this Cover Page and the  following  documents:  (i)
audited financial  statements for the 12-month period ended November 30, 2002,
and financial  statements  (to be filed upon  availability)  for the six-month
period ended May 31, 2003,  respectively of GMG Fund;  (ii) audited  financial
statements  for the 12-month  period ended  October 31,  2002,  and  financial
statements  for the  six-month  period ended April 30, 2003,  respectively  of
MidCap  Fund;  (iii) the  Prospectus  of GMG Fund  dated  March 28,  2003,  as
supplemented  May 7, 2003 (iv) the Statement of Additional  Information of GMG
Fund dated March 28, 2003; and (v) the Statement of Additional  Information of
MidCap Fund dated December 23, 2002, as supplemented February 11, 2003.


      This SAI is not a  Prospectus;  you should read this SAI in  conjunction
with the Prospectus and Proxy  Statement  dated July 7, 2003,  relating to the
above-referenced  transaction.  You can request a copy of the  Prospectus  and
Proxy  Statement  by calling  1.800.708.7780  or by  writing  OppenheimerFunds
Services at P.O. Box 5270,  Denver,  Colorado  80217.  The date of this SAI is
July 7, 2003.

                           OPPENHEIMER MIDCAP FUND
                                  FORM N-14

                                    PART C

                              OTHER INFORMATION


Item 15.  Indemnification
- -------------------------

      Reference is made to the provisions of Article  Seventh of  Registrant's
Amended  and  Restated  Declaration  of  Trust,  filed by  cross-reference  to
Exhibit  16(1) to this  Registration  Statement,  and  incorporated  herein by
reference.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of
Registrant pursuant to the foregoing provisions or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable.  In the event that a claim for
indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be governed
by the final adjudication of such issue.

                              Item 16. Exhibits

          (1)     Amended and Restated  Declaration of Trust dated December 5,
    2002:   Previously   filed  with   Post-Effective   Amendment   No.  8  to
    Registrant's registration statement,  (Reg. No. 333-31533),  12/19/02, and
    incorporated herein by reference.

(2)   By-Laws  dated  6/18/97:  Previously  filed  with  Registrant's  Initial
      registration  statement (Reg. No. 333-31533),  7/18/97, and incorporated
      herein by reference.

(3)   N/A

          (4)     Agreement and Plan of Reorganization:  See Exhibit A to Part
    A of the Registration  Statement:  Filed herewith.

(5)   (i)  Specimen  Class  A  Share   Certificate:   Previously   filed  with
      Registrant's  Initial  Registration  Statement,  (Reg.  No.  333-31533),
      7/18/97, and incorporated herein by reference.

    (ii)  Specimen   Class  B  Share   Certificate:   Previously   filed  with
    Registrant's  Initial  Registration   Statement,   (Reg.  No.  333-31533),
    7/18/97, and incorporated herein by reference.

    (iii)  Specimen  Class  C  Share   Certificate:   Previously   filed  with
    Registrant's  Initial  Registration   Statement,   (Reg.  No.  333-31533),
    7/18/97, and incorporated herein by reference.

    (iv)  Specimen   Class  N  Share   Certificate:   Previously   filed  with
    Registrant's   Post-Effective  Amendment  No.  5,  (Reg.  No.  333-31533),
    12/6/00, and incorporated herein by reference.

    (v)   Specimen   Class  Y  Share   Certificate:   Previously   filed  with
    Registrant's  Initial  Registration   Statement,   (Reg.  No.  333-31533),
    7/18/97, and incorporated herein by reference.

          (6)     Investment  Advisory  Agreement dated  11/17/97:  Previously
    filed  with   Registrant's   Pre-Effective   Amendment  No.  2  (Reg.  No.
    333-31533), 11/3/97, and incorporated herein by reference.

(7)   (i) General  Distributor's  Agreement dated 11/17/97,  Previously  filed
      with Registrant's  Pre-Effective  Amendment No. 2 (Reg. No.  333-31533),
      11/3/97, and incorporated herein by reference.

      (ii)  Form of Dealer Agreement of OppenheimerFunds Distributor, Inc.:
      Previously filed with Post-Effective Amendment No. 45 to the
      Registration Statement of Oppenheimer High Yield Fund (Reg. No.
      2-62076), 10/26/01, and incorporated herein by reference.

      (iii)  Form of Broker Agreement of OppenheimerFunds Distributor, Inc.:
      Previously filed with Post-Effective Amendment No. 45 to the
      Registration Statement of Oppenheimer High Yield Fund (Reg. No.
      2-62076), 10/26/01, and incorporated herein by reference.

      (iv)  Form of Agency Agreement of OppenheimerFunds Distributor, Inc.:
      Previously filed with Post-Effective Amendment No. 45 to the
      Registration Statement of Oppenheimer High Yield Fund (Reg. No.
      2-62076), 10/26/01, and incorporated herein by reference.

      (v)  Form of Trust Company Fund/SERV Purchase Agreement of
      OppenheimerFunds Distributor, Inc.: Previously filed with
      Post-Effective Amendment No. 45 to the Registration Statement of
      Oppenheimer High Yield Fund (Reg. No. 2-62076), 10/26/01, and
      incorporated herein by reference.

      (vi)  Form of Trust Company Agency Agreement of OppenheimerFunds
      Distributor, Inc.: Previously filed with Post-Effective Amendment No.
      45 to the Registration Statement of Oppenheimer High Yield Fund (Reg.
      No. 2-62076), 10/26/01, and incorporated herein by reference.

(8)   Form of Deferred Compensation Plans for Disinterested
Trustees/Directors:

      Form    of    Deferred     Compensation     Plan    for    Disinterested
      Trustees/Directors:  Previously filed with Post-Effective  Amendment No.
      43 to the  Registration  Statement of Oppenheimer  Quest For Value Funds
      (Reg. No. 333-31533), 12/21/98, and incorporated herein by reference.

(9) (i)  Amendment  dated  August 28,  2002 to the Global  Custodial  Services
      Agreement  dated May 3, 2001  between  Registrant  and  Citibank,  N.A.:
      Previously   filed  with   Post-Effective   Amendment   No.  29  to  the
      Registration  Statement of Oppenheimer Discovery Fund (Reg. No. 33-371),
      11/22/02, and incorporated herein by reference.

      (ii)  Global  Custodial  Services  Agreement  dated May 3, 2001  between
      Registrant  and Citibank,  N.A.:  Previously  filed with  Post-Effective
      Amendment  No. 33 to the  Registration  Statement  of  Centennial  Money
      Market Trust (Reg. No. 2-65245),  10/25/01,  and incorporated  herein by
      reference

(10)  (i)  Service  Plan and  Agreement  for  Class A shares  dated  11/17/97:
      Previously filed with Registrant's  Pre-Effective  Amendment No. 2 (Reg.
      No. 333-31533), 11/3/97, and incorporated herein by reference.

         (ii)  Amended  and  Restated   Distribution   and  Service  Plan  and
         Agreement  for Class B shares  dated  2/3/98:  Previously  filed with
         Registrant's  Post-Effective  Amendment No. 1 (Reg.  No.  333-31533),
         5/11/98, and incorporated herein by reference.

      (iii)  Amended and  Restated  Distribution  and Service  Plan and  Agreement
    for  Class  C  shares  dated  2/3/98:   Previously  filed  with   Registrant's
    Post-Effective   Amendment  No.  1  (Reg.   No.   333-31533),   5/11/98,   and
    incorporated herein by reference.

      (iv)  Form of  Distribution  and  Service  Plan and  Agreement  for  Class N
    shares:  Previously filed with  Registrant's  Post-Effective  Amendment No. 5,
    12/6/00 and incorporated herein by reference.

(11)  Opinion and Consent of Counsel:  Draft Opinion of Mayer,  Brown,  Rowe &
         Maw: Filed herewith.

   (12)  Tax  Opinion  Relating  to the  Reorganization:  Draft Tax Opinion of
         Deloitte and Touche LLP: Filed herewith.

   (13)  N/A.

(14)  (i)  Consent of Deloitte and Touche LLP: To be filed by Amendment.

         (ii)  Consent of KPMG LLP: To be filed by Amendment.

   (15)  N/A.

   (16)  (i) Power of Attorney  (including  Certified  Board  resolution)  for
         Robert G. Galli:  Previously filed with Post-Effective  Amendment No.
         43 to the  Registration  Statement  of  Oppenheimer  Quest  For Value
         Funds (Reg.  No.  33-15489),  12/21/98,  and  incorporated  herein by
         reference.

         (ii) Power of Attorney for Brian W. Wixted: Previously filed with
         Post-Effective Amendment No. 5 to the Registration Statement of
         Oppenheimer Quest Capital Value Fund, Inc., (Reg. No. 333-16881),
         2/22/00, and incorporated herein by reference.

         (iii)  Powers  of  Attorney  for  Brian  Wruble  and John V.  Murphy:
         Previously  filed  with  Post  Effective  Amendment  No.  49  to  the
         Registration  Statement of Oppenheimer  Quest Value Fund, Inc., (Reg.
         2-65223), 2/26/02, and incorporated herein by reference.

Item 17.  Undertakings
- ----------------------

(1)   N/A.

   (2)      N/A.

   (3) The undersigned  registrant agrees to file a final tax opinion relating
      to the Reorganization within a reasonable time within the Closing Date.

   (4) Insofar as  indemnification  for liability arising under the Securities
      Act of 1933 may be permitted  to  directors,  officers  and  controlling
      persons of the  registrant  pursuant  to the  foregoing  provisions,  or
      otherwise,  the  registrant  has been advised that in the opinion of the
      Securities  and  Exchange  Commission  such  indemnification  is against
      public policy as expressed in the Act and is, therefore,  unenforceable.
      In the event that a claim for  indemnification  against such liabilities
      (other than the payment by the  registrant of expenses  incurred or paid
      by a director,  officer or  controlling  person of the registrant in the
      successful  defense of any action,  suit or  proceeding)  is asserted by
      such  director,  officer or  controlling  person in connection  with the
      securities being registered,  the registrant will, unless in the opinion
      of its counsel  the matter has been  settled by  controlling  precedent,
      submit to a court of appropriate  jurisdiction the question whether such
      indemnification  by it is against  public policy as expressed in the Act
      and will be governed by the final adjudication of such issue.

                                   SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and/or the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of New York on
the 19 day of June, 2003.

                        OPPENHEIMER MIDCAP FUND

                        By:  /s/ John V. Murphy*
                        -------------------------------------------
                        John V. Murphy, President &
                        Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities on
the dates indicated:

Signatures                   Title                       Date
- ----------                   -----                       ----

/s/ Thomas W. Courtney*      Chairman of the             June 19, 2003
- -----------------------------Board of Trustees
Thomas W. Courtney

/s/ John V. Murphy*          President & Principal
- ---------------------------- Executive Officer
                                                        June 19, 2003
John V. Murphy

/s/ Brian W. Wixted*         Treasurer and Chief
- --------------------------   Financial and               June 19, 2003
Brian W. Wixted              Accounting Officer

/s/ Paul Y. Clinton*         Trustee                     June 19, 2003
- -----------------------
Paul Y. Clinton

/s/ Robert G. Galli*
- ------------------------     Trustee                     June 19, 2003
Robert G. Galli

/s/ Lacy B. Herrmann*        Trustee                     June 19, 2003
- ---------------------------
Lacy B. Herrmann

/s/ Brian Wruble*            Trustee                     June 19, 2003
- ---------------------
Brian Wruble

*By: /s/ Robert G. Zack
- -----------------------------------------                June 19, 2003
Robert G. Zack, Attorney-in-Fact

                           OPPENHEIMER MIDCAP FUND

                                EXHIBIT INDEX



Exhibit No.                         Description
- -----------                         -----------

16(11)                  Draft Opinion and Consent of Counsel

16(12)                  Draft Tax Opinion Relating to Reorganization

EX-99

                           OPPENHEIMER SELECT MANAGERS
                       Supplement dated May 7, 2003 to the
                         Prospectus dated March 28, 2003

The Prospectus is changed as follows:

1.    The following  paragraph is added to the end of the section  captioned "How
   the Fund is Managed" on Page 55:

At a recent meeting,  the Board of Trustees of the Funds  determined (i) that it
is in the best interest of the  shareholders of OSM - Mercury  Advisors  S&P
500 Index Fund that the OSM - Mercury Advisors S&P 500 Index Fund reorganize
into  Oppenheimer  Main Street Fund(R),  (ii) that it is in the best interest of
the  shareholders of OSM - Mercury Advisors Focus Growth Fund that OSM - Mercury
Advisors Focus Growth Fund reorganize into  Oppenheimer  Growth Fund, (iii) that
it is in the best interest of shareholders of OSM - QM Active Balanced Fund that
OSM - QM Active Balanced Fund reorganize into  Oppenheimer  Multiple  Strategies
Fund,  (iv) that it is in the best  interest of  shareholders  of OSM - Jennison
Growth Fund that OSM - Jennison Growth Fund reorganize into  Oppenheimer  Growth
Fund, (v) that it is in the best interest of the  shareholders  of OSM - Salomon
Brothers All Cap Fund that OSM - Salomon  Brothers All Cap Fund  reorganize into
Oppenheimer  Value Fund and (vi) that it is the best interest of shareholders of
OSM - Gartmore  Millennium Growth Fund II that OSM - Gartmore  Millennium Growth
Fund II reorganize into Oppenheimer MidCap Fund. The Board unanimously  approved
an  agreement  and  plan  of  reorganization  for  each  of the  reorganizations
described above to be entered into between each Oppenheimer  Select Manager fund
and  the  respective  acquiring  fund  (the   "reorganization   plan")  and  the
transactions  contemplated  thereby (the  "reorganization").  The Board  further
determined  that  the   reorganizations   should  be  submitted  to  the  Funds'
shareholders  for  approval,  and  recommended  that  shareholders  approve  the
reorganizations.  Shareholders  of record as of a date to be  determined  by the
Board will be entitled to vote on the  reorganization and will receive the proxy
statement describing the reorganizations.  The date for the shareholder meeting,
the record  date for such  meeting  and such  other  information  necessary  for
shareholders  to make a decision on the proposed merger will be set forth in the
proxy statement.

2.  Subject  to  approval  by the  Funds'  shareholders,  concurrently  with the
reorganization of OSM - Mercury Advisors S&P 500 Index Fund into Oppenheimer
Main Street Fund(R),  OSM - Mercury  Advisors Focus Growth Fund into Oppenheimer
Growth Fund, OSM - QM Active Balanced Fund into Oppenheimer  Multiple Strategies
Fund,  OSM - Jennison  Growth Fund into  Oppenheimer  Growth Fund, OSM - Salomon
Brothers All Cap Fund into Oppenheimer Value Fund and OSM - Gartmore  Millennium
Growth Fund II into Oppenheimer MidCap Fund, Oppenheimer Select Managers will no
longer exist.


May 7, 2003                                                   PS0505.018

Oppenheimer
Select Managers


Prospectus dated March 28, 2003


Mercury Advisors S&P 500 Index Fund
Mercury Advisors Focus Growth Fund
QM Active Balanced Fund
Jennison Growth Fund
Salomon Brothers All Cap Fund
Gartmore Millennium Growth Fund II

As with all  mutual  funds,  the  Securities  and  Exchange  Commission  has not
approved or disapproved  the Funds'  securities nor has it determined  that this
Prospectus  is  accurate  or  complete.  It is a criminal  offense to  represent
otherwise.



CONTENTS

            ABOUT THE FUNDS


            OSM - Mercury Advisors S&P 500 Index Fund OSM - Mercury Advisors
            Focus Growth Fund OSM - QM Active Balanced Fund OSM - Jennison
            Growth Fund OSM - Salomon Brothers All Cap Fund OSM - Gartmore
            Millennium Growth Fund II About the Funds' Investments How the Funds
            are Managed


            ABOUT YOUR ACCOUNT

            How to Buy Shares
            Class A Shares
            Class B Shares
            Class C Shares
            Class N Shares
            Class Y Shares

            Special Investor Services
            AccountLink
            PhoneLink
            OppenheimerFunds Internet Website
            Retirement Plans

            How to Sell Shares

            By Wire
            By Mail
            By Telephone


            How to Exchange Shares
            Shareholder Account Rules and Policies
            Dividends, Capital Gains and Taxes
            Master/Feeder Structure
            Financial Highlights





ABOUT THE FUNDS

Oppenheimer Select Managers -
Mercury Advisors S&P 500 Index Fund

WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks to match the performance
of the Standard & Poor's 500 Composite Stock Price Index (the "S&P 500")
as closely as possible before the deduction of Fund expenses.


WHAT DOES THE FUND MAINLY INVEST IN? The Fund is a non-diversified mutual fund
series of Oppenheimer Select Managers (referred to in this Prospectus as the
"Trust" or "OSM") that invests all of its assets in the Master S&P 500 Index
Series of the Quantitative Master Series Trust, a registered investment company
(the "Master Fund") that has the same goals as the Fund. All investments will be
made by the Master Fund. This structure is sometimes referred to as a
"master/feeder" structure. The Fund's investment results will correspond
directly to the investment results of the Master Fund. For simplicity, the term
"Fund" refers to the Fund and/or the Master Fund, unless otherwise identified.
For more information on the master/feeder structure, see "Master/Feeder
Structure" on page 74.


      The Fund normally invests at least 80% of its net assets (plus borrowings
for investment purposes) in securities or other financial instruments in, or
correlated with, the S&P 500. The Fund may invest in all 500 stocks in the
S&P 500 in roughly the same proportions as their weightings in the S&P
500. The Fund may also invest in a strategically selected sample of the 500
stocks in the S&P 500 which has aggregate investment characteristics, such
as average market capitalization and industry weightings, similar to the S&P
500 as a whole, but which involves less transaction cost than would be incurred
by purchasing all 500 stocks. Fund Asset Management L.P., doing business as
Mercury Advisors, the investment adviser to the Master Fund (the "Adviser"), may
also purchase stocks not included in the S&P 500 when it believes that it
would be a cost effective way of approximating the S&P 500's performance to
do so. If the Adviser uses these techniques, the Fund may not track the S&P
500 as closely as it would if it were fully replicating the S&P 500. The
Fund may change the index it attempts to match if the Adviser believes a
different index would better enable the Fund to match the performance of the
market segment represented by the S&P 500 and, accordingly, the investment
objective of the Fund may be changed without shareholder approval.


      The Fund may invest in illiquid securities, repurchase agreements, and may
engage in securities lending. The Fund will also invest in short term money
market instruments such as cash reserves to maintain liquidity. These
instruments may include obligations of the U.S. Government, its agencies, or
instrumentalities, highly rated bonds or comparable unrated bonds, commercial
paper, bank obligations and repurchase agreements and commingled short-term
liquidity funds. To the extent the Fund invests in short term money market
instruments, it will generally also invest in options, futures or other
derivatives in order to seek to maintain full exposure to the S&P 500. The
Fund will not invest in options, futures, other derivative instruments or short
term money market instruments in order to lessen the Fund's exposure to common
stocks as a defensive strategy, but will instead generally attempt to remain
fully invested at all times.


      The Fund may invest in derivative instruments, and will normally invest a
substantial portion of its assets in options and futures contracts linked to the
performance of the S&P 500. Derivatives allow the Fund to increase or
decrease its exposure to the S&P 500 quickly and at less cost than buying or
selling stocks. The Fund will invest in options, futures and other derivative
instruments in order to gain market exposure quickly in the event of
subscriptions, to maintain liquidity in the event of redemptions and to keep
trading costs low. In connection with the use of derivative instruments, the
Fund may enter into short sales in order to adjust the weightings of particular
securities represented in a derivative to more accurately reflect the
securities' weightings in the target index.


How Does the Fund's Adviser Decide What Securities To Buy or Sell? The Adviser
provides the day-to-day portfolio management of the Fund's assets. The Master
Fund's portfolio manager is employed by the Adviser. The Adviser will not
attempt to buy or sell securities based on its economic, financial or market
analysis, but will instead employ a "passive" investment approach. This means
that the Adviser will attempt to invest in a portfolio of assets whose
performance is expected to match approximately the performance of the S&P 500
before deduction of Fund expenses. Except as otherwise provided in the
Prospectus, the Adviser will buy or sell securities only when it believes it is
necessary to do so in order to match the performance of the S&P 500. The
portfolio manager monitors individual issuers for changes in the factors above
and these changes may trigger a decision to sell a security.


Who is the Fund Designed For? The Fund is designed for investors who want to
invest in the securities of large U.S. companies contained in the S&P 500 and
are willing to accept the risk that the value of their investment may decline.
The Fund does not seek current income and the income from its investments will
likely be small. The Fund is not designed for investors needing current income
or preservation of capital. Shares of the Fund are available for purchase by
retirement plans only. The Fund is not a complete investment program.

Main Risks of Investing in the Fund


All investments have some degree of risk. The Fund's investments are subject to
changes in their value from a number of factors, some of which are described
below. The risks described below collectively form the risk profile of the Fund,
and can affect the value of the Fund's investments, its investment performance
and its prices per share. Particular investments and investment strategies also
have risks. These risks mean that you can lose money by investing in the Fund.
When you redeem your shares, they may be worth more or less than what you paid
for them. There is no assurance that the Fund or the Master Fund will achieve
its investment objective.


Selection Risk. The Fund is subject to selection risk, which is the risk that
the Fund's investments, which may not fully mirror the index, may underperform
the stock market or other funds with similar investment objectives and
investment strategies. The Fund will attempt to be fully invested at all times,
and will not hold a significant portion of its assets in cash. The Fund will
generally not attempt to hedge against adverse market movements. Therefore, the
Fund might go down in value more than other mutual funds in the event of a
general market decline. In addition, the Fund has operating and other expenses
while the S&P 500 does not. As a result, while the Fund will attempt to track
the S&P 500 as closely as possible, it will tend to underperform the S&P
500 to some degree over time.

Risks of Investing in Stocks. Because the Fund invests primarily in stocks, the
value of the Fund's portfolio will be affected by changes in the stock markets.
Market risk will affect the Fund's net asset value per share, which will
fluctuate as the values of the Fund's portfolio securities change. Prices of
individual stocks do not all move in the same direction uniformly or at the same
time. Different stock markets may also behave differently from each other.
Securities in the Fund's portfolio may not increase as much as the market as a
whole. Some securities may not be actively traded, and therefore, may not be
readily bought or sold. Although at times some of the Fund's investments may
appreciate in value rapidly, investors should not expect that most of the Fund's
investments will appreciate rapidly.

      Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry.

Risks of Derivative Investments. The Fund can use derivatives for the management
of cash balances as well as to increase or decrease its exposure to the S&P
500 quickly. In general terms, a derivative investment is an investment contract
whose value depends on (or is derived from) the value of an underlying asset,
interest rate or index. Options and futures are examples of derivatives the Fund
can use.


      The Fund may use derivatives for anticipatory hedging. Anticipatory
hedging is a strategy in which the Fund uses a derivative to offset the risk
that securities in which the Fund intends to invest will increase in value
before the Fund has an opportunity to purchase the securities. The Fund will use
derivatives for anticipatory hedging in order to gain exposure efficiently to
its underlying indices or market segments in the event the Fund receives cash
inflows. Derivatives may not always be available or cost efficient. If the Fund
invests in derivatives, the investments may not be as effective as a hedge
against price movements.


      If the issuer of the derivative does not pay the amount due, the Fund can
lose money on the investment. Also, the underlying security or investment on
which the derivative is based, and the derivative itself, may not perform the
way the portfolio manager expected it to perform. If that happens, the Fund's
share prices could fall, or its hedge might be unsuccessful. Some derivatives
may be illiquid, making it difficult to sell them quickly at an acceptable
price. The Fund has limits on the amount of particular types of derivatives it
can hold. Using derivatives can increase the volatility of the Fund's share
prices.

Risks of Short Sales. When the Fund makes a short sale, it must borrow the
security sold short and deliver it to the broker-dealer through which it made
the short sale as collateral for its obligation to deliver the security upon
conclusion of the sale. If the price of the security sold short increases
between the time of the short sale and the time the Fund replaces the borrowed
security, the Fund will incur a loss; conversely, if the price declines, the
Fund will realize a gain. Any gain will be decreased, and any loss increased, by
transaction costs. Although the Fund's gain is limited to the price at which it
sold the security short, its potential loss is theoretically unlimited. If the
Fund makes short sales of securities that increase in value, it may underperform
similar mutual funds that do not make short sales of securities they do not own.

Risks of Non-Diversification. The Fund is "non-diversified." That means that
compared to funds that are diversified, it can invest a greater portion of its
net assets in the securities of one issuer, such as the Master Fund. However,
the Master Fund invests, under normal circumstances, at least 80% of its assets
in securities or other financial instruments which are contained in or
correlated with securities in the S&P 500. Therefore, the portfolio
investments of the Master Fund may be diversified.

HOW RISKY IS THE FUND OVERALL? The Master Fund focuses its investments on the
stocks of large U.S. companies with the intent of replicating the S&P 500
before deduction of fees and expenses. The price of the Master Fund's shares can
go up and down substantially. The Master Fund does not use income-oriented
investments to help cushion the Master Fund's total return from changes in stock
prices. The Fund invests all of its assets in shares of the Master Fund and is
therefore non-diversified. It will therefore be vulnerable to the effects of
economic changes that affect shares of the Master Fund. These changes can affect
the value of the Fund's price per share. In the OppenheimerFunds spectrum, the
Fund is generally more aggressive than funds that invest in both stocks and
bonds, but may be less volatile than mid-cap stock funds.

- ------------------------------------------------------------------------------
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
- ------------------------------------------------------------------------------


The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the
Fund, by showing the Fund's performance (for its Class A shares) since the
Fund's inception and by showing how the average annual total returns of the
Fund's shares compare to those of a broad-based market index. Please remember
that the Fund is intended to be a long-term investment, and that performance
results are historical, and that past performance (particularly over a
short-term period) is not predictive of future results.

Annual Total Returns (Class A)
(as of 12/31 each year)

  [See appendix to prospectus for data in bar chart showing the annual total
                                   return]

Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 7.71% (4thQtr'02) and the lowest return
(not annualized) before taxes for a calendar quarter was -17.30% (3rdQtr'02).


- --------------------------------------------------------------------------------

                                                                         5 Years
Average Annual Total Returns                                     (or life of
for the periods ended December 31, 2002             1 Year     class, if less)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares (inception 2/16/01)                  -27.62%        -21.15%

- --------------------------------------------------------------------------------

S&P 500 Index (reflects no deduction for fees,      -22.09%       -15.80%1
expenses or taxes)

- --------------------------------------------------------------------------------

Class B Shares (inception 2/16/01)                  -27.56%        -20.91%

- --------------------------------------------------------------------------------

Class C Shares (inception 2/16/01)                  -24.54%        -19.23%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares (inception 3/1/01)                   -24.10%        -17.12%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares (inception 2/16/01)                  -23.06%        -18.29%

- --------------------------------------------------------------------------------


1From 2/28/01.
The Fund's average annual total returns include applicable sales charges: for
Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 4% (life of class); and for
Class C and Class N, the 1% contingent deferred sales charge for the 1-year
period. There is no sales charge for Class Y. The returns measure the
performance of a hypothetical account and assume that all dividends and capital
gains distributions have been reinvested in additional shares. The performance
of the Fund's Class A shares is compared to the S&P 500 Index, an unmanaged
index of equity securities. The index performance includes reinvestment of
income but does not reflect transaction costs, expenses or taxes. The Fund's
investments may vary from those in the index.


Fees and Expenses of the Fund


The following tables are provided to help you understand the fees and expenses
you may pay if you buy and hold shares of the Fund. The Fund pays indirectly
through its investment in the Master Fund for management of its assets. The Fund
pays a variety of expenses directly for administration, distribution of its
shares and other services. Those expenses are subtracted from the Fund's assets
to calculate the Fund's net asset value per share. All shareholders therefore
pay those expenses indirectly. Shareholders pay other expenses directly, such as
sales charges and account transaction charges. The numbers below are based on
the Fund's expenses during its fiscal year ended December 31, 2002.


Shareholder Fees (charges paid directly from your investment):

- ---------------------------------------------------------------------------------
                                     Class A Class B  Class C  Class N  Class Y
                                     Shares   Shares   Shares   Shares   Shares
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Maximum Sales Charge (Load) on        5.75%    None     None     None     None
purchases (as % of offering price)

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original
offering                              None1    5%2      1%3      1%4      None
price or redemption proceeds)
- ---------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$500,000 or more of Class A shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

- ---------------------------------------------------------------------------------
                                  Class A  Class B  Class C  Class N   Class Y
                                   Shares   Shares   Shares   Shares    Shares
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Management Fees                    0.005%   0.005%   0.005%   0.005%    0.005%
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Distribution and/or Service        0.24%    1.00%    1.00%    0.50%      N/A
(12b-1) Fees

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Other Expenses                     1.79%    1.78%    1.70%    1.66%     46.32%

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Total Annual Operating Expenses    2.035%   2.785%   2.705%   2.165%   46.325%

- ---------------------------------------------------------------------------------
The management fee listed is the fee paid by the Master Fund and incurred
indirectly by this Fund. This Fund does not pay a management fee directly to the
Adviser. The Adviser has entered into a contractual arrangement with the Master
Fund to provide that the management fee for the Master Fund, when combined with
administrative fees of certain funds that invest in the Master Fund (other than
this Fund), will not exceed a specific amount. As a result of this contractual
arrangement, the Adviser currently receives management fees of 0.005%. This
arrangement has a one-year term and is renewable. Absent that contractual
arrangement, the management fee paid by the Master Fund to the Adviser would be
0.05%.

Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, administration fees paid to OppenheimerFunds, Inc., and
accounting and legal expenses that the Fund pays as well as the Fund's pro rata
share of the expenses of the Master Fund. The "Other Expenses" in the table are
based on, among other things, the fees the Fund would have paid if the transfer
agent had not waived a portion of its fee under a voluntary undertaking to the
Fund to limit these fees to 0.25% per annum for Class Y shares and 0.35% per
annum for all other classes. "Total Annual Operating Expenses" were reduced by a
voluntary expense assumption undertaking by the Manager. With that expense
assumption and the transfer agent waiver, "Total Annual Operating Expenses" were
1.085% for Class A, 1.835% for Class B, 1.805% for Class C, 1.295% for Class N
and 0.835% for Class Y. Effective November 1, 2002, the limit on transfer agent
fees for Class Y shares increased to 0.35% of average daily net assets per
fiscal year. Had that limit been in effect during the Fund's prior fiscal year,
the Class Y "Total Annual Operating Expenses" as percentage of average daily net
assets would have been .935%. Those voluntary undertakings may be revised or
terminated at any time.

EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.


      The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

- --------------------------------------------------------------------------------
If shares are redeemed:   1 Year        3 Years      5 Years       10 Years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $770          $1,176       $1,608        $2,803

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $782          $1,164       $1,672        $2,7711

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $374          $840         $1,432        $3,037

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $320          $678         $1,162        $2,498

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y Shares            $10,000       $0           $0            $10,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $770          $1,176       $1,608        $2,803

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $282          $864         $1,472        $2,7711

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $274          $840         $1,432        $3,037

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $220          $678         $1,162        $2,498

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Class Y Shares            $10,000       $0           $0            $10,000
- --------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. There are no sales charges on Class Y shares.

1. Class B expenses for years 7 through 10 are based on Class A expenses,
because Class B shares automatically convert to Class A shares 72 months after
purchase.





Oppenheimer Select Managers -
Mercury Advisors Focus Growth Fund

What is the Fund's Investment Objective? The Fund seeks long-term capital
appreciation.


What Does the Fund Mainly Invest In? The Fund is a non-diversified aggressive
growth mutual fund that invests all of its assets in the Master Focus Twenty
Trust (the "Master Fund"), a mutual fund that has the same goals as the Fund.
All investments will be made by the Master Fund. This structure is sometimes
referred to as a "master/feeder" structure. The Fund's investment results will
correspond directly to the investment results of the Master Fund. For
simplicity, the term "Fund" refers to the Fund and/or the Master Fund, unless
otherwise identified. For more information on the master/feeder structure, see
"Master/Feeder Structure" on page 74.

      The Fund generally invests at least 65% of its total assets in equity
securities. Normally, the Fund will invest in the common stock of approximately
20 to 30 companies that Fund Asset Management L.P., doing business as Mercury
Advisors, the investment adviser to the Master Fund (the "Adviser"), believes
have earnings growth and capital appreciation potential (also known as
"aggressive growth companies"). The Fund may invest in companies of any size but
currently emphasizes common stocks of companies with large stock market
capitalizations (greater than $5 billion). To a lesser extent, the Fund also may
invest in preferred stock, convertible securities, warrants and rights to
subscribe to common stock of those companies. The Fund may invest in excess of
35% of its total assets in cash or U.S. dollar denominated high quality
short-term debt instruments for temporary defensive purposes, to maintain
liquidity or when economic or market conditions are unfavorable for profitable
investing. The Master Fund may lend its portfolio securities and may invest
uninvested cash balances in affiliated money market funds. The Fund may also
invest in certain derivative securities. Derivatives are financial instruments
whose value is derived from another security, a commodity (such as gold or oil),
or an index such as the S&P 500 Index. The Fund may also make short
sales of securities.

How Does the Adviser Decide What Securities To Buy or Sell? The Adviser provides
the day-to-day portfolio management of the Fund's assets. The Adviser selects
securities of companies that it believes have strong earnings growth and capital
appreciation potential. The Adviser begins its investment process by creating a
universe of rapidly growing companies that possess certain growth
characteristics. That universe is continually updated. The Adviser then ranks
each company within its universe by using research models that focus on growth
characteristics such as positive earnings surprises, upward earnings estimate
revisions, and accelerating sales and earnings growth. Finally, using its own
fundamental research and bottom-up approach to investing, the Adviser evaluates
the quality of each company's earnings and tries to determine whether the
company can sustain or increase its current growth trend. The Adviser believes
that this disciplined investment process enables it to construct a portfolio of
investments with strong growth characteristics. The Adviser monitors individual
issuers for changes in the factors above and these changes may trigger a
decision to sell a security.

Who Is the Fund Designed For? The Fund is designed primarily for investors
seeking capital appreciation in their investment over the long term (at least 5
years). Those investors should be willing to assume the greater risks of
short-term share price fluctuations that are typical for funds seeking long-term
capital appreciation, and in particular for a non-diversified fund consisting of
relatively few aggressive growth companies. The Fund is designed for investors
who understand that the Fund's strategy of investing in relatively few companies
and industries may subject the Fund to sector risk and increased volatility. The
Fund does not seek current income and is not designed for investors needing
current income or preservation of capital. Because of its focus on long-term
capital appreciation, the Fund may be appropriate for a portion of a retirement
plan investment. The Fund is not a complete investment program.


Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in stocks are
subject to changes in their value from a number of factors described below.
There is also the risk that poor security selection by the Adviser will cause
the Fund to underperform other funds having a similar objective.


      The risks described below can affect the value of the Fund's investments,
its investment performance and its prices per share. Particular investments and
investment strategies also have risks. These risks mean that you can lose money
by investing in the Fund. When you redeem your shares, they may be worth more or
less than what you paid for them. There is no assurance that the Fund or the
Master Fund will achieve its investment objective.


RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. Because the Fund invests primarily in common
stocks, the value of the Fund's portfolio will be affected by changes in the
stock markets in which it invests. Market risk will affect the Fund's net asset
value per share, which will fluctuate as the values of the Fund's portfolio
securities change. A variety of factors can affect the price of a particular
stock and the prices of individual stocks do not all move in the same direction
uniformly or at the same time. Different stock markets may behave differently
from each other.

      Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry.

Risks of Growth Stocks. Stocks of growth companies, particularly newer
companies, may offer opportunities for greater long-term capital appreciation
but may be more volatile than stocks of larger, more established companies. They
have greater risks if the company's earnings growth or stock price fails to
increase as expected.


SELECTION RISK. Selection risk is the risk that the securities that Fund
management selects will underperform the markets, the relevant indices or other
funds with similar investment objectives and investment strategies. If Fund
management's expectations regarding particular stocks are not met, the Fund may
not achieve its investment objective.

SECTOR RISK. To the extent that the Fund concentrates its investments in a
specific sector, there is the possibility that the investments within that
sector will decline in price due to industry-specific market or economic
developments.

Risks of Derivative Investments. The Fund can use derivatives for the management
of cash balances as well as to increase or decrease its exposure to risk
quickly. In general terms, a derivative investment is an investment contract
whose value depends on (or is derived from) the value of an underlying asset,
interest rate or index. Options and futures are examples of derivatives the Fund
can use.


      If the issuer of the derivative does not pay the amount due, the Fund can
lose money on the investment. Also, the underlying security or investment on
which the derivative is based, and the derivative itself, may not perform the
way the portfolio manager expected it to perform. If that happens, the Fund's
share prices could fall, or its hedge might be unsuccessful. Some derivatives
may be illiquid, making it difficult to value them or sell them quickly at an
acceptable price. The Fund has limits on the amount of particular types of
derivatives it can hold. Using derivatives can increase the volatility of the
Fund's share prices.


Risks of Non-Diversification. The Fund is "non-diversified." That means that
compared to funds that are diversified, it can invest a greater portion of its
assets in the securities of one issuer. Having a higher percentage of its assets
invested in the securities of fewer issuers could result in greater fluctuations
of the Fund's share prices due to events affecting a particular issuer. If the
value of the Fund's investments goes down, you may lose money.

HOW RISKY IS THE FUND OVERALL? In the short term, the stock markets can be
volatile, and the price of the Fund's shares can go up and down substantially.
Growth stocks may be more volatile than other equity investments. The Master
Fund generally does not use income-oriented investments to help cushion its
total return from changes in stock prices. The Master Fund focuses its
investments in a limited number of issuers. By concentrating in a smaller number
of investments, the Master Fund's and the Fund's risk is increased because each
investment has a greater effect on the Master Fund's and the Fund's performance.
The Fund invests all of its assets in shares of the Master Fund and is therefore
non-diversified. It will therefore be vulnerable to the effects of market and
economic changes that affect the Master Fund. These changes can affect the value
of the Fund's price per share. Because of the Fund's volatile nature, when the
markets or specific market sectors decline, the Fund may underperform the market
averages. The Fund is also subject to the risk that the stocks that Fund
management selects will underperform the stock market, the relevant indices or
other funds with similar investment objectives and investment strategies. In the
OppenheimerFunds spectrum, the Fund is generally more aggressive than funds that
invest in both stocks and bonds or in investment grade debt securities.

- ------------------------------------------------------------------------------

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
- ------------------------------------------------------------------------------


The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the
Fund, by showing the Fund (for its Class A shares) since the Fund's inception
and by showing how the average annual total returns of the Fund's shares, both
before and after taxes, compare to those of broad-based market indices. The
table compares the average annual total returns of the Fund's performance (for
its Class A shares) since the Fund's inception with those of the Standard &
Poor's (S&P) 500 Barra Growth Index, a broad measure of market value. The Fund
uses this index as its benchmark rather than the S&P 500 Index because the
S&P 500 Barra Growth Index better reflects the Fund's growth investing style.
The table also compares the Fund's performance to the NASDAQ Index. The
after-tax returns for the other classes of shares will vary.

      The after-tax returns are shown for Class A shares only and are calculated
using the historical highest individual federal marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. The after-tax returns are calculated based on certain
assumptions mandated by regulation and your actual after-tax returns may differ
from those shown, depending on your individual tax situation. The after-tax
returns set forth below are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or IRAs or to
institutional investors not subject to tax. The Fund's past investment
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future.

Annual Total Returns (Class A)
(as of 12/31 each year)

  [See appendix to prospectus for data in bar chart showing the annual total
                                   return]

Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 2.19% (4thQtr'02) and the lowest return
(not annualized) before taxes for a calendar quarter was -20.56% (3rdQtr'02).


- --------------------------------------------------------------------------------

Average Annual Total Returns                        1 Year         5 Years
                                                                 (or life of
For the periods ended December 31, 2002                        class, if less)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares (inception 2/16/01)
     Return Before Taxes                           -42.51%         -55.45%
     Return After Taxes on Distributions           -42.51%         -55.45%
     Return  After Taxes on  Distributions  and    -25.89%         -40.68%
Sale of Fund Shares

- --------------------------------------------------------------------------------

S&P 500 Barra Growth Index (reflects no            -23.59%         -15.48%1
deduction for fees, expenses or taxes)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NASDAQ  Composite  Index (reflects no deduction    -31.53%         -22.91%2
for fees, expenses or taxes)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares (inception 2/16/01)                 -42.50%         -55.32%

- --------------------------------------------------------------------------------

Class C Shares (inception 2/16/01)                 -40.08%         -54.33%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares (inception 3/1/01)                  -39.62%         -49.92%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares (inception 2/16/01)                 -39.06%         -53.91%

- --------------------------------------------------------------------------------


1From 2/28/01.
2From 2/28/01.
The Fund's average annual total returns include applicable sales charges: for
Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 4% (life of class); and for
Class C and Class N the 1% contingent deferred sales charge for the 1-year
period. There is no sales charge for Class Y. The returns measure the
performance of a hypothetical account and assume that all dividends and capital
gains distributions have been reinvested in additional shares. The performance
of the Fund's Class A shares is compared to the S&P Barra Growth Index and
the NASDAQ Composite Index. The S&P 500 Barra Growth Index is a widely
recognized, unmanaged index of common stock prices. The NASDAQ Composite Index
is an unmanaged broad-based index comprised of common stocks. The index
performance includes reinvestment of income but does not reflect transaction
costs, expenses or taxes. The Fund will have investments that vary from those in
the indices.

Fees and Expenses of the Fund


The following tables are provided to help you understand the fees and expenses
you may pay if you buy and hold shares of the Fund. The Fund pays indirectly
through its investment in the Master Fund for management of its assets. The Fund
pays a variety of expenses directly for administration, distribution of its
shares and other services. Those expenses are subtracted from the Fund's assets
to calculate the Fund's net asset value per share. All shareholders therefore
pay those expenses indirectly. Shareholders pay other expenses directly, such as
sales charges and account transaction charges. The numbers below are based on
the Fund's expenses during its fiscal period ended November 30, 2002.


Shareholder Fees (charges paid directly from your investment):

- ---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or redemption proceeds)
- ---------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

- -------------------------------------------------------------------------------
                                Class A  Class B   Class C   Class N  Class Y
                                Shares   Shares    Shares    Shares   Shares
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Management Fees                 0.60%    0.60%     0.60%     0.60%    0.60%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Distribution and/or Service     0.24%    1.00%     1.00%     0.50%    N/A
(12b-1) Fees

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Other Expenses                  2.52%    2.56%     2.53%     2.68%    88.54%

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Total Annual Operating Expenses 3.36%    4.16%     4.13%     3.78%    89.14%

- -------------------------------------------------------------------------------

The management fee listed is the fee paid by the Master Fund and incurred
indirectly by this Fund. This Fund does not pay a management fee directly to the
Adviser. Expenses may vary in future years. "Other Expenses" include transfer
agent fees, custodial fees, administration fees paid to OppenheimerFunds, Inc.,
and accounting and legal expenses that the Fund pays as well as the Fund's pro
rata share of the expenses of the Master Fund. The "Other Expenses" in the table
are based on, among other things, the fees the Fund would have paid if the
transfer agent had not waived a portion of its fee under a voluntary undertaking
to the Fund to limit these fees to 0.25% per annum for Class Y shares and 0.35%
per annum for all other classes. "Total Annual Operating Expenses" were reduced
by a voluntary expense assumption undertaking by the Manager. With that expense
assumption and the transfer agent waiver, "Total Annual Operating Expenses" were
2.34% for Class A, 3.13% for Class B, 3.07% for Class C, 2.72% for Class N and
1.81% for Class Y. Effective November 1, 2002, the limit on transfer agent fees
for Class Y shares increased to 0.35% of average daily net assets per fiscal
year. Had that limit been in effect during the Fund's prior fiscal year, the
Class Y "Total Annual Operating Expenses" as percentage of average daily net
assets would have been 1.91%. Those voluntary undertakings may be revised or
terminated at any time.


EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.

      The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

- --------------------------------------------------------------------------------

If shares are redeemed:1  1 Year        3 Years      5 Years       10 Years

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $894          $1,549       $2,225        $4,014

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $918          $1,564       $2,324        $4,0202

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $515          $1,255       $2,110        $4,314

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $480          $1,155       $1,949        $4,019

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,170        $5,981       $6,003        $10,000

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $894          $1,549       $2,225        $4,014

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $418          $1,264       $2,124        $4,0202

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $415          $1,255       $2,110        $4,314

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $380          $1,155       $1,949        $4,019

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,170        $5,981       $6,003        $10,000

- --------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. There are no sales charges on Class Y shares.

1. Includes expenses of both the Fund and the Master Fund. 2. Class B expenses
for years 7 through 10 are based on Class A expenses, because Class B shares
automatically convert to Class A shares 72 months after purchase.





Oppenheimer Select Managers - QM Active Balanced Fund

What is the Fund's Investment Objective? The Fund seeks income and long-term
growth of capital.

What Does the Fund Mainly Invest In? To seek income and long-term growth of
capital, the Fund invests mainly in a wide variety of equity securities, debt
securities and money market instruments. The Fund's investments will be actively
shifted among these asset classes in order to capitalize on valuation
opportunities and to maximize the Fund's total return. The Fund also invests in
other equity securities, such as non-convertible preferred stocks and securities
convertible into common stock.

      Under normal market conditions, the Fund invests:
o     40% to 75% of its total assets in equity securities, including common
      stocks and preferred stocks of issuers of every size - small, medium and
      large capitalization.
o     25% to 60% of its total assets in investment-grade debt securities.
o     0% to 35% of its total assets in money market instruments.


      The Fund can invest up to 35% of its total assets in foreign equity and
debt securities. Up to 30% of the Fund's assets may be used in investment
techniques involving leverage, such as dollar rolls, forward rolls and reverse
repurchase agreements. The portfolio manager also may use derivatives for
hedging or to improve the Fund's returns.

How Do The Portfolio Managers Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained
Prudential Investment Management (the "Subadviser") to provide the day-to-day
portfolio management of the Fund's assets. The Fund's portfolio managers are
employed by the Subadviser. In selecting securities for the Fund, the Fund's
portfolio managers use a quantitative model. They manage the stock portion of
the Fund's portfolio using behavioral finance models to search for securities of
companies believed to be underpriced, while maintaining a risk profile like the
Standard & Poor's 500 Composite Stock Price Index.


      The portfolio managers allocate the Fund's investments among equity and
debt securities after assessing the relative values of these different types of
investments under prevailing market conditions. The portfolio might hold stocks,
bonds and money market instruments in different proportions at different times.
While stocks and other equity securities are normally emphasized to seek growth
of capital, the portfolio managers might buy bonds and other fixed-income
securities, instead of stocks, when they think that:
      o common stocks in general appear to be overvalued, o debt securities
      offer meaningful capital growth opportunities
         relative to common stocks, or
      o  it is desirable to maintain liquidity pending investment in equity
         securities to seek capital growth opportunities.


      The portfolio managers monitor individual issuers for changes in the
factors above and these changes may trigger a decision to sell a security.


WHO IS THE FUND DESIGNED FOR? The Fund is designed for investors seeking growth
of capital over the long term with the opportunity for some income. Those
investors should be willing to assume the risk of short-term share price
fluctuations that are typical for a fund emphasizing equity investments. Since
the Fund's income level will fluctuate, it is not designed for investors needing
an assured level of current income. Because of its primary focus on long-term
growth of capital, the Fund may be appropriate for moderately aggressive
investors. Shares of the Fund are available for purchase by retirement plans
only. The Fund is not a complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in stocks and
bonds are subject to changes in their value from a number of factors, as
described below. There is also the risk that poor security selection by the
portfolio manager will cause the Fund to underperform other funds having a
similar objective.


      The risks described below collectively form the risk profile of the Fund,
and can affect the value of the Fund's investments, its investment performance
and its prices per share. Particular investments and investment strategies also
have risks. These risks mean that you can lose money by investing in the Fund.
When you redeem your shares, they may be worth more or less than what you paid
for them. There is no assurance that the Fund will achieve its investment
objective.


RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. Because the Fund normally focuses its
investments in equity securities, the value of the Fund's portfolio will be
affected by changes in the stock markets in which it invests. Market risk will
affect the Fund's net asset values per share, which will fluctuate as the values
of the Fund's portfolio securities change. A variety of factors can affect the
price of a particular stock and the prices of individual stocks do not all move
in the same direction uniformly or at the same time. Different stock markets may
behave differently from each other. Because the Fund can buy both U.S. and
foreign stocks it could be affected by changes in domestic and foreign stock
markets.

      Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer. The Fund
invests in securities of large companies and can also buy securities of small
and medium-capitalization companies, which may have more volatile stock prices
than large companies.

Industry Focus. At times the Fund may increase the relative emphasis of its
investments in stocks of companies in a single industry. Stocks of issuers in a
particular industry may be affected by changes in economic conditions, or by
changes in government regulations, availability of basic resources or supplies,
or other events that affect that industry more than others. To the extent that
the Fund increases the emphasis of its investments in a particular industry, its
share values may fluctuate in response to events affecting that industry.


Risks of Foreign Investing. The Fund can invest in foreign securities. The Fund
currently does not intend to invest more than 35% of its total assets in foreign
securities. It can buy securities of both foreign governments and companies.
While foreign securities may offer special investment opportunities, they are
subject to special risks that can reduce the Fund's share prices and returns.


      The change in value of a foreign currency against the U.S. dollar will
affect the U.S. dollar value of securities denominated in that foreign currency.
Currency rate changes can also affect the distributions the Fund makes from the
income it receives from foreign securities. Foreign investing can result in
higher transaction and operating costs for the Fund. Foreign issuers are not
subject to the same accounting and disclosure requirements that U.S. companies
are subject to. The value of foreign investments may be affected by exchange
control regulations, currency devaluation, expropriation or nationalization of a
company's assets, foreign taxes, delays in settlement of transactions, changes
in governmental economic or monetary policy in the U.S. or abroad, or other
political and economic factors.

INTEREST RATE RISK. The values of debt securities, including U.S. government
securities, are subject to change when prevailing interest rates change. When
interest rates fall, the value of already-issued debt securities generally rise.
When interest rates rise, the values of already-issued debt securities generally
fall, and they may sell at a discount from their face amount. The magnitude of
these fluctuations will often be greater for longer-term debt securities. The
Fund's share prices can go up or down when interest rates change because of the
effect of the changes on the value of the Fund's investments in debt securities.

CREDIT RISK. Debt securities are subject to credit risk. Credit risk is the risk
that the issuer of a security might not make interest and principal payments on
the security as they become due. If the issuer fails to pay interest, the Fund's
income may be reduced and if the issuer fails to repay principal, the value of
that security and of the Fund's shares might fall. While the Fund's investments
in U.S. Government securities are subject to little credit risk, the Fund's
other investments in debt securities are subject to risks of default. A
downgrade in an issuer's credit rating or other adverse news about an issuer can
reduce a security's market value.

      The Fund can invest up to 20% of its total assets in high yield, lower
grade debt obligations rated below BBB by Standard & Poor's Ratings Group or
Baa by Moody's Investors Service, Inc. or the equivalent rating by another major
rating service. These lower-rated obligations - also known as "junk bonds" -
have a higher risk of default and tend to be less liquid and more volatile than
higher-grade obligations. The Fund also may invest in obligations that are not
rated, but that the Subadviser believes are of comparable quality to these
obligations.

HOW RISKY IS THE FUND OVERALL? In the short term, the stock markets can be
volatile, and the price of the Fund's shares can go up and down substantially.
The Fund's income-oriented investments may help cushion the Fund's total return
from changes in stock prices, but fixed-income securities have their own risks
and normally are not the primary emphasis of the Fund. In the OppenheimerFunds
spectrum, the Fund is more conservative than aggressive growth stock funds, but
has greater risk than investment-grade bond funds.

- ------------------------------------------------------------------------------
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
- ------------------------------------------------------------------------------


The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the
Fund, by showing the Fund's performance (for its Class A shares) since the
Fund's inception and by showing how the average annual total returns of the
Fund's shares compare to those of broad-based market indices. Please remember
that the Fund is intended to be a long-term investment, and that performance
results are historical, and that past performance (particularly over a
short-term period) is not predictive of future results.

Annual Total Returns (Class A)
(as of 12/31 each year)

  [See appendix to prospectus for data in bar chart showing the annual total
                                   return]

Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 5.21% (4thQtr'02) and the lowest return
(not annualized) before taxes for a calendar quarter was -11.11% (3rdQtr'02).


- --------------------------------------------------------------------------------

Average Annual Total Returns             1 Year                 5 Years
for the  periods  ended  December                        (or life of class, if
31, 2002                                                         less)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class   A    Shares    (inception        -17.47%                -12.08%
2/16/01)

- --------------------------------------------------------------------------------

S&P 500 Index (reflects no
deduction for fees, expenses or
taxes) -22.09% -15.80%1

- --------------------------------------------------------------------------------

Lehman Brothers
Government/Credit Bond Index
(reflects no deduction for fees,          9.84%                 8.76%1
expenses or taxes)

- --------------------------------------------------------------------------------

Class   B    Shares    (inception        -17.46%                -11.93%
2/16/01)

- --------------------------------------------------------------------------------

Class   C    Shares    (inception        -14.01%                -9.98%
2/16/01)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares (inception 3/1/01)        -13.49%                -8.46%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class   Y    Shares    (inception        -12.32%                -9.09%
2/16/01)

- --------------------------------------------------------------------------------


1From 2/28/01.
The Fund's average annual total returns include applicable sales charges: for
Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 4% (life of class); and for
Class C and Class N, the 1% contingent deferred sales charge for the 1-year
period. There is no sales charge for Class Y. The returns measure the
performance of a hypothetical account and assume that all dividends and capital
gains distributions have been reinvested in additional shares. The performance
of the Fund's Class A shares is compared to the S&P 500 Index and the Lehman
Brothers Government/Credit Bond Index. The S&P 500 Index is an unmanaged
index of equity securities and the Lehman Brothers Government/Credit Bond Index
is an unmanaged index of intermediate and long-term government and investment
grade corporate debt securities. The indices performance includes reinvestment
of income but does not reflect transaction costs, expenses or taxes. The Fund
will have investments that vary from those in the indices.


Fees and Expenses of the Fund


The following tables are meant to help you understand the fees and expenses you
may pay if you buy and hold shares of the Fund. The Fund pays a variety of
expenses directly for management of its assets, administration, distribution of
its shares and other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset values per share. All shareholders
therefore pay those expenses indirectly. Shareholders pay other expenses
directly, such as sales charges and account transaction charges. The numbers
below are based on the Fund's expenses during its fiscal period ended November
30, 2002.


Shareholder Fees (charges paid directly from your investment):

- ---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or redemption proceeds)
- ---------------------------------------------------------------------------------

1. A contingent deferred sales charge may apply to redemptions of investments of
$500,000 or more of Class A shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

- --------------------------------------------------------------------------------
                                   Class A  Class B  Class C  Class N  Class Y
                                   Shares   Shares   Shares   Shares   Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Management Fees                    0.95%    0.95%    0.95%    0.95%    0.95%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Distribution and/or Service        0.01%    1.00%    1.00%    0.50%    N/A
(12b-1) Fees

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Other Expenses                     0.55%    0.80%    0.72%    0.77%    87.08%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Total Annual Operating Expenses    1.51%    2.75%    2.67%    2.22%    88.03%

- --------------------------------------------------------------------------------

Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund pays. "Other
Expenses" in the table are based on, among other things, the fees the Fund would
have paid if the transfer agent had not waived a portion of its fee under a
voluntary undertaking to the Fund to limit these fees to 0.25% per annum for
Class Y shares and 0.35% per annum for all other classes. "Total Annual
Operating Expenses" were reduced by a voluntary expense assumption undertaking
by the Manager. With that expense assumption and the transfer agent waiver,
"Total Annual Operating Expenses" were 1.41% for Class A, 2.64% for Class B,
2.56% for Class C, 2.12% for Class N and 1.54% for Class Y. Effective November
1, 2002, the limit on transfer agent fees for Class Y shares increased to 0.35%
of average daily net assets per fiscal year. Had that limit been in effect
during the Fund's prior fiscal year, the Class Y "Total Annual Operating
Expenses" as percentage of average daily net assets would have been 1.64%. Those
expense undertakings may be revised or terminated at any time.


EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.

      The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

- --------------------------------------------------------------------------------
If shares are redeemed:   1 Year        3 Years      5 Years       10 Years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $720          $1,025       $1,351        $2,273

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $778          $1,153       $1,654        $2,5051

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $370          $829         $1,415        $3,003

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $325          $694         $1,190        $2,554

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,148        $6,170       $6,200        $10,000

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $720          $1,025       $1,351        $2,273

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $278          $853         $1,454        $2,5051

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $270          $829         $1,415        $3,003

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $225          $694         $1,190        $2,254

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,148        $6,170       $6,200        $10,000

- --------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. There are no sales charges on Class Y shares.

1. Class B expenses for years 7 through 10 are based on Class A expenses,
because Class B shares automatically convert to Class A shares 72 months after
purchase.





Oppenheimer Select Managers - Jennison Growth Fund

What is the Fund's Investment Objective? The Fund seeks long-term growth of
capital.

What Does the Fund Mainly Invest In? Under normal market conditions, the Fund
invests at least 65% of its total assets in equity-related securities of
companies that exceed $1 billion in market capitalization and that the portfolio
managers believe have above-average growth prospects. These companies are
generally considered medium to large capitalization companies. They tend to have
a unique market niche, a strong new product profile or superior management.
Equity-related securities in which the Fund primarily invests are common stocks,
non-convertible preferred stocks and convertible securities. The Fund may also
invest in American Depository Receipts ("ADRs"), warrants and rights that can be
exercised to obtain stock, and real estate investment trusts.


      The Fund can invest up to 20% of its total assets in foreign securities of
both foreign governments and companies. The Fund can invest in investment-grade
fixed-income securities, including mortgage-related securities, and U.S.
government obligations but does not generally do so. The Fund also may engage in
short sales and may use derivatives for hedging or to improve the Fund's
returns.


How Do the Portfolio Managers Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained Jennison
Associates LLC (the "Subadviser" or "Jennison") to provide the day-to-day
portfolio management of the Fund's assets. The Fund's portfolio managers are
employed by the Subadviser. In selecting securities for the Fund, the Fund's
portfolio managers look to invest in large companies experiencing some or all of
the following:

o     above-average revenue and earnings per share growth
o     strong market position
o     improving profitability and distinctive attributes such as unique
         marketing ability
o     strong research and development
o     productive new product flow
o     financial strength


      Such companies generally trade at high prices relative to their current
earnings. The portfolio managers will consider selling or reducing a stock
position when, in the opinion of the portfolio managers, the stock has
experienced a fundamental disappointment in earnings; it has reached an
intermediate-term price objective and its outlook no longer seems sufficiently
promising; a relatively more attractive stock emerges; or the stock has
experienced adverse price movement. The portfolio managers monitor individual
issuers for changes in the factors above and these changes may trigger a
decision to sell a security.


Who Is the Fund Designed For? The Fund is designed for investors seeking
long-term growth of capital. Those investors should be willing to assume the
greater risks of share price fluctuations that are typical for a growth fund
focusing on stock investments. Since the Fund does not seek income and its
income from investments will likely be small, it is not designed for investors
needing current income. Because of its focus on long-term growth of capital, the
Fund may be appropriate for a portion of a retirement plan investment. This Fund
is not a complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in stocks are
subject to changes in their value from a number of factors described below.
There is also the risk that poor security selection by the Fund's portfolio
managers will cause the Fund to underperform other funds having a similar
objective.

     The risks described below collectively form the risk profile of the Fund,
and can affect the value of the Fund's investments, its investment performance
and its prices per share. These risks mean that you can lose money by investing
in the Fund. When you redeem your shares, they may be worth more or less than
what you paid for them. There is no assurance that the Fund will achieve its
investment objective.

RISKS OF INVESTING IN STOCKS. Because the Fund invests primarily in common
stocks of U.S. companies, the value of the Fund's portfolio will be affected by
changes in the U.S. stock markets. Market risk will affect the Fund's net asset
values per share, which will fluctuate as the values of the Fund's portfolio
securities change. The prices of individual stocks do not all move in the same
direction uniformly or at the same time. Different stock markets may behave
differently from each other. Because the Fund can buy U.S. and foreign stocks
and ADRs, it could be affected by changes in domestic and foreign stock markets.

     Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry.

Risks of Foreign Investing. The Fund can invest in foreign securities and in the
securities of foreign issuers in the form of ADRs. It can buy securities of both
foreign governments and companies. While foreign securities may offer special
investment opportunities, they are subject to special risks that can reduce the
Fund's share prices and returns.

      The change in value of a foreign currency against the U.S. dollar will
affect the U.S. dollar value of securities denominated in that foreign currency.
Currency rate changes can also affect the distributions the Fund makes from the
income it receives from foreign securities. Foreign investing can result in
higher transaction and operating costs for the Fund. Foreign issuers are not
subject to the same accounting and disclosure requirements that U.S. companies
are subject to. The value of foreign investments may be affected by exchange
control regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in governmental
economic or monetary policy in the U.S. or abroad, or other political and
economic factors. ADRs may not necessarily be denominated in the same currency
as the securities into which they may be converted.

HOW RISKY IS THE FUND OVERALL? In the short term, the stock markets can be
volatile, and the price of the Fund's shares can go up and down substantially.
Growth stocks may be more volatile than other equity investments. The Fund
generally does not use income-oriented investments to help cushion the Fund's
total return from changes in stock prices. In the OppenheimerFunds spectrum, the
Fund is generally more aggressive than funds that invest in both stocks and
bonds or in investment grade debt securities, but may be less volatile than
small-cap and emerging markets stock funds.

- ------------------------------------------------------------------------------
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
- ------------------------------------------------------------------------------


The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the
Fund, by showing the Fund's performance (for its Class A shares) since the
Fund's inception and by showing how the average annual total returns of the
Fund's shares compare to those of a broad-based market index. The after-tax
returns for the other classes of shares will vary.

      The after-tax returns are shown for Class A shares only and are calculated
using the historical highest individual federal marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. The after-tax returns are calculated based on certain
assumptions mandated by regulation and your actual after-tax returns may differ
from those shown, depending on your individual tax situation. The after-tax
returns set forth below are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or IRAs or to
institutional investors not subject to tax. The Fund's past investment
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future.

Annual Total Returns (Class A)
(as of 12/31 each year)

  [See appendix to prospectus for data in bar chart showing the annual total
                                   return]

Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 2.76% (4thQtr'02) and the lowest return
(not annualized) before taxes for a calendar quarter was -16.89% (2ndQtr'02).


- --------------------------------------------------------------------------------

Average Annual Total Returns                       1 Year          5 Years
                                                                 (or life of
for the periods ended December 31, 2002                        class, if less)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares (inception 2/16/01)
     Return Before Taxes                           -34.79%         -26.54%
     Return After Taxes on Distributions           -34.79%         -26.54%
     Return  After Taxes on  Distributions  and    -21.19%         -20.62%
Sale of Fund Shares

- --------------------------------------------------------------------------------

S&P 500 Index (reflects no deduction for fees,     -22.09%        -15.80%1
expenses or taxes)

- --------------------------------------------------------------------------------

Class B Shares (inception 2/16/01)                 -34.74%         -26.42%

- --------------------------------------------------------------------------------

Class C Shares (inception 2/16/01)                 -31.99%         -24.80%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares (inception 3/1/01)                  -31.65%         -22.59%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares (inception 2/16/01)                 -30.78%         -24.12%

- --------------------------------------------------------------------------------


1From 2/28/01.
The Fund's average annual total returns include applicable sales charges: for
Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 4% (life of class); and for
Class C and Class N, the 1% contingent deferred sales charge for the 1-year
period. There is no sales charge for Class Y. The returns measure the
performance of a hypothetical account and assume that all dividends and capital
gains distributions have been reinvested in additional shares. The performance
of the Fund's Class A shares is compared to the S&P 500 Index, an unmanaged
index of equity securities. The index performance includes reinvestment of
income but does not reflect transaction costs, expenses or taxes. The Fund's
investments vary from those in the index.


Fees and Expenses of the Fund


The following tables are meant to help you understand the fees and expenses you
may pay if you buy and hold shares of the Fund. The Fund pays a variety of
expenses directly for management of its assets, administration, distribution of
its shares and other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset values per share. All shareholders
therefore pay those expenses indirectly. Shareholders pay other expenses
directly, such as sales charges and account transaction charges. The numbers
below are based on the Fund's expenses during its fiscal period ended November
30, 2002.


Shareholder Fees (charges paid directly from your investment):

- ---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or redemption proceeds)
- ---------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first
year after purchase. The contingent deferred sales charge declines to 1% in the
sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

- ----------------------------------------------------------------------
                               Class   Class  Class   Class  Class Y
                               A       B      C       N      Shares
                               Shares  Shares Shares  Shares
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Management Fees                0.95%   0.95%  0.95%   0.95%  0.95%
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------

Distribution and/or Service    0.05%   1.00%  1.00%   0.50%  N/A
(12b-1) Fees

- ----------------------------------------------------------------------
- ----------------------------------------------------------------------

Other Expenses                 0.89%   1.13%  0.91%   1.11%  87.14%

- ----------------------------------------------------------------------
- ----------------------------------------------------------------------

Total Annual Operating         1.89%   3.08%  2.86%   2.56%  88.09%
Expenses

- ----------------------------------------------------------------------


Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund pays. "Other
Expenses" in the table are based on, among other things, the fees the Fund would
have paid if the transfer agent had not waived a portion of its fee under a
voluntary undertaking to the Fund to limit these fees to 0.25% per annum for
Class Y shares and 0.35% per annum for all other classes. "Total Annual
Operating Expenses" were reduced by a voluntary expense assumption undertaking
by the Manager. With that expense assumption and the transfer agent waiver,
"Total Annual Operating Expenses" were 1.39% for Class A, 2.51% for Class B,
2.31% for Class C, 2.01% for Class N and 1.43% for Class Y. Effective November
1, 2002, the limit on transfer agent fees for Class Y shares increased to 0.35%
of average daily net assets per fiscal year. Had that limit been in effect
during the Fund's prior fiscal year, the Class Y "Total Annual Operating
Expenses" as percentage of average daily net assets would have been 1.53%. Those
expense undertakings may be revised or terminated at any time.


EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.

      The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

- --------------------------------------------------------------------------------
If shares are redeemed:   1 Year        3 Years      5 Years       10 Years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $756          $1,135       $1,538        $2,659

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $811          $1,251       $1,816        $2,8591

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $389          $886         $1,509        $3,185

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $359          $796         $1,360        $2,895

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,149        $6,167       $6,196        $10,000

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $756          $1,135       $1,538        $2,659

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $311          $951         $1,616        $2,8591

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $289          $886         $1,509        $3,185

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $259          $796         $1,360        $2,895

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,149        $6,167       $6,196        $10,000

- --------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. There are no sales charges on Class Y shares.

1. Class B expenses for years 7 through 10 are based on Class A expenses,
because Class B shares automatically convert to Class A shares 72 months after
purchase.





Oppenheimer Select Managers - Salomon Brothers All Cap Fund


What is the Fund's Investment Objective? The Fund seeks capital appreciation.


What Does the Fund Mainly Invest In? The Fund is a non-diversified mutual fund
that invests mainly in common stocks and common stock equivalents such as
preferred stocks and securities convertible into common stocks, of companies
Salomon Brothers Asset Management Inc. (the "Subadviser") believes are
undervalued in the marketplace. While the Subadviser selects an investment
primarily for its capital appreciation potential, secondary consideration is
given to a company's dividend record and the potential for an improved dividend
return. The Fund generally invests in securities of large, well-known companies,
but may also invest a significant portion of its assets in securities of small
to medium-sized companies when the Subadviser believes smaller companies offer
more attractive value opportunities. The Fund may invest in non-dividend paying
common stocks.

      The Fund may invest in investment grade fixed-income securities and may
invest up to 20% of its net assets in non-convertible debt securities rated
below investment grade or, if unrated, of equivalent quality as determined by
the Sub-adviser. Debt securities rated below investment grade are normally
referred to as "junk bonds". The Fund may invest without limit in convertible
debt securities of any quality. The Fund may also invest up to 20% of its total
assets in securities of foreign issuers.

How Do The Portfolio Managers Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained the
Subadviser to provide the day-to-day portfolio management of the Fund's assets.
The Fund's portfolio managers are employed by the Subadviser. The Subadviser
employs a two-step stock selection process in its search for undervalued stocks
of temporarily out of favor companies. First, it uses proprietary models and
fundamental research to try to identify stocks that are underpriced in the
market relative to their fundamental value. Next, the Subadviser also emphasizes
companies in those sectors of the economy, which it believes are undervalued
relative to other sectors.

      When evaluating an individual stock, the Subadviser looks for: o Low
market valuations measured by the Subadviser's valuation models, o Positive
changes in earnings prospects because of factors such as:
           New, improved or unique products and services New or rapidly
           expanding markets for the company's products New management Changes
           in the economic, financial, regulatory or political environment
           particularly affecting the company Effective research, product
           development and marketing A business strategy not yet recognized by
           the marketplace.

      The portfolio managers monitor individual issuers for changes in the
factors above and these changes may trigger a decision to sell a security.


Who Is The Fund Designed For? The Fund is designed for investors seeking capital
appreciation over the long term. Those investors should be willing to assume the
risks of short-term share price fluctuations that are typical for a fund
focusing on stock investments. Since the Fund does not seek income and its
income from investments will likely be small, it is not designed for investors
needing current income. Because of its focus on long-term growth, the Fund may
be appropriate for a portion of a retirement plan investment. This Fund is not a
complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in stocks are
subject to changes in their value from a number of factors described below.
There is also the risk that poor security selection by the Fund's portfolio
managers will cause the Fund to underperform other funds having a similar
objective.

     These risks collectively form the risk profile of the Fund, and can affect
the value of the Fund's investments, its investment performance and its prices
per share. These risks mean that you can lose money by investing in the Fund.
When you redeem your shares, they may be worth more or less than what you paid
for them. There is no assurance that the Fund will achieve its investment
objective.

RISKS OF INVESTING IN STOCKS. Because the Fund invests primarily in common
stocks of U.S. companies, the value of the Fund's portfolio will be affected by
changes in the U.S. stock markets. Market risk will affect the Fund's net asset
values per share, which will fluctuate as the values of the Fund's portfolio
securities change. The prices of individual stocks do not all move in the same
direction uniformly or at the same time. Different stock markets may behave
differently from each other.

     Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry.

Industry Focus. At times the Fund may increase the relative emphasis of its
investments in stocks of companies in a single industry. Stocks of issuers in a
particular industry may be affected by changes in economic conditions, changes
in government regulations, availability of basic resources or supplies, or other
events that affect that industry more than others. To the extent that the Fund
increases the relative emphasis of its investments in a particular industry, its
share values may fluctuate in response to events affecting that industry.


Risks of Foreign Investing. The Fund can invest in foreign securities. The Fund
currently does not intend to invest more than 20% of its net assets in foreign
securities. It can buy securities of both foreign governments and companies.
While foreign securities may offer special investment opportunities, they are
subject to special risks that can reduce the Fund's share prices and returns.


      The change in value of a foreign currency against the U.S. dollar will
affect the U.S. dollar value of securities denominated in that foreign currency.
Currency rate changes can also affect the distributions the Fund makes from the
income it receives from foreign securities. Foreign investing can result in
higher transaction and operating costs for the Fund. Foreign issuers are not
subject to the same accounting and disclosure requirements that U.S. companies
are subject to. The value of foreign investments may be affected by exchange
control regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in governmental
economic or monetary policy in the U.S. or abroad, or other political and
economic factors.

Risks of Investing in Debt Securities. Debt securities, such as bonds, involve
credit risk. This is the risk that the borrower will not make timely payments of
principal and interest. The degree of credit risk depends on the issuer's
financial condition and on the terms of the bonds. These securities are also
subject to interest rate risk. There is the risk that the value of the security
may fall when interest rates rise. In general, the market price of debt
securities with longer maturities will go up or down more in response to changes
in interest rates than the market price of shorter term securities.

Risks of Non-Diversification. The Fund is "non-diversified." That means that
compared to funds that are diversified, it can invest a greater portion of its
assets in the securities of one issuer. Having a higher percentage of its assets
invested in the securities of fewer issuers could result in greater fluctuations
of the Fund's share prices due to events affecting a particular issuer.

HOW RISKY IS THE FUND OVERALL? In the short term, the stock markets can be
volatile, and the price of the Fund's shares can go up and down substantially.
Growth stocks may be more volatile than other equity investments. The Fund
generally does not use income-oriented investments to help cushion the Fund's
total return from changes in stock prices. The Fund focuses investments in a
limited number of issuers and is non-diversified. It will therefore be
vulnerable to the effects of economic changes that affect those issuers. In the
OppenheimerFunds spectrum, the Fund is generally more aggressive than funds that
invest in bonds or in investment grade debt securities, but may be less volatile
than small-cap and emerging markets stock funds.

- ------------------------------------------------------------------------------
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
- ------------------------------------------------------------------------------


The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the
Fund, by showing the Fund's performance (for its Class A shares) since the
Fund's inception and by showing how the average annual total returns of the
Fund's shares compare to those of a broad-based market index. The after-tax
returns for the other classes of shares will vary.

      The after-tax returns are shown for Class A shares only and are calculated
using the historical highest individual federal marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. The after-tax returns are calculated based on certain
assumptions mandated by regulation and your actual after-tax returns may differ
from those shown, depending on your individual tax situation. The after-tax
returns set forth below are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or IRAs or to
institutional investors not subject to tax. The Fund's past investment
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future.

Annual Total Returns (Class A)
(as of 12/31 each year)

  [See appendix to prospectus for data in bar chart showing the annual total
                                   return]

Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 11.84% (4thQtr'02) and the lowest return
(not annualized) before taxes for a calendar quarter was -18.34% (3rdQtr'02).


- --------------------------------------------------------------------------------

Average Annual Total Returns                       1 Year          5 Years
                                                                 (or life of
for the periods ended December 31, 2002                        class, if less)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares (inception 2/16/01)
     Return Before Taxes                           -26.57%         -17.26%
     Return After Taxes on Distributions           -26.57%         -17.41%
     Return After Taxes on  Distributions  and     -16.18%         -13.63%
Sale of Fund Shares

- --------------------------------------------------------------------------------

Russell 3000 Index (reflects no deduction for      -21.54%         -15.19%1
fees, expenses or taxes)

- --------------------------------------------------------------------------------

Class B Shares (inception 2/16/01)                 -26.50%         -17.11%

- --------------------------------------------------------------------------------

Class C Shares (inception 2/16/01)                 -23.52%         -15.32%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares (inception 3/1/01)                  -23.07%         -14.45%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares (inception 2/16/01)                 -21.59%         -14.25%

- --------------------------------------------------------------------------------


1From 2/28/01.
The Fund's average annual total returns include applicable sales charges: for
Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 4% (life of class); and for
Class C and Class N, the 1% contingent deferred sales charge for the 1-year
period. There is no sales charge for Class Y. The returns measure the
performance of a hypothetical account and assume that all dividends and capital
gains distributions have been reinvested in additional shares. The performance
of the Fund's Class A shares is compared to the Russell 3000 Index, an unmanaged
index of large-capitalization U.S. companies. The index performance includes
reinvestment of income but does not reflect transaction costs, expenses or
taxes. The Fund will have investments that vary from those in the index.


Fees and Expenses of the Fund


The following tables are meant to help you understand the fees and expenses you
may pay if you buy and hold shares of the Fund. The Fund pays a variety of
expenses directly for management of its assets, administration, distribution of
its shares and other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset values per share. All shareholders
therefore pay those expenses indirectly. Shareholders pay other expenses
directly, such as sales charges and account transaction charges. The numbers
below are based on the Fund's expenses during its fiscal period ended November
30, 2002.


Shareholder Fees (charges paid directly from your investment):

- ---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or redemption proceeds)
- ---------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

- ----------------------------------------------------------------------
                               Class   Class  Class   Class  Class Y
                               A       B      C       N      Shares
                               Shares  Shares Shares  Shares
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
Management Fees                1.10%   1.10%  1.10%   1.10%  1.10%
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------

Distribution and/or Service    0.13 %  1.00%  1.00%   0.50%  N/A
(12b-1) Fees

- ----------------------------------------------------------------------
- ----------------------------------------------------------------------

Other Expenses                 0.62%   0.65%  0.62%   0.63%  86.49%

- ----------------------------------------------------------------------
- ----------------------------------------------------------------------

Total Annual Operating         1.85%   2.75%  2.72%   2.23%  87.59%
Expenses

- ----------------------------------------------------------------------

Expenses may vary in future years. "Other Expenses" include transfer agent fees,
custodial fees, and accounting and legal expenses that the Fund paid. "Other
Expenses" in the table are based on, among other things, the fees the Fund would
have paid if the transfer agent had not waived a portion of its fee under a
voluntary undertaking to the Fund to limit these fees to 0.25% per annum for
Class Y shares and 0.35% per annum for all other classes. "Total Annual
Operating Expenses" were reduced by a voluntary expense assumption undertaking
by the Manager. With that expense assumption and the transfer agent waiver,
"Total Annual Operating Expenses" were 1.59% for Class A, 2.44% for Class B,
2.41% for Class C, 1.98% for Class N and 1.12% for Class Y. Effective November
1, 2002, the limit on transfer agent fees for Class Y shares increased to 0.35%
of average daily net assets per fiscal year. Had that limit been in effect
during the Fund's prior fiscal year, the Class Y "Total Annual Operating
Expenses" as percentage of average daily net assets would have been 1.22%. Those
expense undertakings may be revised or terminated at any time.


EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.

      The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

- --------------------------------------------------------------------------------
If shares are redeemed:   1 Year        3 Years      5 Years       10 Years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $752          $1,123       $1,518        $2,619

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $778          $1,153       $1,654        $2,6661

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $375          $844         $1,440        $3,051

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $326          $697         $1,195        $2,565

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,142        $6,193       $6,225        $10,000

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $752          $1,123       $1,518        $2,619

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $278          $853         $1,454        $2,6661

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $275          $844         $1,440        $3,051

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $226          $697         $1,195        $2,565

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,142        $6,193       $6,225        $10,000

- --------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. There are no sales charges on Class Y shares.

1. Class B expenses for years 7 through 10 are based on Class A expenses,
because Class B shares automatically convert to Class A shares 72 months after
purchase.





Oppenheimer Select Managers -
Gartmore Millennium Growth Fund II

What is the Fund's Investment Objective? The Fund seeks long-term capital
appreciation.

What Does the Fund Mainly Invest In? The Fund invests primarily in securities of
growth companies that are creating fundamental changes in the economy.
Typically, these companies are characterized by new or innovative products,
services or processes, with the potential to enhance earnings growth. Growth in
earnings may lead to an increase in the price of the stock. The Fund can invest
in companies of any size but primarily focuses on securities of small to mid
sized companies.


      The Fund has the ability to have up to 20% of its total assets in short
positions.


How Does the Portfolio Manager Decide What Securities To Buy or Sell? The Fund's
investment adviser, OppenheimerFunds, Inc. (the "Manager") has retained Gartmore
Mutual Fund Capital Trust (the "Subadviser") to provide the day-to-day portfolio
management of the Fund's assets. The Fund's portfolio managers are employed by
the Subadviser. In analyzing specific companies for possible investment, the
Fund's portfolio managers ordinarily perform an assessment of companies focusing
on the following characteristics.:

      o  Global capacity.
      o  Market leadership.
      o  Brand and reputation.
      o Management capability regarding innovation, execution and acquisition.

      It generally will sell securities if the portfolio manager believes: o the
price of the security is overvalued o the company's earnings are consistently
lower than expected o more favorable opportunities are identified


      The portfolio managers monitor individual issuers for changes in the
factors above and these changes may trigger a decision to sell a security.


Who is the Fund Designed For? The Fund is designed primarily for investors
seeking long-term capital appreciation. Those investors should be willing to
assume the greater risks of short-term share price fluctuations that are typical
for an aggressive growth fund. The Fund does not seek current income and the
income from its investments will likely be small. It is not designed for
investors needing current income or preservation of capital. Because of its
focus on long-term capital appreciation, the Fund may be appropriate for a
portion of a retirement plan investment. This Fund is not a complete investment
program.

Main Risks of Investing in the Fund

All investments have risks to some degree. The Fund's investments in stocks are
subject to changes in their value from a number of factors described below.
There is also the risk that poor security selection by the Fund's portfolio
manager will cause the Fund to underperform other funds having similar
objectives.

      The risks described below collectively form the risk profile of the Fund,
and can affect the value of the Fund's investments, its investment performance
and its prices per share. Particular investments and investment strategies also
have risks. These risks mean that you can lose money by investing in the Fund.
When you redeem your shares, they may be worth more or less than what you paid
for them. There is no assurance that the Fund will achieve its investment
objective.

RISKS OF INVESTING IN STOCKS. Stocks fluctuate in price, and their short-term
volatility at times may be great. Because the Fund invests primarily in common
stocks, the value of the Fund's portfolio will be affected by changes in the
stock markets. Market risk will affect the Fund's net asset value per share,
which will fluctuate as the values of the Fund's portfolio securities change. A
variety of factors can affect the price of a particular stock and the prices of
individual stocks do not all move in the same direction uniformly or at the same
time. Different stock markets may behave differently from each other.

      Other factors can affect a particular stock's price, such as poor earnings
reports by the issuer, loss of major customers, major litigation against the
issuer, or changes in government regulations affecting the issuer or its
industry.

Industry and Sector Focus. At times the Fund may increase the relative emphasis
of its investments in a particular industry or sector. The prices of stocks of
issuers in a particular industry or sector may go up and down in response to
changes in economic conditions, government regulations, availability of basic
resources or supplies, or other events that affect that industry or sector more
than others. To the extent that the Fund increases the relative emphasis of its
investments in a particular industry or sector, its share values may fluctuate
in response to events affecting that industry or sector.

Risks of Growth Stocks. Stocks of growth companies, particularly newer
companies, may offer opportunities for greater long-term capital appreciation
but may be more volatile than stocks of larger, more established companies. They
have greater risks if the company's earnings growth or stock price fails to
increase as expected.


Risks of Foreign Investing. The Fund can invest without limit in foreign
securities. The Fund currently does not intend to invest more than 25% of its
net assets in foreign securities. It can buy securities of both foreign
governments and companies. While foreign securities may offer special investment
opportunities, they are subject to special risks that can reduce the Fund's
share prices and returns.


      The change in value of a foreign currency against the U.S. dollar will
affect the U.S. dollar value of securities denominated in that foreign currency.
Currency rate changes can also affect the distributions the Fund makes from the
income it receives from foreign securities. Foreign investing can result in
higher transaction and operating costs for the Fund. Foreign issuers are not
subject to the same accounting and disclosure requirements that U.S. companies
are subject to. The value of foreign investments may be affected by exchange
control regulations, expropriation or nationalization of a company's assets,
foreign taxes, delays in settlement of transactions, changes in governmental
economic or monetary policy in the U.S. or abroad, or other political and
economic factors.

HOW RISKY IS THE FUND OVERALL? The Fund focuses its investments on equity
securities of growth companies for long-term capital appreciation, and in the
short term, they can be volatile. The price of the Fund's shares can go up and
down substantially. The Fund generally does not use income-oriented investments
to help cushion the Fund's total return from changes in stock prices, except for
defensive purposes. Foreign securities can be volatile, and the price of the
Fund's shares can go up and down because of events affecting foreign markets or
issuers. In the OppenheimerFunds spectrum, the Fund is an aggressive investment
vehicle, designed for investors willing to assume greater risks in the hope of
achieving greater gains. In the short-term the Fund may be less volatile than
small-cap and emerging markets stock funds, but it may be subject to greater
fluctuations in its share prices than funds that emphasize large capitalization
stocks, or funds that focus on both stocks and bonds.

- ------------------------------------------------------------------------------
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
- ------------------------------------------------------------------------------


The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in the
Fund, by showing the Fund's performance (for its Class A shares) since the
Fund's inception and by showing how the average annual total returns of the
Fund's shares compare to those of a broad-based market index. The after-tax
returns for the other classes of shares will vary.

      The after-tax returns are shown for Class A shares only and are calculated
using the historical highest individual federal marginal income tax rates in
effect during the periods shown, and do not reflect the impact of state or local
taxes. In certain cases, the figure representing "Return After Taxes on
Distributions and Sale of Fund Shares" may be higher than the other return
figures for the same period. A higher after-tax return results when a capital
loss occurs upon redemption and translates into an assumed tax deduction that
benefits the shareholder. The after-tax returns are calculated based on certain
assumptions mandated by regulation and your actual after-tax returns may differ
from those shown, depending on your individual tax situation. The after-tax
returns set forth below are not relevant to investors who hold their fund shares
through tax-deferred arrangements such as 401(k) plans or IRAs or to
institutional investors not subject to tax. The Fund's past investment
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future.

Annual Total Returns (Class A)
(as of 12/31 each year)

  [See appendix to prospectus for data in bar chart showing the annual total
                                   return]

Sales charges and taxes are not included in the calculations of return in this
bar chart, and if those charges and taxes were included, the returns may be less
than those shown.
During the period shown in the bar chart, the highest return (not annualized)
before taxes for a calendar quarter was 1.51% (4thQtr'02) and the lowest return
(not annualized) before taxes for a calendar quarter was -16.71% (2ndQtr'02).


- --------------------------------------------------------------------------------

Average Annual Total Returns                       1 Year          5 Years
                                                                 (or life of
for the periods ended December 31, 2002                        class, if less)

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares (inception 2/16/01)
     Return Before Taxes                          -33.51%          -30.32%
     Return After Taxes on Distributions          -33.51%          -30.32%
     Return After Taxes on  Distributions  and    -20.41%          -23.42%
Sale of Fund Shares

- --------------------------------------------------------------------------------

Russell MidCap Growth Index (reflects no          -27.41%         -20.08%1
deduction for fees, expenses or taxes)

- --------------------------------------------------------------------------------

Class B Shares (inception 2/16/01)                -33.63%          -30.19%

- --------------------------------------------------------------------------------

Class C Shares (inception 2/16/01)                -30.74%          -28.65%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares (inception 3/1/01)                 -30.36%          -24.90%

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares (inception 2/16/01)                -29.37%          -27.94%

- --------------------------------------------------------------------------------


1From 2/28/01.
The Fund's average annual total returns include applicable sales charges: for
Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 4% (life of class); and for
Class C and Class N, the 1% contingent deferred sales charge for the 1-year
period. There is no sales charge for Class Y. The returns measure the
performance of a hypothetical account and assume that all dividends and capital
gains distributions have been reinvested in additional shares. The performance
of the Fund's Class A shares is compared to the Russell MidCap Growth Index, an
unmanaged index which measures the performance of those Russell Midcap companies
with higher price-to-book ratios and higher forecasted growth values. The index
performance includes reinvestment of income but does not reflect transaction
costs, expenses or taxes. The Fund will have investments that vary from those in
the index.


Fees and Expenses of the Fund


The following tables are provided to help you understand the fees and expenses
you may pay if you buy and hold shares of the Fund. The Fund pays a variety of
expenses directly for management of its assets, administration, distribution of
its shares and other services. Those expenses are subtracted from the Fund's
assets to calculate the Fund's net asset value per share. All shareholders
therefore pay those expenses indirectly. Shareholders pay other expenses
directly, such as sales charges and account transaction charges. The numbers
below are based on the Fund's expenses during its fiscal period ended November
30, 2002.


Shareholder Fees (charges paid directly from your investment):

- ---------------------------------------------------------------------------------
                                     Class   Class B  Class C  Class N  Class Y
                                     A       Shares   Shares   Shares   Shares
                                     Shares
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Sales Charge (Load) on
purchases                            5.75%   None     None     None     None
(as % of offering price)
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
Maximum Deferred Sales Charge (Load)
(as % of the lower of the original   None1   5%2      1%3      1%4      None
offering
price or redemption proceeds)
- ---------------------------------------------------------------------------------
1. A contingent deferred sales charge may apply to redemptions of investments of
$1 million or more ($500,000 for certain retirement plan accounts) of Class A
shares. See "How to Buy Shares" for details.
2. Applies to redemptions in first year after purchase. The contingent deferred
sales charge declines to 1% in the sixth year and is eliminated after that.
3. Applies to shares redeemed within 12 months of purchase.
4. Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N shares.


Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

- -------------------------------------------------------------------------------
                                Class A  Class B   Class C   Class N  Class Y
                                Shares   Shares    Shares    Shares   Shares
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Management Fees                 1.20%    1.20%     1.20%     1.20%    1.20%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Distribution and/or Service     0.02%    1.00%     1.00%     0.50%    N/A
(12b-1) Fees

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Other Expenses                  1.02%    1.46%     1.31%     1.44%    87.49%

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

Total Annual Operating Expenses 2.24%    3.66%     3.51%     3.14%    88.69%

- -------------------------------------------------------------------------------

Expenses may vary in future years. "Other Expenses" include agent fees,
custodial fees, and accounting and legal expenses that the Fund pays. "Other
Expenses" in the table are based on, among other things, the fees the Fund would
have paid if the transfer agent had not waived a portion of its fee under a
voluntary undertaking to the Fund to limit these fees to 0.25% per annum for
Class Y shares and 0.35% per annum for all other classes. "Total Annual
Operating Expenses" were reduced by a voluntary expense assumption undertaking
by the Manager. With that expense assumption and the transfer agent waiver,
"Total Annual Operating Expenses" were 1.73% for Class A, 2.77% for Class B,
2.79% for Class C, 2.28% for Class N and 1.62% for Class Y. Effective November
1, 2002, the limit on transfer agent fees for Class Y shares increased to 0.35%
of average daily net assets per fiscal year. Had that limit been in effect
during the Fund's prior fiscal year, the Class Y "Total Annual Operating
Expenses" as percentage of average daily net assets would have been 1.72%. Those
expense undertakings may be revised or terminated at any time.


EXAMPLES. The following examples are intended to help you compare the cost of
investing in the Fund with the cost of investing in other mutual funds. The
examples assume that you invest $10,000 in a class of shares of the Fund for the
time periods indicated and reinvest your dividends and distributions.

      The first example assumes that you redeem all of your shares at the end of
those periods. The second example assumes that you keep your shares. Both
examples also assume that your investment has a 5% return each year and that the
class's operating expenses remain the same. Your actual costs may be higher or
lower because expenses will vary over time. Based on these assumptions your
expenses would be as follows:

- --------------------------------------------------------------------------------
If shares are redeemed:   1 Year        3 Years      5 Years       10 Years
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $789          $1,235       $1,706        $3,002

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $868          $1,420       $2,092        $3,3111

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $454          $1,077       $1,822        $3,783

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $417          $969         $1,645        $3,448

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,158        $6,136       $6,162        $10,000

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
If shares are not         1 Year        3 Years      5 Years       10 Years
redeemed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class A Shares            $789          $1,235       $1,706        $3,002

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class B Shares            $368          $1,120       $1,892        $3,3111

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class C Shares            $354          $1,077       $1,822        $3,783

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class N Shares            $317          $969         $1,645        $3,448

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Class Y Shares            $5,158        $6,136       $6,162        $10,000

- --------------------------------------------------------------------------------
In the first example, expenses include the initial sales charge for Class A and
the applicable Class B, Class C or Class N contingent deferred sales charges. In
the second example, the Class A expenses include the sales charge, but Class B,
Class C and Class N expenses do not include the contingent deferred sales
charges. There are no sales charges on Class Y shares.

1. Class B expenses for years 7 through 10 are based on Class A expenses,
because Class B shares automatically convert to Class A shares 72 months after
purchase.





About the Funds' Investments

THE FUNDS' PRINCIPAL INVESTMENT POLICIES. The allocation of each Fund's (except
the OSM - Mercury Advisors S&P 500 Index Fund) portfolio among different
investments will vary over time based on the portfolio manager's evaluation of
economic and market trends. Each Fund's portfolio might not always include all
of the different types of investments described below. The Statement of
Additional Information contains more detailed information about the Funds'
investment policies and risks.


     The Adviser or the Subadvisers, as the case may be, may try to reduce risks
for each Fund (except the OSM - Mercury Advisors  S&P 500 Index Fund) by
carefully researching securities before they are purchased. Each Fund other than
the OSM -  Mercury  Advisors  Focus  Growth  Fund,  the OSM -  Mercury  Advisors
S&P  500  Index  Fund and the OSM - Salomon  Brothers  All Cap Fund is a
diversified  fund and  attempts  to  reduce  its  exposure  to  market  risks by
diversifying  its investments,  that is, by not holding a substantial  amount of
stock of any one  company and by not  investing  too great a  percentage  of the
Fund's assets in any one company.  Also,  each Fund does not  concentrate 25% or
more of its assets in investments in any one industry.  However,  in replicating
the weighting of a particular industry in the S&P 500, the OSM - Mercury
Advisors S&P 500 Index Fund may invest more than 25% of its total assets
in securities of issuers in that industry.


     However, changes in the overall market prices of securities and the income
they pay can occur at any time. The share prices of each Fund will change daily
based on changes in market prices of securities and market conditions and in
response to other economic events.


Stock Investments. The OSM - Mercury Advisors Focus Growth Fund, OSM - Jennison
      Growth Fund, OSM - Gartmore Millennium Growth Fund II and the OSM -
      Salomon Brothers All Cap Fund currently focus on more established U.S.
      companies. Growth companies, for example, may be developing new products
      or services, or they may be expanding into new markets for their products.
      Newer growth companies tend to retain a large part of their earnings for
      research, development or investment in capital assets. Therefore, they
      often do not tend to emphasize paying dividends and may not pay any
      dividends for some time. The portfolio managers for each of these Funds
      look for stocks of growth companies for each Fund's portfolio that they
      believe will increase in value over time.

      The OSM - Mercury Advisors Focus Growth Fund and the OSM - Jennison Growth
      Fund do not limit their investments to issuers in a particular market
      capitalization range or ranges. However, the OSM - Mercury Advisors Focus
      Growth Fund currently emphasizes common stocks of large-cap issuers and
      the OSM - Jennison Growth Fund currently focuses on mid cap and large cap
      issuers. The OSM - QM Active Balanced Fund, the OSM - Salomon Brothers All
      Cap Fund, and the OSM - Gartmore Millennium Growth Fund II may invest in
      the common stocks of companies of every size, small, medium and large
      capitalization. "Market capitalization" refers to the total market value
      of an issuer's common stock. The stock prices of large cap issuers tend to
      be less volatile than the prices of midcap and small cap companies in the
      short term, but these companies may not afford the same growth
      opportunities as midcap and small cap companies.

Portfolio Turnover. A change in the securities held by each Fund is known as
      "portfolio turnover." Each Fund, with the exception of the OSM - Mercury
      Advisors S&P 500 Index Fund, may engage in short-term trading to
      try to achieve its objective. Each Fund other than the OSM - Mercury Advisors
      S&P 500 Index Fund might have a turnover rate in excess of 100%
      annually, which may be considered high. Portfolio turnover affects
      brokerage costs the Funds pay. Because the OSM - Mercury Advisors
      S&P 500 Index Fund employs a passive investment approach, it is
      anticipated that its portfolio turnover and trading costs will be lower
      than "actively" managed funds. If a Fund realizes capital gains when it
      sells its portfolio investments, it must generally pay those gains out to
      the shareholders, increasing non-retirement plan or non-IRA or
      non-education savings account shareholders' taxable distributions.


Cyclical Opportunities. Each Fund (other than the OSM - Mercury Advisors S&P
      500 Index Fund) may also seek to take advantage of changes in the business
      cycle by investing in companies that are sensitive to those changes if the
      respective Adviser or Subadviser believes they have growth potential. For
      example, when the economy is expanding, companies in the consumer durables
      and technology sectors may benefit and offer long-term growth
      opportunities. Other cyclical industries include insurance and forest
      products, for example. Those Funds focus on seeking growth over the long
      term, but may seek to take tactical advantage of short-term market
      movements or events affecting particular issuers or industries.


Debt  Securities. The OSM - QM Active Balanced Fund, the OSM - Jennison Growth
      Fund and the OSM - Salomon Brothers All Cap Fund may invest in corporate
      bond obligations, as well as government obligations and mortgage-related
      securities. The weighted average maturity of the debt securities held by
      the OSM - QM Active Balanced Fund will normally be between three and
      thirty years. Debt securities are selected primarily for their income
      possibilities and their relative emphasis in the portfolio may be greater
      when the stock market is volatile. For example, when interest rates are
      falling, or when the credit quality of a particular issuer is improving,
      the portfolio manager might buy debt securities for their own appreciation
      possibilities. The Funds have no limit on the range of maturities of the
      debt securities they can buy.

      The Subadvisers for the OSM - QM Active Balanced Fund, the OSM - Jennison
      Growth Fund and the OSM - Salomon Brothers All Cap Fund do not rely solely
      on ratings by rating organizations in selecting debt securities, but also
      use their own judgment to evaluate particular issues as well as business
      and economic factors affecting an issuer. The debt securities those Funds
      buy may be rated by nationally-recognized rating organizations or they may
      be unrated securities assigned a rating by the respective Sub-Adviser.

      The investments in debt securities by the OSM - QM Active Balanced Fund
      and the OSM - Salomon Brothers All Cap Fund, including convertible
      securities, can be above or below investment grade in quality.
      "Investment-grade" securities are those rated in the four highest rating
      categories by Moody's Investors Service or other rating organizations, or,
      if unrated, assigned a comparable rating by the respective Sub-Adviser. A
      list of the ratings definitions of the principal ratings organizations is
      in Appendix A to the Statement of Additional Information.


      The OSM - Mercury Advisors Focus Growth Fund may invest in investment
      grade, non-convertible debt securities and U.S. Government securities of
      any maturity, although typically not to a significant degree.

      Debt securities, such as bonds, involve credit risk. This is the risk that
      the borrower will not make timely payments of principal and interest. The
      degree of credit risk depends on the issuer's financial condition and on
      the terms of the bonds. These securities are also subject to interest rate
      risk. This is the risk that the value of the security may fall when
      interest rates rise. In general, the market price of debt securities with
      longer maturities will go up or down more in response to changes in
      interest rates than the market price of shorter term debt securities.


CAN EACH FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE? The Trust's Board of
Trustees can change non-fundamental investment policies for each Fund without
shareholder approval, although significant changes will be described in
supplements to this Prospectus. The OSM - Mercury Advisors S&P 500 Index
Fund's non-fundamental policy of investing at least 80% of its net assets (plus
borrowings for investment purposes) in securities or other financial instruments
in, or correlated with, the S&P 500 will not be changed by the Fund's
Trustees without first providing shareholders 60 days written notice.
Non-fundamental policies of the OSM - Mercury Advisors S&P 500 Index Fund
and the OSM - Mercury Advisors Focus Growth Fund can be changed by the Board of
Trustees of the Trust or the Board of Trustees of the Master Funds without
shareholder approval.  Fundamental policies are those that cannot be changed
without the approval of a majority of each Fund's outstanding voting shares, as
defined in the Investment Company Act of 1940, as amended. With the exception of
the OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Gartmore
Millennium Growth Fund II, each Fund's objective is a fundamental policy. The
OSM - Mercury Advisors S&P 500 Index Fund's objective is a non-fundamental
policy which may be changed at any time by the Board of Trustees of the Trust or
the Board of Trustees of the Master Fund without shareholder approval. The OSM -
Gartmore Millennium Growth Fund's objective is a non-fundamental policy which
may be changed at any time by the Trust's Board of Trustees without shareholder
approval. Other investment restrictions that are fundamental policies are listed
in the Statement of Additional Information. An investment policy or technique is
not fundamental unless this Prospectus or the Statement of Additional
Information says that it is.


OTHER INVESTMENT STRATEGIES. To seek its objective, each Fund can also use some
or all of the investment techniques and strategies described below. A Fund might
not always use all of the different types of techniques and investments
described below. These techniques have certain risks, although some are designed
to help reduce overall investment or market risks.


Forward Rolls. OSM - QM Active Balanced Fund may enter into "forward rolls"
      (also referred to as "mortgage dollar rolls") transactions with respect to
      mortgage-related securities. In this type of transaction, the Fund sells a
      mortgage-related security to a buyer and simultaneously agrees to
      repurchase a similar security at a later date at a set price.

      During the period between the sale and the purchase, the Fund will not be
      entitled to receive interest and principal payments on the securities that
      have been sold. It is possible that the market value of the securities the
      Fund sells may decline below the price at which the Fund is obligated to
      repurchase securities, or that the counterparty might default in its
      obligation.

Equity Securities. While the OSM - Mercury Advisors Focus Growth Fund, OSM -
      Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund and the OSM -
      Gartmore Millennium Growth Fund II emphasize investments in common stocks,
      those Funds can also buy preferred stocks, warrants and securities
      convertible into common stock. The Adviser or Subadviser, as the case may
      be, considers some convertible securities to be "equity equivalents"
      because of the conversion feature and in that case their rating may have
      less impact on the investment decision than in the case of other debt
      securities. The OSM - QM Active Balanced Fund may also invest in
      non-convertible preferred stocks and convertible securities, warrants and
      rights. The OSM - Jennison Growth Fund can also invest in warrants and
      rights that can be exercised to obtain stock.


Convertible Securities. Convertible securities are generally debt securities or
      preferred stocks that may be converted into common stock. Convertible
      securities typically pay current income as either interest (debt security
      convertible) or dividends (preferred stocks). A convertible security's
      value usually reflects both the stream of current income payments and the
      value of the underlying common stock. The market value of a convertible
      security performs like a regular debt security, that is, if market
      interest rates rise, the value of a convertible security usually falls.
      Since it is convertible into common stock, the convertible security also
      has the same types of market and issuer risk as the underlying common
      stock.

Warrants. A warrant gives the Fund the right to buy a quantity of stock. The
      warrant specifies the amount of underlying stock, the purchase (or
      "exercise") price, and the date the warrant expires. The Fund has no
      obligation to exercise the warrant and buy the stock.

      A warrant has value only if the Fund exercises it before it expires. If
      the price of the underlying stock does not rise above the exercise price
      before the warrant expires, the warrant generally expires without any
      value and the Fund loses any amount it paid for the warrant. Thus,
      investments in warrants may involve substantially more risk than
      investments in common stock. Warrants may trade in the same markets as
      their underlying stock, however, the price of the warrant does not
      necessarily move with the price of the underlying stock.


Foreign Investing. The OSM - Jennison Growth Fund and the OSM - Salomon Brothers
      All Cap Fund each can invest up to 20% of its total assets in foreign
      securities including foreign equity securities of companies located in any
      country, including developed countries and emerging markets. The OSM - QM
      Active Balanced Fund may invest up to 15% of its total assets in foreign
      equity securities and up to 20% of its total assets in debt securities of
      foreign issuers. The OSM - Gartmore Millennium Growth Fund II may invest
      without limit in foreign securities although it does not intend to invest
      more than 25% of its net assets in foreign securities. The OSM - Mercury
      Advisors Focus Growth Fund may invest without limit in the securities of
      foreign companies in the form of ADRs. In addition, the OSM - Mercury
      Advisors Focus Growth Fund may invest up to 10% of its total assets in
      other forms of securities of foreign companies, including European
      Depository Receipts ("EDRs") or other securities convertible into
      securities of foreign companies. For purposes of these limits, the
      respective Advisers or Subadvisers do not consider ADR's and other similar
      receipts or shares to be foreign securities.


      While foreign securities may offer special investment opportunities, they
      also have special risks that can reduce a Fund's share prices and income.
      The change in value of foreign currency against the U.S. dollar will
      result in a change in the U.S. dollar value of securities denominated in
      that foreign currency. Currency rate changes can also affect the
      distributions a Fund makes from the income it receives from foreign
      securities if foreign currency values change against the U.S. dollar.
      Foreign investing can result in higher transaction and operating costs for
      the Fund investing in them. Foreign issuers are not subject to the same
      accounting and disclosure requirements that U.S. companies are subject to.
      The value of foreign investments may be affected by exchange control
      regulations, expropriation or nationalization of a company's assets,
      foreign taxes, delays in settlement of transactions, changes in
      governmental, economic or monetary policy in the U.S. or abroad, or other
      political and economic factors. The risks of investing in foreign
      securities are generally greater for investments in emerging markets.

Depository Receipts. The OSM - Mercury Advisors Focus Growth Fund, OSM - QM
      Active Balanced Fund and OSM - Jennison Growth Fund may invest in
      securities of foreign issuers in the form of Depository Receipts.
      Depository Receipts involve the same risks as investing directly in
      foreign securities. Those risks are discussed above under "Foreign
      Investing." ADRs are receipts typically issued by an American bank or
      trust company that show evidence of underlying securities issued by a
      foreign corporation. EDRs evidence a similar ownership arrangement. The
      OSM - Mercury Advisors Focus Growth Fund may also invest in unsponsored
      Depository Receipts. The issuers of such unsponsored Depository Receipts
      are not obligated to disclose material information in the United States.
      Therefore, there may be less information available regarding such issuers
      and there may not be a correlation between such information and the market
      value of the Depository Receipts.

Illiquid and Restricted Securities. Investments may be illiquid because of the
      absence of an active trading market. If a Fund buys illiquid securities it
      may be unable to quickly resell them or may be able to sell them only at a
      price below current value. A restricted security is one that has a
      contractual restriction on its resale or which cannot be sold publicly
      until it is registered under the Securities Act of 1933. Each Fund will
      not invest more than 15% of its net assets in illiquid or restricted
      securities. That percentage limitation is not a fundamental policy.
      Certain restricted securities that are eligible for resale to qualified
      institutional purchasers may not be subject to that limit. The respective
      Adviser or Subadviser monitors holdings of illiquid securities on an
      ongoing basis to determine whether to sell any holdings to maintain
      adequate liquidity.

Rule  144A Securities. Rule 144A securities are restricted securities that can
      be resold to qualified institutional buyers but not to the general public.
      Rule 144A securities may have an active trading market, but carry the risk
      that the active trading market may not continue.


Securities Lending. The Fund may lend securities with a value of up to 33-1/3%
      of its total assets to financial institutions that provide cash or
      securities issued or guaranteed by the U.S. government as collateral.
      Securities lending involves the risk that the borrower may fail to return
      the securities in a timely manner or at all. As a result, the Fund may
      lose money and there may be a delay in recovering the loaned securities.
      The Fund could also lose money if it does not recover the securities
      and/or the value of the collateral falls, including the value of
      investments made with cash collateral. These events could trigger adverse
      tax consequences.


Repurchase Agreements; Purchase and Sale Contracts. Each Fund may enter into
      certain types of repurchase agreements and each Fund other than OSM -
      Mercury Advisors S&P 500 Index Fund may enter into purchase and sale
      contracts. Under a repurchase agreement, the seller agrees to repurchase a
      security (typically a security issued or guaranteed by the U.S.
      Government) at a mutually agreed upon time and price. This insulates the
      Fund from changes in the market value of the security during the period,
      except for currency fluctuations. A purchase and sale contract is similar
      to a repurchase agreement, but purchase and sale contracts provide that
      the purchaser receives any interest on the security paid during the
      period. If the seller fails to repurchase the security in either situation
      and the market value declines, the Fund may lose money.


Short Sales. The OSM - Gartmore Millennium Growth Fund II and the OSM - Mercury
      Advisors Focus Growth Fund may invest up to 20% and 5%, respectively, of
      their total assets in short positions. The OSM - Mercury Advisors S&P 500
      Index Fund and the OSM - Jennison Growth Fund may also invest in short
      positions. The Fund may make short sales of securities, either as a hedge
      against potential declines in value of a portfolio security or to realize
      appreciation when a security that the Fund does not own declines in value.
      When the Fund makes a short sale, it borrows the security sold short and
      delivers it to the broker-dealer through which it made the short sale as
      collateral for its obligation to deliver the security upon conclusion of
      the sale. The Fund may have to pay a fee to borrow particular securities
      and is often obligated to turn over any payments received on such borrowed
      securities to the lender of the securities.

      The Fund's obligations to replace the borrowed security will be secured by
      collateral deposited with the broker-dealer, usually cash, U.S. Government
      securities or other liquid securities similar to those borrowed. With
      respect to uncovered short positions, the Fund will also be required to
      deposit similar collateral with its custodian to the extent, if any,
      necessary so that the value of both collateral deposits in the aggregate
      is at all times equal to at least 100% of the current market value of the
      security sold short. Depending on arrangements made with the broker-dealer
      from which it borrowed the security, regarding payment over of any
      payments received by the Fund on such security, the Fund may not receive
      any payments (including interest) on its collateral deposited with such
      broker-dealer.

      The Fund will not make a short sale if, after giving effect to such sale,
      the market value of all securities sold short exceeds 5% of the value of
      its total assets.

      The Fund may also make short sales "against the box" without being subject
      to such limitations. In this type of short sale, at the time of the sale,
      the Fund owns or has the immediate and unconditional right to acquire the
      identical security at no additional cost.

Derivative Investments. Each Fund can invest in a number of different kinds of
      "derivative" investments. Options, futures contracts, structured notes
      such as indexed securities or inverse securities, CMOs and hedging
      instruments are "derivative instruments" the Funds can use. In addition to
      using derivatives for hedging, including anticipatory hedging for the OSM
      - Mercury Advisors Focus Growth Fund and OSM - Mercury Advisors S&P 500
      Index Fund, a Fund might use other derivative investments because they
      offer the potential for increased income and principal value. The Funds
      are not required to use derivative investments in seeking their objective.


      Derivatives have risks. If the issuer of the derivative investment does
      not pay the amount due, the Fund can lose money on the investment. The
      underlying security or investment on which the derivative is based, and
      the derivative itself, may not perform the way the Adviser or Subadviser
      expected it to perform. As a result of these risks a Fund could realize
      less principal or income from the investment than expected or its hedge
      might be unsuccessful. If that happens, the Fund's share prices could
      fall. Certain derivative investments held by a Fund may be illiquid.

      Certain types of investments or trading strategies (such as borrowing
      money to increase the amount of investment) may be subject to leverage
      risk. This means a relatively small market movement may result in large
      changes in the value of an investment. Certain investments or trading
      strategies that involve leverage can result in losses that greatly exceed
      the amount originally invested. Derivatives may be difficult or impossible
      to sell at the time that the seller would like or at the price that the
      seller believes the security is currently worth.


Hedging. Each Fund can buy and sell certain kinds of futures contracts, put and
      call options. In addition, the OSM - Mercury Advisors Focus Growth Fund,
      the OSM - Jennison Growth Fund, the OSM - QM Active Balanced Fund, the OSM
      - Salomon Brothers All Cap Fund and the OSM - Gartmore Millennium Growth
      Fund II may enter into forward contracts. The OSM - Mercury Advisors Focus
      Growth Fund and the OSM - Salomon Brothers All Cap Fund may invest in
      swaps. These are all referred to as "hedging instruments." The Funds do
      not use hedging instruments for speculative purposes. Each Fund has limits
      on the extent of its use of hedging and the types of hedging instruments
      that it can use.


      Some of these strategies could be used to hedge a Fund's portfolio against
      price fluctuations. Other hedging strategies, such as buying futures and
      call options, could increase a Fund's exposure to the securities market.
      Forward contracts can be used to try to manage foreign currency risks on
      the OSM - Jennison Growth Fund's and OSM - Mercury Advisors Focus Growth
      Fund's foreign investments. Foreign currency options can be used to try to
      protect against declines in the dollar value of foreign securities the OSM
      - Jennison Growth Fund, the OSM - Gartmore Millennium Growth Fund II or
      the OSM - Mercury Advisors Focus Growth Fund owns, or to protect against
      an increase in the dollar cost of buying foreign securities.

      There are also special risks in particular hedging strategies. Options
      trading involves the payment of premiums and has special tax effects on a
      Fund. If the Adviser or Sub-Adviser used a hedging instrument at the wrong
      time or judged market conditions incorrectly, the hedge might fail and the
      strategy could reduce the respective Fund's return. Each Fund could also
      experience losses if the prices of its futures and options positions were
      not correlated with its other investments or if it could not close out a
      position because of an illiquid market.


Temporary Defensive and Interim Investments. In times of unstable or adverse
      market or economic conditions, the OSM - Mercury Advisors Focus Growth
      Fund, OSM - QM Active Balanced Fund, OSM - Jennison Growth Fund, OSM -
      Salomon Brothers All Cap Fund, and the OSM - Gartmore Millennium Growth
      Fund II can invest up to 100% of their assets in temporary defensive
      investments that are inconsistent with the Funds' principal investment
      strategies and the OSM - Mercury Advisors Focus Growth Fund can invest up
      to 35% of its assets in temporary defensive investments that are
      inconsistent with the Fund's principal investment strategies. Generally
      they would be cash equivalents (such as commercial paper), money market
      instruments, short-term debt securities, U.S. government securities,
      repurchase agreements, or purchase and sales contracts. They could include
      other investment grade debt securities. The Funds can also invest in such
      short-term securities for cash management purposes. To the extent a Fund
      invests in these securities, either defensively or for cash management
      purposes, the Fund's positions may be inconsistent with its principal
      investment strategies and the Fund might not achieve its investment
      objective.


How the Funds Are Managed


      OppenheimerFunds, Inc. supervises the investment program and handles the
day-to-day administrative business of the OSM - QM Active Balanced Fund, OSM -
Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore
Millennium Growth Fund II. OppenheimerFunds, Inc. carries out its duties,
subject to the policies established by the Trust's Board of Trustees, under an
investment advisory agreement that states OppenheimerFunds, Inc.'s
responsibilities. The agreement sets the fees each Fund pays to
OppenheimerFunds, Inc. and describes the expenses that each Fund is responsible
to pay to conduct its business.


      OppenheimerFunds, Inc. also selects, contracts with and compensates
sub-advisers to manage the investment and reinvestment of the assets of those
Funds of the Trust. OppenheimerFunds, Inc. does not manage any of the Funds'
portfolio assets. OppenheimerFunds, Inc. also (i) monitors the compliance of the
Adviser or Subadvisers with the investment objectives and related policies of
each Fund, (ii) reviews the performance of the Sub-advisers and (iii) reports
periodically on such performance to the Trustees of the Trust.


      The Trust and OppenheimerFunds, Inc. have received an order from the
Securities and Exchange Commission to permit OppenheimerFunds, Inc. to appoint a
Subadviser or change the terms of a Subadvisory Agreement for a subadvised Fund
without first obtaining shareholder approval. That means the Trust will be able
to change subadvisers or the fees paid to subadvisers from time to time without
the expense and delays associated with obtaining shareholder approval of the
change.

      OppenheimerFunds, Inc. has been an investment adviser since January 1960.
OppenheimerFunds, Inc. and its subsidiaries and controlled affiliates managed
assets of more than $120 billion in assets as of December 31, 2002, including
other Oppenheimer funds with more than 7 million shareholder accounts.
OppenheimerFunds, Inc. is located at 498 Seventh Avenue, 10th Floor, New York,
New York 10018.

      OppenheimerFunds, Inc. has entered into an Administration Agreement with
the Trust on behalf of the OSM - Mercury Advisors S&P 500 Index Fund and the
OSM - Mercury Advisors Focus Growth Fund whereby OppenheimerFunds, Inc. will
maintain certain books and records on behalf of those Funds and prepare certain
reports. OppenheimerFunds, Inc. shall also be responsible for filing with the
Securities and Exchange Commission and any state securities regulators certain
disclosure documents. Under the Agreement, both Funds pay an Administration Fee
to OppenheimerFunds, Inc. of 0.50% of the average annual net assets of each such
Fund.


      Fund Asset Management, L.P., doing business as Mercury Advisors (the
"Adviser"), has entered into a sub-administration agreement with
OppenheimerFunds, Inc. Under that agreement, the Adviser maintains certain books
and records and prepares certain reports on behalf of the OSM - Mercury Advisors
S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund.

      OppenheimerFunds, Inc. has also entered into an investment advisory
agreement similar to those described above, with the Trust on behalf of the OSM
- - Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus
Growth Fund. If the Board determines that the assets of the OSM - Mercury
Advisors S&P 500 Index Fund or the OSM - Mercury Advisors Focus Growth Fund
should not be invested exclusively in the applicable Master Fund, or if either
Fund's ability to invest in the applicable Master Fund is terminated, then
OppenheimerFunds, Inc. will assume the role of adviser to those Funds under that
investment advisory agreement. Under that agreement, the OSM - Mercury Advisors
S&P 500 Index Fund would pay to OppenheimerFunds, Inc. an advisory fee of
0.55% on an annual basis and the OSM - Mercury Advisors Focus Growth Fund would
pay an advisory fee of 1.10% on an annual basis. If OppenheimerFunds, Inc.
assumes the role of adviser for OSM - Mercury Advisors Focus Growth Fund or
OSM - Mercury Advisors S&P 500 Index Fund, the administration and
sub-administration arrangements with respect to the applicable Fund will be
terminated since administrative services would be provided through the
investment advisory agreements.


      The Adviser supervises the investment program and handles the day-to-day
business of the Master S&P 500 Index Series of the Quantitative Master Series
Trust and the Master Focus Twenty Trust, the Master Funds in which the OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus
Growth Fund, respectively, invest. The Adviser carries out its duties, subject
to the policies established by the Board of Trustees of the applicable Master
Fund, under an investment advisory agreement with the Master Fund that states
the Adviser's responsibilities. Such agreement sets the fees the Master Fund
pays to the Adviser, and describes the expenses that the Master Fund is
responsible to pay to conduct its business. The Adviser has entered into a
contractual arrangement that provides that the management fee for the Master
S&P 500 Index Series, when combined with administrative fees of certain
funds that invest in the applicable Master Fund (excluding the OSM - Mercury
Advisors S&P 500 Index Fund), will not exceed the annual rate of 0.005% of
the average daily net assets of the Master Fund. Absent such contractual
arrangement, the management fee payable by the Master S&P 500 Index Series
would be at the annual rate of 0.05%. The Master Focus Twenty Trust pays the
Adviser a management fee at the annual rate of 0.60% of its average daily net
assets. The fees and expenses which each Master Fund pays, including the
management fee it pays to the Adviser, are passed directly through to the
relevant Fund in proportion to the number of shares of the Master Fund owned by
that Fund.

      The Adviser was organized as an investment adviser in 1977 and offers
investment advisory services to more than 50 registered investment companies.
The Adviser and its advisory affiliates had approximately $439 billion in
investment company and other portfolio assets under management as of February
2003.


      The OSM - Mercury Advisors S&P 500 Index Fund is managed by a team of
investment professionals who are employed by Mercury Advisors.


      The portfolio manager for the OSM - Mercury Advisors Focus Growth Fund is
Michael S. Hahn. Mr. Hahn has been Portfolio Manager of the Master Fund and of
OSM - Mercury Advisors Focus Growth Fund since November 6, 2001 and has been a
portfolio manager of Merrill Lynch Investment Managers since 2000 and was
Associate Portfolio Manager of Merrill Lynch Investment Managers from 1999 to
2000. Mr. Hahn was a portfolio manager and analyst for the PBHG family of mutual
funds from 1996 to 1999.


Advisory Fees. Under each Fund's investment advisory agreement (other than OSM -
      Mercury Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus
      Growth Fund), each Fund pays OppenheimerFunds, Inc. (the "Manager") an
      Advisory fee at an annual rate that declines on additional assets as the
      Fund grows. The advisory fees are as follows:

Fund                                Advisory Fee

OSM - QM Active Balanced Fund       0.95% of the first
                                    $300 million of average annual net assets of
                                    the Fund and 0.90% of
                                    average annual net assets in excess of
                                    $300 million.

OSM - Jennison Growth Fund          0.95% of the first $300 million of average
                                    annual net assets of the Fund and 0.90%
                                    of average annual net assets in excess of
                                    $300 million.


OSM - Salomon Brothers All Cap Fund 1.10% of the first $100 million of average
                                    annual net assets of the Fund and 1.00% of
                                    average annual net assets in excess of

                                    $100 million.

OSM - Gartmore Millennium Growth    1.20% of the first $400 million of average
Fund II                             annual net assets of the Fund, 1.10% of the
                                    next $400 million, and 1.00% of average
                                    annual net assets in excess of $800 million.


The   Subadvisers. The Manager has retained Jennison Associates LLC ("Jennison")
      as the Subadviser to provide the day-to-day portfolio management of the
      OSM - Jennison Growth Fund. Jennison is located at 466 Lexington Avenue,
      New York, NY 10017. Jennison is a direct, wholly-owned subsidiary of
      Prudential Investment Management, which is a direct, wholly-owned
      subsidiary of Prudential Asset Management Holding Company, which is a
      direct, wholly-owned subsidiary of Prudential Financial, Inc. Jennison has
      served as an investment adviser since 1969 and has advised investment
      companies since 1990. As of December 31, 2002, Jennison had approximately
      $48 billion in assets under management. The Manager, not the Fund, pays
      Jennison an annual fee based on the Fund's average annual net assets.


      The OSM - Jennison Growth Fund's portfolio managers, Spiros "Sig" Segalas,
      Kathleen McCarragher and Michael Del Balso, are employed by Jennison and
      are the persons primarily responsible for the selection of the Fund's
      portfolio securities.


      Mr. Segalas has been in the investment business for over forty-two years
      and has managed equity portfolios for investment companies since 1990. Mr.
      Segalas is a founding member, Director, President and Chief Investment
      Officer of Jennison. Mr. Segalas received his B.A. from Princeton
      University.

      Ms. McCarragher is a Director and Executive Vice President of Jennison.
      Prior to joining Jennison in 1998 she was a Managing Director and Director
      of Large Cap Growth Equities at Weiss, Peck & Greer L.L.C. Prior to
      1992, Ms. McCarragher served as an analyst, portfolio manager and member
      of the Investment Committee for State Street Research & Management
      Company. She received her B.B.A. from the University of Wisconsin and her
      M.B.A. from Harvard University.


      Mr. Del Balso is a Director and Executive Vice President of Jennison,
      where he has been part of the investment team since 1972. He received his
      B.A. from Yale University and his M.B.A. from Columbia University.


      The Manager has retained Prudential Investment Management as the
      Subadviser to provide the day-to-day portfolio management of the OSM - QM
      Active Balanced Fund. Prudential Investment Management is located at
      Prudential Plaza, 751 Broad Street, Newark, NJ 07102. Prudential
      Investment Management has served as an investment adviser to investment
      companies since 1984, and as of December 31, 2002, had approximately $288
      billion in assets under management. The Manager, not the Fund, pays
      Prudential Investment Management an annual fee based on the Fund's average
      annual net assets.

      The portfolio managers for the QM Active Balanced Fund are Michael
      Lenarcic and John Van Belle. They became the Fund's portfolio managers on
      February 8, 2002. They are employed by Prudential Investment Management
      and are the persons primarily responsible for the selection of the Fund's
      securities. Mr. Lenarcic and Mr. Van Belle are Managing Directors of
      Prudential Investments Quantitative Management, a unit of Prudential
      Investment Management. Mr. Lenarcic is a member of Prudential Investment
      Management's Balanced Portfolio Management Team. Mr. Van Belle is a member
      of Prudential Investments International Asset Allocation Team.

      The Manager has retained Salomon Brothers Asset Management Inc. ("Salomon
      Brothers") as the Subadviser to provide the day-to-day portfolio
      management of the OSM - Salomon Brothers All Cap Fund. Salomon Brothers is
      located at 399 Park Avenue, New York , New York 10022. It is a
      wholly-owned subsidiary of Salomon Smith Barney Holdings Inc., which in
      turn is a wholly-owned subsidiary of Citigroup, Inc. Salomon Brothers has
      served as an investment adviser to investment companies since 1987, and as
      of December 31, 2002, Salomon Brothers and its affiliates managed
      approximately $34.2 billion of assets. The Manager, not the Fund, pays
      Salomon Brothers an annual fee based on the Fund's average annual net
      assets.

      The Fund is team managed by Salomon Brothers. The team has an average of
      26 years of investment experience..


      The Manager has retained Gartmore Mutual Fund Capital Trust ("GMFCT") as
      the Subadviser to provide the day-to-day portfolio management of the OSM -
      Gartmore Millennium Growth Fund II. GMFCT is located at 1200 River Road,
      Conshohocken, PA 19428.


      GMFCT has served as an investment adviser to investment companies since
      1999, and as of December 31, 2002, GMFCT and its affiliates and
      predecessors had approximately $30.3 billion in assets under management.
      The Manager, not the Fund, pays GMFCT an annual fee based on the Fund's
      average annual net assets.


      The Fund's portfolio managers, Aaron Harris (since inception) and Nick
      Ford (since October 1, 2001), are employed by GMFCT and are the persons
      primarily responsible for the selection of the OSM - Gartmore Millennium
      Growth Fund's portfolio securities. Mr. Harris joined GMFCT in April 2000.
      Prior to joining GMFCT, Mr. Harris was a portfolio manager, managing
      portions of several portfolios for Nicholas Applegate Capital Management.
      Mr. Harris manages funds similar to the OSM - Gartmore Millennium Growth
      Fund II and other global technology funds. Mr. Ford joined GMFCT in 1998,
      serving as an investment manager on the U.S. equity team. Prior to joining
      GMFCT, Mr. Ford served as the director of U.S. equities at Clerical
      Medical Investment Group in London. From 1995 to 1996, Mr. Ford was a U.S.
      equities fund manager for Sun Alliance Investment Management.

A B O U T   Y O U R   A C C O U N T

How to Buy Shares


HOW ARE SHARES PURCHASED? Shares of the OSM - Mercury Advisors S&P 500 Index
Fund and the OSM - QM Active Balanced Fund are offered for sale only to
retirement plans. Shares of the other Funds may be purchased by retirement plans
and non-retirement plan investors alike. A retirement plan can buy shares
several ways as described below. References in this Prospectus to "you" or
"your" apply to the retirement plan sponsor, or account owner in the case of an
IRA or 403(b) account. The Funds' Distributor, OppenheimerFunds Distributor,
Inc., may appoint certain servicing agents to accept purchase (and redemption)
orders. The Distributor, in its sole discretion, may reject any purchase order
for the Funds' shares.


      Participants in a qualified retirement plan (e.g., 401(k), profit-sharing
plan or money purchase pension plan) should note that shares of the Funds are
purchased on their behalf by the plan's administrator in accordance with the
respective plan's provisions. Plan participants should contact their Plan
administrator to find out how to instruct the Plan to buy shares of the Funds
for their account. It is the responsibility of the Plan administrator or other
Plan service provider to forward purchase instructions to the Fund's
Distributor. In the case of qualified plans, the following explanation of how to
purchase Fund shares is intended for Plan administrators and Plan service
providers.

BuyingShares Through Your Dealer. You can buy shares through any dealer, broker
      or financial institution that has a sales agreement with the Distributor.
      Your dealer will place your order with the Distributor on your behalf.
BuyingShares Through the Distributor. Complete an OppenheimerFunds New Account
      Application and return it with a check payable to "OppenheimerFunds
      Distributor, Inc." Mail it to P.O. Box 5270, Denver, Colorado 80217. If
      you don't list a dealer on the application, the Distributor will act as
      your agent in buying the shares. However, we recommend that you discuss
      your investment with a financial advisor before you make a purchase to be
      sure that the Fund is appropriate for you.

o     Paying by Federal Funds Wire. Shares purchased through the Distributor may
      be paid for by Federal Funds wire. The minimum investment is $2,500.
      Before sending a wire, call the Distributor's Wire Department at
      1.800.225.5677 to notify the Distributor of the wire and to receive
      further instructions.

o     Buying Shares Through OppenheimerFunds AccountLink. With AccountLink,
      you pay for shares by electronic funds transfers from your bank
      account. Shares are purchased for your account by a transfer of money
      from your bank account through the Automated Clearing House (ACH)
      system. You can provide those instructions automatically, under an
      Asset Builder Plan, described below, or by telephone instructions using
      OppenheimerFunds PhoneLink, also described below. Please refer to
      "AccountLink," below for more details.
o     Buying Shares Through Asset Builder Plans. You may purchase shares of a
      Fund automatically each month from your account at a bank or other
      financial institution under an Asset Builder Plan with AccountLink.
      Details are in the Asset Builder Application and the Statement of
      Additional Information.


WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
   If you establish one of the many types of retirement plan accounts that
      OppenheimerFunds offers, more fully described below under "Special
      Investor Services," you can start your account with as little as $500.
o     By using an Asset Builder Plan or Automatic Exchange Plan (details are in
      the Statement of Additional Information), or government allotment plan,
      you can make subsequent investments (after making the initial investment
      of $500) for as little as $50. For any type of account established under
      one of these plans prior to November 1, 2002, the minimum additional
      investment will remain $25.

o     The minimum investment requirement does not apply to reinvesting dividends
      from a Fund or other Oppenheimer funds (a list of them appears in the
      Statement of Additional Information, or you can ask your dealer or call
      the Transfer Agent), or reinvesting distributions from unit investment
      trusts that have made arrangements with the Distributor.

AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which is
the net asset value per share plus any initial sales charge that applies. The
offering price that applies to a purchase order is based on the next calculation
of the net asset value per share that is made after the Distributor receives the
purchase order at its offices in Colorado, or after any agent appointed by the
Distributor receives the order.


Net   Asset Value. Each Fund calculates the net asset value of each class of
      shares as of the close of The New York Stock Exchange ("the Exchange"), on
      each day the Exchange is open for trading (referred to in this Prospectus
      as a "regular business day"). The Exchange normally closes at 4:00 P.M.,
      Eastern time, but may close earlier on some days. All references to time
      in this Prospectus mean "Eastern time."


      The net asset value per share is determined by dividing the value of a
      Fund's net assets attributable to a class by the number of shares of that
      class that are outstanding. To determine net asset value, the Fund's Board
      of Trustees has established procedures to value each Fund's securities, in
      general, based on market value. The Board has adopted special procedures
      for valuing illiquid and restricted securities and obligations for which
      market values cannot be readily obtained. Because some foreign securities
      trade in markets and on exchanges that operate on weekends and U.S.
      holidays, the values of some of a Fund's foreign investments may change on
      days when investors cannot buy or redeem Fund shares.


      If, after the close of the principal market on which a security held by a
      Fund is traded, and before the time the Fund's securities are priced that
      day, an event occurs that the Manager or the Adviser deems likely to cause
      a material change in the value of such security, the Fund's Board of
      Trustees has authorized the Manager or the Adviser, as applicable, subject
      to the Board's review, to ascertain a fair value for such security. A
      security's valuation may differ depending on the method used for
      determining value.

The  Offering Price. To receive the offering price for a particular day, in
      most cases the Distributor or its designated agent must receive your order
      by the time the Exchange closes that day. If your order is received on a
      day when the Exchange is closed or after it has closed, the order will
      receive the next offering price that is determined after your order is
      received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of the Exchange and transmit it to the
      Distributor so that it is received before the Distributor's close of
      business on a regular business day (normally 5:00 P.M.) to receive that
      day's offering price, unless your dealer has made alternative arrangements
      with the Distributor. Otherwise, the order will receive the next offering
      price that is determined.


- ------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? Each Fund offers investors five
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject to
different expenses and will likely have different share prices. When you buy
shares, be sure to specify the class of shares. If you do not choose a class,
your investment will be made in Class A shares.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------

Class A Shares. If you buy Class A shares, you pay an initial sales charge (on
      investments up to $1 million for regular accounts or lesser amounts for
      certain retirement plans). The amount of that sales charge will vary
      depending on the amount you invest. The sales charge rates are listed in
      "How Can You Buy Class A Shares?" below.
- ------------------------------------------------------------------------------

Class B Shares. If you buy Class B shares, you pay no sales charge at the time
      of purchase, but you will pay an annual asset-based sales charge. If you
      sell your shares within 6 years of buying them, you will normally pay a
      contingent deferred sales charge. That contingent deferred sales charge
      varies depending on how long you own your shares, as described in "How Can
      You Buy Class B Shares?" below.
- ------------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the time
      of purchase, but you will pay an annual asset-based sales charge. If you
      sell your shares within 12 months of buying them, you will normally pay a
      contingent deferred sales charge of 1.0%, as described in "How Can You Buy
      Class C Shares?" below.
- ------------------------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only through certain
      retirement plans), you pay no sales charge at the time of purchase, but
      you will pay an annual asset-based sales charge. If you sell your shares
      within 18 months of the retirement plan's first purchase of Class N
      shares, you may pay a contingent deferred sales charge of 1.0%, as
      described in "How Can You Buy Class N Shares?" below.
Class Y Shares. Class Y shares are offered only to certain institutional
      investors that have special agreements with the Distributor.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is best
suited to your needs depends on a number of factors that you should discuss with
your financial advisor. Some factors to consider are how much you plan to invest
and how long you plan to hold your investment. If your goals and objectives
change over time and you plan to purchase additional shares, you should
re-evaluate those factors to see if you should consider another class of shares.
Each Fund's operating costs that apply to a class of shares and the effect of
the different types of sales charges on your investment will vary your
investment results over time.

      The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are different.
The discussion below assumes that you will purchase only one class of shares and
not a combination of shares of different classes. Of course, these examples are
based on approximations of the effects of current sales charges and expenses
projected over time, and do not detail all of the considerations in selecting a
class of shares. You should analyze your options carefully with your financial
advisor before making that choice.


How   Long Do You Expect to Hold Your Investment? While future financial needs
      cannot be predicted with certainty, knowing how long you expect to hold
      your investment will assist you in selecting the appropriate class of
      shares. Because of the effect of class-based expenses, your choice will
      also depend on how much you plan to invest. For example, the reduced sales
      charges available for larger purchases of Class A shares may, over time,
      offset the effect of paying an initial sales charge on your investment,
      compared to the effect over time of higher class-based expenses on shares
      of Class B, Class C or Class N. For retirement plans that qualify to
      purchase Class N shares, Class N shares will generally be more
      advantageous than Class B and Class C shares.


   o  Investing for the Shorter Term. While each Fund is meant to be a long-term
      investment, if you have a relatively short-term investment horizon (that
      is, you plan to hold your shares for not more than six years), you should
      probably consider purchasing Class A or Class C shares rather than Class B
      shares. That is because of the effect of the Class B contingent deferred
      sales charge if you redeem within SIX years, as well as the effect of the
      Class B asset-based sales charge on the investment return for that class
      in the short-term. Class C shares might be the appropriate choice
      (especially for investments of less than $100,000), because there is no
      initial sales charge on Class C shares, and the contingent deferred sales
      charge does not apply to amounts you sell after holding them one year.

      However, if you plan to invest more than $100,000 for the shorter term,
      then as your investment horizon increases toward six years, Class C shares
      might not be as advantageous as Class A shares. That is because the annual
      asset-based sales charge on Class C shares will have a greater impact on
      your account over the longer term than the reduced front-end sales charge
      available for larger purchases of Class A shares.

      And for non-retirement plan investors who invest $1 million or more, in
      most cases Class A shares will be the most advantageous choice, no matter
      how long you intend to hold your shares. For that reason, the Distributor
      normally will not accept purchase orders of $500,000 or more of Class B
      shares or $1 million or more of Class C shares from a single investor.

o     Investing for the Longer Term. If you are investing less than $100,000 for
      the longer-term, for example for retirement, and do not expect to need
      access to your money for seven years or more, Class B shares may be
      appropriate.

Are   There Differences in Account Features That Matter to You? Some account
      features may not be available to Class B, Class C and Class N
      shareholders. Other features may not be advisable (because of the effect
      of the contingent deferred sales charge) for Class B, Class C and Class N
      shareholders. Therefore, you should carefully review how you plan to use
      your investment account before deciding which class of shares to buy.


      Additionally, the dividends payable to Class B, Class C and Class N
      shareholders will be reduced by the additional expenses borne by those
      classes that are not borne by Class A or Class Y shares, such as the Class
      B, Class C and Class N asset-based sales charge described below and in the
      Statement of Additional Information. Share certificates are only available
      for Class A shares. If you are considering using your shares as collateral
      for a loan, that may be a factor to consider.


How   Do Share Classes Affect Payments to Your Broker? A financial advisor may
      receive different compensation for selling one class of shares than for
      selling another class. It is important to remember that Class B, Class C
      and Class N contingent deferred sales charges and asset-based sales
      charges have the same purpose as the front-end sales charge on sales of
      Class A shares: to compensate the Distributor for concessions and expenses
      it pays to dealers and financial institutions for selling shares. The
      Distributor may pay additional compensation from its own resources to
      securities dealers or financial institutions based upon the value of
      shares of each Fund owned by the dealer or financial institution for its
      own account or for its customers.


SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix C to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of each Fund by certain groups, or under specified
retirement plan arrangements or in other special types of transactions. To
receive a waiver or special sales charge rate, you must advise the Distributor
when purchasing shares or the Transfer Agent when redeeming shares that a
special condition applies.


HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their offering price,
which is normally net asset value plus an initial sales charge. However, in some
cases, described below, purchases are not subject to an initial sales charge,
and the offering price will be the net asset value. In other cases, reduced
sales charges may be available, as described below or in the Statement of
Additional Information. Out of the amount you invest, the Fund receives the net
asset value to invest for your account.

      The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor or allocated to
your dealer as a concession. The Distributor reserves the right to reallow the
entire concession to dealers. The current sales charge rates and concessions
paid to dealers and brokers are as follows:

 ------------------------------------------------------------------------------
 Amount of Purchase       Front-End Sales  Front-End Sales   Concession As
                                           Charge As a
                            Charge As a Percentage of
                          Percentage of    Net               Percentage of
                          Offering Price   Amount Invested   Offering Price
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Less than $25,000             5.75%             6.10%             4.75%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $25,000 or more but           5.50%             5.82%             4.75%
 less than $50,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $50,000 or more but           4.75%             4.99%             4.00%
 less than $100,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $100,000 or more but          3.75%             3.90%             3.00%
 less than $250,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $250,000 or more but          2.50%             2.56%             2.00%
 less than $500,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $500,000 or more but          2.00%             2.04%             1.60%
 less than $1 million
 ------------------------------------------------------------------------------

Can   You Reduce Class A Sales Charges? You may be eligible to buy Class A
      shares at reduced sales charge rates under the Fund's "Right of
      Accumulation" or a Letter of Intent, as described in "Reduced Sales
      Charges" in the Statement of Additional Information.


Class A Contingent Deferred Sales Charge. There is no initial sales charge on
      purchases of Class A shares of any one or more of the Oppenheimer funds
      aggregating $1 million or more, or for certain purchases by particular
      types of retirement plans that were permitted to purchase such shares
      prior to March 1, 2001 ("grandfathered retirement accounts"). Retirement
      plans are not permitted to make initial purchases of Class A shares
      subject to a contingent deferred sales charge. The Distributor pays
      dealers of record concessions in an amount equal to 1.0% of purchases of
      $1 million or more other than by grandfathered retirement accounts. For
      grandfathered retirement accounts, the concession is 0.75% of the first
      $2.5 million of purchases plus 0.25% of purchases in excess of $2.5
      million. In either case, the concession will not be paid on purchases of
      shares by exchange or that were previously subject to a front-end sales
      charge and dealer concession.


      If you redeem any of those shares within an 18-month "holding period"
      measured from the beginning of the calendar month of their purchase, a
      contingent deferred sales charge (called the "Class A contingent deferred
      sales charge") may be deducted from the redemption proceeds. That sales
      charge will be equal to 1.0% of the lesser of:
o     the aggregate net asset value of the redeemed shares at the time of
      redemption (excluding shares purchased by reinvestment of dividends or
      capital gain distributions) or
o     the original net asset value of the redeemed shares.

      The Class A contingent deferred sales charge will not exceed the aggregate
      amount of the concessions the Distributor paid to your dealer on all
      purchases of Class A shares of all Oppenheimer funds you made that were
      subject to the Class A contingent deferred sales charge.

Purchases by Certain Retirement Plans. There is no initial sales charge on
      purchases of Class A shares of any one or more Oppenheimer funds by
      retirement plans that have $10 million or more in plan assets and that
      have entered into a special agreement with the Distributor and by
      retirement plans which are part of a retirement plan product or platform
      offered by certain banks, broker-dealers, financial advisors, insurance
      companies or recordkeepers which have entered into a special agreement
      with the Distributor. The Distributor currently pays dealers of record
      concessions in an amount equal to 0.25% of the purchase price of Class A
      shares by those retirement plans from its own resources at the time of
      sale, subject to certain exceptions as described in the Statement of
      Additional Information. There is no contingent deferred sales charge upon
      the redemption of such shares.

HOW CAN YOU BUY CLASS B SHARES? Class B shares are sold at net asset value per
share without an initial sales charge. However, if Class B shares are redeemed
within six years from the beginning of the calendar month of their purchase, a
contingent deferred sales charge will be deducted from the redemption proceeds.
The Class B contingent deferred sales charge is paid to compensate the
Distributor for its expenses of providing distribution-related services to the
Fund in connection with the sale of Class B shares.

      The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule for the Class B contingent deferred sales
charge holding period:

- -------------------------------------------------------------------------------
Years Since Beginning of Month in       Contingent Deferred Sales Charge on
Which Purchase Order was Accepted       Redemptions in That Year
                                        (As % of Amount Subject to Charge)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
0 - 1                                   5.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1 - 2                                   4.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2 - 3                                   3.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3 - 4                                   3.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4 - 5                                   2.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5 - 6                                   1.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

More than 6                             None

- -------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the contingent deferred
sales charge, all purchases are considered to have been made on the first
regular business day of the month in which the purchase was made.

Automatic Conversion of Class B Shares. Class B shares automatically convert to
      Class A shares 72 months after you purchase them. This conversion feature
      relieves Class B shareholders of the asset-based sales charge that applies
      to Class B shares under the Class B Distribution and Service Plan,
      described below. The conversion is based on the relative net asset value
      of the two classes, and no sales load or other charge is imposed. When any
      Class B shares that you hold convert, any other Class B shares that were
      acquired by reinvesting dividends and distributions on the converted
      shares will also convert to Class A shares. For further information on the
      conversion feature and its tax implications, see "Class B Conversion" in
      the Statement of Additional Information.

How Can you Buy Class C Shares? Class C shares are sold at net asset value per
share without an initial sales charge. However, if Class C shares are redeemed
within a holding period of 12 months from the beginning of the calendar month of
their purchase, a contingent deferred sales charge of 1.0% will be deducted from
the redemption proceeds. The Class C contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class C shares.


HOW CAN YOU BUY CLASS N SHARES? Class N shares are offered for sale to
retirement plans (including IRAs and 403(b) plans) that purchase $500,000 or
more of Class N shares of one or more Oppenheimer funds or to group retirement
plans (which do not include IRAs and 403(b) plans) that have assets of $500,000
or more or 100 or more eligible participants. See "Availability of Class N
shares" in the Statement of Additional Information for other circumstances where
Class N shares are available for purchase.


      A contingent deferred sales charge of 1.0% will be imposed upon the
redemption of Class N shares, if: o The group retirement plan is terminated or
Class N shares of all
      Oppenheimer funds are terminated as an investment option of the plan and
      Class N shares are redeemed within 18 months after the plan's first
      purchase of Class N shares of any Oppenheimer fund, or
o     With respect to an IRA or 403(b) plan, Class N shares are redeemed within
      18 months of the plan's first purchase of Class N shares of any
      Oppenheimer fund.


      Retirement plans that offer Class N shares may impose charges on plan
participant accounts. The procedures for buying, selling, exchanging and
transferring the Fund's other classes of shares (other than the time those
orders must be received by the Distributor or Transfer Agent in Colorado) and
the special account features applicable to purchasers of those other classes of
shares described elsewhere in this Prospectus do not apply to Class N shares
offered through a group retirement plan. Instructions for buying, selling,
exchanging or transferring Class N shares offered through a group retirement
plan must be submitted by the plan, not by plan participants for whose benefit
the shares are held.


Who Can Buy Class Y Shares? Class Y shares are sold at net asset value per share
without a sales charge directly to institutional investors that have special
agreements with the Distributor for this purpose. They may include insurance
companies, registered investment companies and employee benefit plans.
Individual investors cannot buy Class Y shares directly.

      An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those accounts. The procedures for buying,
selling, exchanging and transferring the Fund's other classes of shares (other
than the time those orders must be received by the Distributor or Transfer Agent
at their Colorado office) and the special account features available to
investors buying those other classes of shares do not apply to Class Y shares.
Instructions for buying, selling, exchanging or transferring Class Y shares must
be submitted by the institutional investor, not by its customers for whose
benefit the shares are held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.


Service Plan for Class A Shares. Each Fund has adopted a Service Plan for Class
      A shares. It reimburses the Distributor for a portion of its costs
      incurred for services provided to accounts that hold Class A shares.
      Reimbursement is made quarterly at an annual rate of up to 0.25% of the
      average annual net assets of Class A shares of the Fund. The Distributor
      currently uses all of those fees to pay dealers, brokers, banks and other
      financial institutions quarterly for providing personal service and
      maintenance of accounts of their customers that hold Class A shares. With
      respect to Class A shares subject to a Class A contingent deferred sales
      charge purchased by grandfathered retirement accounts, the Distributor
      pays the 0.25% service fee to dealers in advance for the first year after
      the shares are sold by the dealer. During the first year the shares are
      sold, the Distributor retains the service fee. After the shares have been
      held for a year, the Distributor pays the service fee to dealers on a
      quarterly basis.


Distribution and Service Plans for Class B, Class C and Class N Shares. Each
      Fund has adopted Distribution and Service Plans for Class B, Class C and
      Class N shares to pay the Distributor for its services and costs in
      distributing Class B, Class C and Class N shares and servicing accounts.
      Under the plans, each Fund pays the Distributor an annual asset-based
      sales charge of 0.75% on Class B and Class C shares and 0.25% on Class N
      shares. The Distributor also receives a service fee of 0.25% per year
      under the Class B, Class C and Class N plans.

      The asset-based sales charge and service fees increase Class B and Class C
      expenses by 1.0% and increase Class N expenses by 0.50% of the net assets
      per year of the respective class. Because these fees are paid out of each
      Fund's assets on an on-going basis, over time these fees will increase the
      cost of your investment and may cost you more than other types of sales
      charges.

      The Distributor uses the service fees to compensate dealers for providing
      personal services for accounts that hold Class B, Class C or Class N
      shares. The Distributor pays the 0.25% service fees to dealers in advance
      for the first year after the shares are sold by the dealer. After the
      shares have been held for a year, the Distributor pays the service fees to
      dealers on a quarterly basis. The Distributor retains the service fees for
      accounts for which it renders the required personal services.

      The Distributor currently pays a sales concession of 3.75% of the purchase
      price of Class B shares to dealers from its own resources at the time of
      sale. Including the advance of the service fee, the total amount paid by
      the Distributor to the dealer at the time of sale of Class B shares is
      therefore 4.00% of the purchase price. The Distributor retains the Class B
      asset-based sales charge. See the Statement of Additional Information for
      exceptions.

      The Distributor currently pays a sales concession of 0.75% of the purchase
      price of Class C shares to dealers from its own resources at the time of
      sale. Including the advance of the service fee, the total amount paid by
      the Distributor to the dealer at the time of sale of Class C shares is
      therefore 1.0% of the purchase price. The Distributor pays the asset-based
      sales charge as an ongoing concession to the dealer on Class C shares that
      have been outstanding for a year or more. See the Statement of Additional
      Information for exceptions.

      The Distributor currently pays a sales concession of 0.75% of the purchase
      price of Class N shares to dealers from its own resources at the time of
      sale. Including the advance of the service fee, the total amount paid by
      the Distributor to the dealer at the time of sale of Class N shares is
      therefore 1.0% of the purchase price. The Distributor retains the
      asset-based sales charge on Class N shares. See the Statement of
      Additional Information for exceptions.


Special Investor Services


ACCOUNTLINK. You can use our AccountLink feature to link your Fund account with
an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
    o transmit funds electronically to purchase shares by telephone (through a
      service representative or by PhoneLink) or automatically under Asset
      Builder Plans, or
    o have the Transfer Agent send redemption proceeds or transmit dividends and
      distributions directly to your bank account. Please call the Transfer
      Agent for more information.


      You may purchase shares by telephone only after your account has been
established. To purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1.800.225.5677. The purchase payment
will be debited from your bank account.

      AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer. After
your account is established, you can request AccountLink privileges by sending
signature-guaranteed instructions and proper documentation to the Transfer
Agent. AccountLink privileges will apply to each shareholder listed in the
registration on your account as well as to your dealer representative of record
unless and until the Transfer Agent receives written instructions terminating or
changing those privileges. After you establish AccountLink for your account, any
change of bank account information must be made by signature-guaranteed
instructions to the Transfer Agent signed by all shareholders who own the
account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions automatically
using a touch-tone phone. PhoneLink may be used on already-established Fund
accounts after you obtain a Personal Identification Number (PIN), by calling the
PhoneLink number, 1.800.225.5677. Purchasing Shares. You may purchase shares in
amounts up to $100,000 by
      phone, by calling 1.800.225.5677. You must have established AccountLink
      privileges to link your bank account with a Fund to pay for these
      purchases.

Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
      below, you can exchange shares automatically by phone from your Fund
      account to another OppenheimerFunds account you have already established
      by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling the
      PhoneLink number and the applicable Fund will send the proceeds directly
      to your AccountLink bank account. Please refer to "How to Sell Shares,"
      below for details.


CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier). Please
call 1.800.225.5677 for information about which transactions may be handled this
way. Transaction requests submitted by fax are subject to the same rules and
restrictions as written and telephone requests described in this Prospectus.

OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information about each Fund,
as well as your account balance, on the OppenheimerFunds Internet website, at
WWW.OPPENHEIMERFUNDS.COM. Additionally, shareholders listed in the account
registration (and the dealer of record) may request certain account transactions
through a special section of that website. To perform account transactions or
obtain account information online, you must first obtain a user I.D. and
password on that website. If you do not want to have Internet account
transaction capability for your account, please call the Transfer Agent at
1.800.225.5677. At times, the website may be inaccessible or its transaction
features may be unavailable.


AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. Each Fund has several plans that enable
you to sell shares automatically or exchange them to another OppenheimerFunds
account on a regular basis. Please call the Transfer Agent or consult the
Statement of Additional Information for details.


REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A or Class B
shares of a Fund, you have up to six months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies only to Class A shares
that you purchased subject to an initial sales charge and to Class A or Class B
shares on which you paid a contingent deferred sales charge when you redeemed
them. This privilege does not apply to Class C, Class N or Class Y shares. You
must be sure to ask the Distributor for this privilege when you send your
payment.


RETIREMENT PLANS. You may buy shares of each Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that individuals
and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
      SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business
      owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
      eligible tax-exempt organizations, such as schools, hospitals and
      charitable organizations.
401(k)Plans. These are special retirement plans for businesses. Pension and
      Profit-Sharing Plans. These plans are designed for businesses and
      self-employed individuals.
      Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.

How to Sell Shares


You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your order
is received in proper form (which means that it must comply with the procedures
described below) and is accepted by the Transfer Agent. Each Fund lets you sell
your shares by writing a letter, by wire, or by telephone. You can also set up
Automatic Withdrawal Plans to redeem shares on a regular basis. If you have
questions about any of these procedures, and especially if you are redeeming
shares in a special situation, such as due to the death of the owner or from a
retirement plan account, please call the Transfer Agent first, at
1.800.225.5677, for assistance.


Certain Requests Require a Signature Guarantee. To protect you and a Fund from
      fraud, the following redemption requests must be in writing and must
      include a signature guarantee (although there may be other situations that
      also require a signature guarantee):
   o You wish to redeem more than $100,000 and receive a check o The redemption
   check is not payable to all shareholders listed on the
      account statement
   o  The redemption check is not sent to the address of record on your
      account statement
   o  Shares are being transferred to a Fund account with a different owner
      or name
   o  Shares are being redeemed by someone (such as an Executor) other than the
      owners.

Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept a
      guarantee of your signature by a number of financial institutions,
      including:
o     a U.S. bank, trust company, credit union or savings association,
o     a foreign bank that has a U.S. correspondent bank,
o     a U.S. registered dealer or broker in securities, municipal securities
      or government securities, or
o     a U.S. national securities exchange, a registered securities
      association or a clearing agency.
      If you are signing on behalf of a corporation, partnership or other
      business or as a fiduciary, you must also include your title in the
      signature.

Retirement Plan Accounts. There are special procedures to sell shares in an
      OppenheimerFunds retirement plan account. Call the Transfer Agent for a
      distribution request form. Special income tax withholding requirements
      apply to distributions from retirement plans. You must submit a
      withholding form with your redemption request to avoid delay in getting
      your money and if you do not want tax withheld. If your employer holds
      your retirement plan account for you in the name of the plan, you must ask
      the plan trustee or administrator to request the sale of the Fund shares
      in your plan account.


Sending Redemption Proceeds by Wire. While the Fund normally sends your money by
      check, you can arrange to have the proceeds of shares you sell sent by
      Federal Funds wire to a bank account you designate. It must be a
      commercial bank that is a member of the Federal Reserve wire system. The
      minimum redemption you can have sent by wire is $2,500. There is a $10 fee
      for each request. To find out how to set up this feature on your account
      or to arrange a wire, call the Transfer Agent at 1.800.225.5677.


HOWDO you SELL SHARES BY MAIL? Write a letter of instruction that includes: o
   Your name o The Fund's name o Your Fund account number (from your account
   statement) o The dollar amount or number of shares to be redeemed o Any
   special payment instructions o Any share certificates for the shares you are
   selling o The signatures of all registered owners exactly as the account is
      registered, and
   o  Any special documents requested by the Transfer Agent to assure proper
      authorization of the person asking to sell the shares.

Use the following address for            Send courier or express mail

requests by mail:                        requests to:
OppenheimerFunds Services                OppenheimerFunds Services
P.O. Box 5270                            10200 E. Girard Avenue, Building D
Denver, Colorado 80217                   Denver, Colorado 80231

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption price
calculated on a particular regular business day, your call must be received by
the Transfer Agent by the close of the Exchange that day, which is normally 4:00
P.M., but may be earlier on some days. You may not redeem shares held in an
OppenheimerFunds retirement plan account or under a share certificate by
telephone.
   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677. Whichever method you use, you may have a
      check sent to the address on

the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
      telephone in any seven-day period. The check must be payable to all owners
      of record of the shares and must be sent to the address on the account
      statement. This service is not available within 30 days of changing the
      address on an account.

Telephone Redemptions Through AccountLink or by Wire. There are no dollar limits
      on telephone redemption proceeds sent to a bank account designated when
      you establish AccountLink. Normally the ACH transfer to your bank is
      initiated on the business day after the redemption. You do not receive
      dividends on the proceeds of the shares you redeemed while they are
      waiting to be transferred.

      If you have requested Federal Funds wire privileges for your account, the
      wire of the redemption proceeds will normally be transmitted on the next
      bank business day after the shares are redeemed. There is a possibility
      that the wire may be delayed up to seven days to enable the Fund to sell
      securities to pay the redemption proceeds. No dividends are accrued or
      paid on the proceeds of shares that have been redeemed and are awaiting
      transmittal by wire.

CAN YOU SELL SHARES THROUGH your DEALER? The Distributor has made arrangements
to repurchase Fund shares from dealers and brokers on behalf of their customers.
Brokers or dealers may charge for that service. If your shares are held in the
name of your dealer, you must redeem them through your dealer.

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase shares
subject to a Class A, Class B, Class C or Class N contingent deferred sales
charge and redeem any of those shares during the applicable holding period for
the class of shares, the contingent deferred sales charge will be deducted from
the redemption proceeds (unless you are eligible for a waiver of that sales
charge based on the categories listed in Appendix C to the Statement of
Additional Information and you advise the Transfer Agent of your eligibility for
the waiver when you place your redemption request.)

      A contingent deferred sales charge will be based on the lesser of the net
asset value of the redeemed shares at the time of redemption or the original net
asset value. A contingent deferred sales charge is not imposed on:
o     the amount of your  account  value  represented  by an  increase  in net
      asset value over the initial purchase price,
o     shares  purchased by the  reinvestment  of  dividends  or capital  gains
      distributions, or

o     shares redeemed in the special circumstances  described in Appendix C to
      the Statement of Additional Information.
      To determine whether a contingent deferred sales charge applies to a

redemption, the Fund redeems shares in the following order:
   1. shares acquired by reinvestment of dividends and capital gains
      distributions,
   2. shares held for the holding period that applies to the class, and 3.
   shares held the longest during the holding period.

      Contingent deferred sales charges are not charged when you exchange shares
of a Fund for shares of other Oppenheimer funds. However, if you exchange them
within the applicable contingent deferred sales charge holding period, the
holding period will carry over to the fund whose shares you acquire. Similarly,
if you acquire shares of a Fund by exchanging shares of another Oppenheimer fund
that are still subject to a contingent deferred sales charge holding period,
that holding period will carry over to the applicable Fund.

How to Exchange Shares

Shares of each Fund may be exchanged for shares of certain Oppenheimer funds at
net asset value per share at the time of exchange, without sales charge. Shares
of each Fund can be purchased by exchange of shares of other Oppenheimer funds
on the same basis. To exchange shares, you must meet several conditions:
   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o The prospectuses of both funds must offer the exchange privilege. o You
   must hold the shares you buy when you establish your account for at
      least seven days before you can exchange them. After the account is open
      seven days, you can exchange shares every regular business day.
   o  You must meet the minimum purchase requirements for the fund whose shares
      you purchase by exchange.

   o  Before exchanging into a fund, you must obtain and read its prospectus.
      Shares of a particular class of each Fund may be exchanged only for

shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of a Fund only for Class A shares of another fund. In
some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you own
and a purchase of the shares of the other fund, which may result in a capital
gain or loss. Please refer to "How to Exchange Shares" in the Statement of
Additional Information for more details.


      You can find a list of Oppenheimer funds currently available for exchanges
in the Statement of Additional Information or obtain one by calling a service
representative at 1.800.225.5677. That list can change from time to time.


HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing or
by telephone:

Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
      signed by all owners of the account. Send it to the Transfer Agent at the
      address on the back cover. Exchanges of shares held under certificates
      cannot be processed unless the Transfer Agent receives the certificates
      with the request.

Telephone Exchange Requests. Telephone exchange requests may be made either by
      calling a service representative or by using PhoneLink for automated
      exchanges by calling 1.800.225.5677. Telephone exchanges may be made only
      between accounts that are registered with the same name(s) and address.
      Shares held under certificates may not be exchanged by telephone.


ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o     Shares are redeemed from one fund and purchased from the other fund in

      the exchange transaction on the same regular business day on which the
      Transfer Agent receives an exchange request that conforms to the policies
      described above. It must be received by the close of the Exchange that
      day, which is normally 4:00 P.M. but may be earlier on some days.

o     The interests of a Fund's long-term shareholders and its ability to
      manage its investments may be adversely affected when its shares are
      repeatedly bought and sold in response to short-term market
      fluctuations--also known as "market timing." When large dollar amounts
      are involved, a Fund may have difficulty implementing long-term
      investment strategies, because it cannot predict how much cash it will
      have to invest. Market timing also may force a Fund to sell portfolio
      securities at disadvantageous times to raise the cash needed to buy a
      market timer's Fund shares. These factors may hurt a Fund's performance
      and its shareholders. When the Manager believes frequent trading would
      have a disruptive effect on a Fund's ability to manage its investments,
      the Manager and the Fund may reject purchase orders and exchanges into
      the Fund by any person, group or account that the Manager believes to
      be a market timer.
   o  Each Fund may amend, suspend or terminate the exchange privilege at any
      time. Each Fund will provide you notice whenever it is required to do so
      by applicable law, but it may impose changes at any time for emergency
      purposes.
   o  If the Transfer Agent cannot exchange all the shares you request because
      of a restriction cited above, only the shares eligible for exchange will
      be exchanged.

Shareholder Account Rules and Policies

More information about each Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.

A     $12 annual fee is assessed on any account valued at less than $500. The
      fee is automatically deducted from accounts annually on or about the
      second to last business day of September. See the Statement of Additional
      Information, or visit the OppenheimerFunds website, to learn how you can
      avoid this fee and for circumstances when this fee will not be assessed.

The   offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is in
      a Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may be
      modified, suspended or terminated by a Fund at any time. The Fund will
      provide you notice whenever it is required to do so by applicable law. If
      an account has more than one owner, the Fund and the Transfer Agent may
      rely on the instructions of any one owner. Telephone privileges apply to
      each owner of the account and the dealer representative of record for the
      account unless the Transfer Agent receives cancellation instructions from
      an owner of the account.
The   Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the Fund
      will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements for
      redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating in
      NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders of
      a Fund if the dealer performs any transaction erroneously or improperly.
The   redemption price for shares will vary from day to day because the value of
      the securities in each Fund's portfolio fluctuates. The redemption price,
      which is the net asset value per share, will normally differ for each
      class of shares. The redemption value of your shares may be more or less
      than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink or by Federal Funds wire (as elected by the
      shareholder) within seven days after the Transfer Agent receives
      redemption instructions in proper form. However, under unusual
      circumstances determined by the Securities and Exchange Commission,
      payment may be delayed or suspended. For accounts registered in the name
      of a broker-dealer, payment will normally be forwarded within three
      business days after redemption.

The   Transfer Agent may delay processing any type of redemption payment as
      described under "How to Sell Shares" for recently purchased shares, but
      only until the purchase payment has cleared. That delay may be as much as
      10 days from the date the shares were purchased. That delay may be avoided
      if you purchase shares by Federal Funds wire or certified check, or
      arrange with your bank to provide telephone or written assurance to the
      Transfer Agent that your purchase payment has cleared.

Involuntary redemptions of small accounts may be made by each Fund if the
      account value has fallen below $500 for reasons other than the fact that
      the market value of shares has dropped. In some cases, involuntary
      redemptions may be made to repay the Distributor for losses from the
      cancellation of share purchase orders.
Sharesmay be "redeemed in kind" under unusual circumstances (such as a lack of
      liquidity in the Fund's portfolio to meet redemptions). This means that
      the redemption proceeds will be paid with liquid securities from a Fund's
      portfolio.
"Backup withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges) if
      you fail to furnish a Fund your correct, certified Social Security or
      Employer Identification Number when you sign your application, or if you
      under-report your income to the Internal Revenue Service.
To    avoid sending duplicate copies of materials to households, a Fund will
      mail only one copy of each prospectus, annual and semi-annual report and
      annual notice of a Fund's privacy policy to shareholders having the same
      last name and address on the Fund's records. The consolidation of these
      mailings, called householding, benefits the Funds through reduced mailing
      expense.


      If you want to receive multiple copies of these materials, you may call
      the Transfer Agent at 1.800.225.5677. You may also notify the Transfer
      Agent in writing. Individual copies of prospectuses, reports and privacy
      notices will be sent to you commencing within 30 days after the Transfer
      Agent receives your request to stop householding.


Dividends, Capital Gains and Taxes

DIVIDENDS. Each Fund intends to declare dividends separately for each class of
shares from net investment income annually and to pay dividends to shareholders
in December on a date selected by the Board of Trustees. Dividends and
distributions paid on Class A, and Class Y shares will generally be higher than
dividends for Class B shares, Class C shares and Class N shares, which normally
have higher expenses than Class A shares and Class Y shares. Each Fund has no
fixed dividend rate and cannot guarantee that it will pay any dividends or
distributions.

CAPITAL GAINS. Each Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term or
long-term capital gains in December of each year. Each Fund may make
supplemental distributions of dividends and capital gains following the end of
its fiscal year. There can be no assurance that a Fund will pay any capital
gains distributions in a particular year.

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your
account, specify on your application how you want to receive your dividends and
distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all dividends
      and capital gains distributions in additional shares of the Fund.

Reinvest Dividends or Capital Gains. You can elect to reinvest some
      distributions (dividends, short-term capital gains or long-term capital
      gains distributions) in the Fund while receiving the other types of
      distributions by check or having them sent to your bank account through
      AccountLink.

Receive All Distributions in Cash. You can elect to receive a check for all
      dividends and capital gains distributions or have them sent to your bank
      through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
      reinvest all distributions in the same class of shares of another
      OppenheimerFunds account you have established.

TAXES. For retirement plan participants using each Fund as an investment option
under their plan, dividends and capital gain distributions from each Fund
generally will not be subject to current federal personal income tax, but if
they are reinvested in the Fund under the plan, those dividends and
distributions will accumulate on a tax-deferred basis. In general, retirement
plans and, in particular, distributions from retirement plans, are governed by
complex federal and state tax rules. Plan participants should contact their Plan
administrator, refer to their plan's Summary Plan Description, and/or speak to a
professional tax adviser regarding the tax consequences of participating in the
Plan and making withdrawals from their Plan account.

      If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in each Fund.
Distributions are subject to federal income tax and may be subject to state or
local taxes. Dividends paid from short-term capital gains and net investment
income are taxable as ordinary income. Long-term capital gains are taxable as
long-term capital gains when distributed to shareholders. It does not matter how
long you have held your shares. Whether you reinvest your distributions in
additional shares or take them in cash, the tax treatment is the same.

      If more than 50% of a Fund's assets are invested in foreign securities at
the end of any fiscal year, the Fund may elect under the Internal Revenue Code
to permit shareholders to take a credit or deduction on their federal income tax
returns for foreign taxes paid by that Fund.

      Every year each Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year. Any
long-term capital gains will be separately identified in the tax information a
Fund sends you after the end of the calendar year.

Avoid "Buying a Dividend." If you buy shares on or just before the ex-dividend
      date, or just before a Fund declares a capital gains distribution, you
      will pay the full price for the shares and then receive a portion of the
      price back as a taxable dividend or capital gain.
Remember, There May be Taxes on Transactions. Because each Fund's share prices
      fluctuate, you may have a capital gain or loss when you sell or exchange
      your shares. A capital gain or loss is the difference between the price
      you paid for the shares and the price you received when you sold them. Any
      capital gain is subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by a Fund may
      be considered a non-taxable return of capital to shareholders. If that
      occurs, it will be identified in notices to shareholders.

      This information is only a summary of certain federal income tax
information about your investment. You should consult with your tax advisor
about the effect of an investment in a Fund on your particular tax situation.


MASTER/FEEDER STRUCTURE


Unlike many other mutual funds which directly buy and manage their own portfolio
securities, the OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Mercury Advisors Focus Growth Fund seek to achieve their investment objectives by
investing all of their assets in another registered investment company with the
same goals as the Fund. All investments are made by the respective Master Fund.
Investors in each Fund will acquire an indirect interest in the respective
Master Fund.

      Other "feeder" funds may also invest in the Master Fund and all the feeder
funds bear the Master Fund's expenses in proportion to their assets. This
structure may enable the feeder funds to reduce costs through economies of
scale. A larger investment portfolio may also reduce certain transaction costs
to the extent that contributions to and redemptions from the Master Fund by
feeder funds may offset each other and produce a lower net cash flow. Each
feeder fund can set its own transaction minimums, fund specific expenses, and
other conditions.


      Each Fund may withdraw from its respective Master Fund at any time for any
reason and may invest all of its assets in another pooled investment vehicle or
retain an investment adviser to manage the Fund's assets directly. The OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus
Growth Fund may change the Master Fund in which it will invest if the Trustees
believe such change would be in the best interests of Fund shareholders.


      Smaller feeder funds may be harmed by the actions of larger feeder funds.
For example, a larger feeder fund could have more voting power than a Fund over
the operations of the Master Fund. Whenever the Master Fund holds a vote of its
feeder funds, the feeder funds, including the OSM - Mercury Advisors S&P 500
Index Fund and the OSM - Mercury Advisors Focus Growth Fund, will pass the vote
through to its own shareholders.

Financial Highlights


The Financial Highlights Table is presented to help you understand each Fund's
financial performance since inception. Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in a Fund
(assuming reinvestment of all dividends and distributions). This information has
been audited by Deloitte & Touche LLP, the Funds' independent auditors,
whose report, along with each Fund's financial statements, is included in the
Statement of Additional Information, which is available on request.


FINANCIAL HIGHLIGHTS



                                                                   Class A                     Class B                   Class C
                                                                Year Ended                  Year Ended                Year Ended
                                                                  Nov. 30,                    Nov. 30,                  Nov. 30,
                                                         2002       2001 1           2002       2001 1          2002      2001 1
====================================================================================================================================
 Per Share Operating Data

 Net asset value, beginning of period                  $ 3.95        $10.00         $3.92       $10.00         $3.92      $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                     (.04)         (.02)         (.06)        (.03)         (.04)       (.03)
 Net realized and unrealized loss                       (1.39)        (6.03)        (1.37)       (6.05)        (1.39)      (6.05)
                                                       -----------------------------------------------------------------------------
 Total from investment operations                       (1.43)        (6.05)        (1.43)       (6.08)        (1.43)      (6.08)
- ------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                        $ 2.52        $ 3.95         $2.49       $ 3.92         $2.49      $ 3.92
                                                       =============================================================================

====================================================================================================================================
 Total Return, at Net Asset Value 2                    (36.20)%      (60.50)%      (36.48)%     (60.80)%      (36.48)%    (60.80)%

====================================================================================================================================
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)              $1,591        $1,048          $788         $667          $658        $300
- ------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                     $1,402        $  444          $864         $305          $454        $114
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                    (1.47)%       (1.45)%       (2.22)%      (2.21)%       (2.21)%     (2.23)%
 Expenses                                                2.76%         3.99%         3.56%        4.78%         3.53%       4.79%
 Expenses, net of voluntary reimbursement of
 expenses and/or waiver of transfer agent fees           1.74%         1.84%         2.53%        2.46%         2.47%       2.18%
- ------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                             275.69%       137.66%       275.69%      137.66%       275.69%     137.66%


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.

See accompanying Notes to Financial Statements.


       10 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND




                                                                                  CLASS N                     CLASS Y
                                                                               YEAR ENDED                  YEAR ENDED
                                                                                 NOV. 30,                    NOV. 30,
                                                                       2002        2001 1          2002        2001 2
========================================================================================================================
 Per Share Operating Data

 Net asset value, beginning of period                                 $3.94         $8.28         $3.96        $10.00
- ------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                                   (.01)         (.04)         (.04)         (.05)
 Net realized and unrealized loss                                     (1.41)        (4.30)        (1.39)        (5.99)
                                                                      --------------------------------------------------
 Total from investment operations                                     (1.42)        (4.34)        (1.43)        (6.04)
- ------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                       $2.52         $3.94         $2.53        $ 3.96
                                                                      ==================================================

========================================================================================================================
 Total Return, at Net Asset Value 3                                  (36.04)%      (52.42)%      (36.11)%      (60.40)%

========================================================================================================================
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                               $72            $1            $1 4          $1 4
- ------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                      $52            $1            $1 4          $1
- ------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 5
 Net investment loss                                                  (1.70)%       (1.06)%       (0.40)%       (0.63)%
 Expenses                                                              3.18%         4.01%        88.54%       503.44%
 Expenses, net of voluntary reimbursement of
 expenses and/or waiver of transfer agent fees                         2.12%         3.07%         1.21%         2.83%
- ------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 6                                           275.69%       137.66%       275.69%       137.66%




1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Less than $1,000.
5. Annualized for periods of less than one full year.
6. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.


See accompanying Notes to Financial Statements.



FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------


                                                                 Class A               Class B               Class C
                                                              Year Ended            Year Ended            Year Ended
                                                                Nov. 30,              Nov. 30,              Nov. 30,
                                                         2002     2001 1       2002     2001 1       2002     2001 1
- ----------------------------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                   $ 9.44     $10.00     $ 9.37     $10.00     $ 9.38     $10.00
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .09        .09        .07        .01        .05        .01
Net realized and unrealized loss                         (.88)      (.65)      (.92)      (.64)      (.90)      (.63)
                                                       ---------------------------------------------------------------
Total from investment operations                         (.79)      (.56)      (.85)      (.63)      (.85)      (.62)
- ----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.10)        --       (.08)        --       (.09)        --
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                         $ 8.55     $ 9.44     $ 8.44     $ 9.37     $ 8.44     $ 9.38
                                                       ===============================================================

- ----------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2                      (8.49)%    (5.60)%    (9.11)%    (6.30)%    (9.12)%    (6.20)%

- ----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)               $4,898     $4,829     $  455     $  100     $  521     $  363
- ----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                      $4,744     $4,739     $  255     $   32     $  467     $   68
- ----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets: 3
Net investment income                                    1.08%      1.19%      0.28%      0.50%      0.29%      0.46%
Expenses                                                 1.51%      1.53%      2.75%      2.44%      2.67%      2.43%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees           1.41%      1.51%      2.64%      2.17%      2.56%      2.04%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    73%        32%        73%        32%        73%        32%


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

            15 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


FINANCIAL HIGHLIGHTS  Continued
- --------------------------------------------------------------------------------


                                                                    Class N               Class Y
                                                                 Year Ended            Year Ended
                                                                   Nov. 30, Nov.
                                                            30, 2002 2001 1 2002
                                                            2001 2
- ---------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                      $ 9.41     $ 9.75     $ 9.46     $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                        .07        .04        .11        .11
Net realized and unrealized loss                            (.87)      (.38)      (.88)      (.65)
Total from investment operations                            (.80)      (.34)      (.77)      (.54)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                        (.09)        --       (.12)        --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period                            $ 8.52     $ 9.41     $ 8.57     $ 9.46
                                                          =========================================

- ---------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3                         (8.60)%    (3.49)%    (8.27)%    (5.40)%

- ---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)                  $  322     $   38     $    1     $    1
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  147     $   24     $    1     $    1
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                       0.76%      0.84%      1.24%      1.39%
Expenses                                                    2.22%      1.94%     88.03%    501.51%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees              2.12%      1.79%      1.54%      1.28%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate                                       73%        32%        73%        32%



1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.



FINANCIAL HIGHLIGHTS



                                                 CLASS A             CLASS B             CLASS C
                                                    Year                Year                Year
                                                   Ended               Ended               Ended
                                                Nov. 30,            Nov. 30,            Nov. 30,
                                          2002    2001 1      2002    2001 1      2002    2001 1
=================================================================================================

 Per Share Operating Data
 Net asset value, beginning of period    $8.56    $10.00     $8.50    $10.00     $8.49    $10.00
- -------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                      (.04)     (.03)     (.02)     (.06)     (.06)     (.02)
 Net realized and unrealized loss        (2.03)    (1.41)    (2.08)    (1.44)    (2.03)    (1.49)
                                         --------------------------------------------------------
 Total from investment operations        (2.07)    (1.44)    (2.10)    (1.50)    (2.09)    (1.51)
- -------------------------------------------------------------------------------------------------
 Net asset value, end of period          $6.49     $8.56     $6.40     $8.50     $6.40     $8.49
                                         ========================================================
=================================================================================================
 Total Return, at Net Asset Value 2     (24.18)%  (14.40)%  (24.71)%  (15.00)%  (24.62)%  (15.10)%

=================================================================================================
 Ratios/Supplemental Data
 Net assets, end of period
 (in thousands)                         $4,981    $5,234    $1,296      $354    $2,194      $968
- -------------------------------------------------------------------------------------------------
 Average net assets (in thousands)      $4,862    $4,683    $  620      $221    $1,528      $232
- -------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                     (0.59)%   (0.50)%   (1.29)%   (1.37)%   (1.32)%   (1.31)%
 Expenses                                 1.89%     1.44%     3.08%     2.45%     2.86%     2.46%
 Expenses, net of voluntary reimbursement
 of expenses and/or voluntary waiver of
 transfer agent fees                      1.39%     1.44%     2.51%     2.24%     2.31%     2.10%
- -------------------------------------------------------------------------------------------------
 Portfolio turnover rate                    77%       56%       77%       56%       77%       56%


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

                           17 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



FINANCIAL HIGHLIGHTS  CONTINUED



                                                           CLASS N             CLASS Y
                                                              Year                Year
                                                             Ended               Ended
                                                          Nov. 30,            Nov. 30,
                                                    2002    2001 1      2002    2001 2
========================================================================================

 Per Share Operating Data
 Net asset value, beginning of period             $ 8.52     $9.45    $ 8.57    $10.00
- ----------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                (.05)     (.02)     (.03)     (.03)
 Net realized and unrealized loss                  (2.02)     (.91)    (2.03)    (1.40)
                                                   -------------------------------------
 Total from investment operations                  (2.07)     (.93)    (2.06)    (1.43)
- ----------------------------------------------------------------------------------------
 Net asset value, end of period                    $6.45     $8.52     $6.51    $ 8.57
                                                   =====================================

========================================================================================
 Total Return, at Net Asset Value 3               (24.30)%   (9.84)%  (24.04)%  (14.30)%

========================================================================================
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)         $1,313      $361        $1        $1
- ----------------------------------------------------------------------------------------
 Average net assets (in thousands)                $1,031      $122        $1        $1
- ----------------------------------------------------------------------------------------
 Ratios to average net assets: 4
 Net investment loss                               (0.82)%   (0.90)%   (0.41)%   (0.38)%
 Expenses                                           2.56%     1.98%    88.09%   501.48%
 Expenses, net of voluntary reimbursement
 of expenses and/or voluntary waiver of
 transfer agent fees                                2.01%     1.71%     1.43%     1.25%
- ----------------------------------------------------------------------------------------
 Portfolio turnover rate                              77%       56%       77%       56%


1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.



FINANCIAL HIGHLIGHTS



                                                         Class A           Class B           Class C
                                                            Year              Year              Year
                                                           Ended             Ended             Ended
                                                        Nov. 30,          Nov. 30,          Nov. 30,
                                                  2002    2001 1    2002    2001 1    2002    2001 1
- -----------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period           $  9.25   $10.00   $ 9.18   $10.00  $  9.18   $10.00
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                     (.06)      .08     (.07)     .04     (.07)     .03
Net realized and unrealized loss                (1.05)     (.83)   (1.09)    (.86)   (1.09)    (.85)
                                               ------------------------------------------------------
Total from investment operations                (1.11)     (.75)   (1.16)    (.82)   (1.16)    (.82)
- -----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income             (.09)       --     (.06)      --     (.07)      --
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period                  $8.05     $9.25    $7.96    $9.18    $7.95    $9.18
                                               ======================================================

- -----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2             (12.17)%   (7.50)% (12.75)%  (8.20)% (12.78)%  (8.20)%

- -----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)       $6,775    $8,717   $4,325   $2,071   $6,872   $3,729
- -----------------------------------------------------------------------------------------------------
Average net assets (in thousands)              $9,404    $6,384   $3,416   $1,075   $5,788   $1,427
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                    (0.52)%    1.57%   (1.21)%   1.06%   (1.21)%   1.17%
Expenses                                         1.85%     1.59%    2.75%    2.54%    2.72%    2.55%
Expenses, net of voluntary reimbursement
of expenses and/or voluntary waiver of
transfer agent fees                              1.59%     1.59%    2.44%    2.39%    2.41%    2.38%
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate                           139%       55%     139%      55%     139%      55%


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

        18 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND



                                                                       Class N            Class Y
                                                                          Year               Year
                                                                         Ended              Ended
                                                                      Nov. 30,           Nov. 30,
                                                                2002    2001 1     2002    2001 2
- ---------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                          $ 9.21    $ 9.84   $ 9.26    $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                            .02       .03      .01       .12
Net realized and unrealized loss                               (1.14)     (.66)   (1.06)     (.86)
                                                              -------------------------------------
Total from investment operations                               (1.12)     (.63)   (1.05)     (.74)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                            (.09)       --     (.11)       --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period                                 $8.00     $9.21    $8.10    $ 9.26
                                                              =====================================

- ---------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3                            (12.30)%   (6.40)% (11.52)%   (7.40)%

- ---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)                      $5,698      $660       $1        $1
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands)                             $3,055      $158       $1        $1
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                                   (0.66)%    2.08%    0.10%     1.52%
Expenses                                                        2.23%     2.07%   87.59%   501.53%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees                  1.98%     1.89%    1.12%     1.30%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          139%       55%     139%       55%


1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year. See accompanying Notes to
Financial Statements.



FINANCIAL HIGHLIGHTS



                                                                   Class A                     Class B                     Class C
                                                                      Year                        Year                        Year
                                                                     Ended                       Ended                       Ended
                                                                  Nov. 30,                    Nov. 30,                    Nov. 30,
                                                        2002          2001 1        2002          2001 1        2002          2001 1
- ------------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                 $ 7.56        $10.00        $ 7.51        $10.00        $ 7.51        $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                    (.09)         (.07)         (.05)         (.14)         (.11)         (.04)
 Net realized and unrealized loss                      (1.70)        (2.37)        (1.77)        (2.35)        (1.71)        (2.45)
                                                     -------------------------------------------------------------------------------
 Total from investment operations                      (1.79)        (2.44)        (1.82)        (2.49)        (1.82)        (2.49)
- ------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                        $5.77        $ 7.56         $5.69        $ 7.51         $5.69        $ 7.51
                                                     ===============================================================================

- ------------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                   (23.68)%      (24.40)%      (24.23)%      (24.90)%      (24.23)%      (24.90)%

- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)             $3,148        $4,046          $193          $ 95          $156          $114
- ------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $3,560        $4,255          $148          $118          $131          $ 40
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                   (1.42)%       (1.04)%       (2.16)%       (1.93)%       (2.16)%       (1.93)%
 Expenses                                               2.24%         1.75%         3.66%         2.74%         3.51%         2.76%
 Expenses, net of voluntary reimbursement of expenses
 and/or voluntary waiver of transfer agent fees         1.73%         1.75%         2.77%         2.57%         2.79%         2.28%
- ------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                 408%          370%          408%          370%          408%          370%




1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year. See accompanying Notes to
Financial Statements.

13 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


FINANCIAL HIGHLIGHTS  Continued


                                                              Class N           Class Y
                                                                 Year              Year
                                                                Ended             Ended
                                                             Nov. 30,          Nov. 30,
                                                        2002   2001 1     2002   2001 2
- -----------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                 $ 7.53   $ 9.06   $ 7.57   $10.00
- -----------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                    (.10)    (.03)    (.08)    (.05)
 Net realized and unrealized loss                      (1.70)   (1.50)   (1.70)   (2.38)
                                                    -------------------------------------
 Total from investment operations                      (1.80)   (1.53)   (1.78)   (2.43)
- -----------------------------------------------------------------------------------------
 Net asset value, end of period                        $5.73    $7.53    $5.79    $7.57
                                                    =====================================

- -----------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 3                   (23.90)% (16.89)% (23.51)% (24.30)%

- -----------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                $68      $31       $1       $1
- -----------------------------------------------------------------------------------------
 Average net assets (in thousands)                       $50      $ 9       $1       $1
 Ratios to average net assets: 4
 Net investment loss                                   (1.67)%  (1.53)%  (0.80)%  (0.63)%
 Expenses                                               3.14%    2.27%   88.69%  501.80%
 Expenses, net of voluntary reimbursement of expenses
 and/or voluntary waiver of transfer agent fees         2.28%    1.74%    1.62%    1.45%
- -----------------------------------------------------------------------------------------
 Portfolio turnover rate                                 408%     370%     408%     370%



1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year. See accompanying Notes to
Financial Statements.



FINANCIAL HIGHLIGHTS



 Class A     Year Ended December 31                                                            2002             2001 1
- -------------------------------------------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                                                       $  8.85             $10.00
- -------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                                          .03                .01
 Net realized and unrealized loss                                                             (2.08)             (1.16)
                                                                                            -----------------------------
 Total from investment operations                                                             (2.05)             (1.15)
- -------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                          (.03)                --
                                                                                            -----------------------------
 Net asset value, end of period                                                               $6.77              $8.85
                                                                                            =============================

- -------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                          (23.21)%           (11.50)%

- -------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                    $6,334             $3,598
- -------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                           $5,202             $1,397
- -------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                                                         0.62%              0.33%
 Expenses                                                                                      2.03%              1.87%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                       1.08%              0.99%
- -------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                     4.59%              3.21%

1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.


16 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 


 Class B     Year Ended December 31                                                          2002              2001 1

- ----------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                                      $ 8.80            $10.00
- ----------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                                                           --              (.01)
 Net realized and unrealized loss                                                           (2.09)            (1.19)
                                                                                         -----------------------------
 Total from investment operations                                                           (2.09)            (1.20)
- ----------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                          --                --
                                                                                         -----------------------------
 Net asset value, end of period                                                             $6.71             $8.80
                                                                                         =============================

- ----------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                        (23.75)%          (12.00)%

- ----------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                  $4,184            $1,189
- ----------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                         $2,929             $ 468
- ----------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                                                        (0.10)%           (0.40)%
 Expenses                                                                                    2.78%             2.65%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                     1.83%             1.68%
- ----------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                   4.59%             3.21%

1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.

17 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 


FINANCIAL HIGHLIGHTS  Continued



 Class C     Year Ended December 31                                                         2002            2001 1
- -------------------------------------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                                                     $ 8.79          $10.00
- -------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                                                          --            (.01)
 Net realized and unrealized loss                                                          (2.09)          (1.20)
                                                                                        ---------------------------
 Total from investment operations                                                          (2.09)          (1.21)
- -------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                         --              --
                                                                                        ---------------------------
 Net asset value, end of period                                                            $6.70          $ 8.79
                                                                                        ===========================

- -------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                       (23.78)%        (12.10)%

- -------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                 $4,952          $1,558
- -------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                        $3,592          $  500
- -------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                                                       (0.10)%         (0.39)%
 Expenses                                                                                   2.70%           2.64%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                    1.80%           1.76%
- -------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                  4.59%           3.21%




1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.


18 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 





 Class N     Year Ended December 31                                                       2002              2001 1
- -------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                                   $ 8.82            $ 9.54
- -------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                                     .02                --
 Net realized and unrealized loss                                                        (2.08)             (.72)
                                                                                    -------------------------------
 Total from investment operations                                                        (2.06)             (.72)
- -------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                     (.02)               --
                                                                                    -------------------------------
 Net asset value, end of period                                                          $6.74             $8.82
                                                                                    ===============================

- -------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                     (23.33)%           (7.55)%

- -------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                              $13,080            $5,014
- -------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                     $ 9,977            $1,425
- -------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                                                    0.38%             0.07%
 Expenses                                                                                 2.16%             2.14%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                  1.29%             1.40%
- -------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                4.59%             3.21%




1. For the period from March 1, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.

19 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



FINANCIAL HIGHLIGHTS  Continued



 Class Y     Year Ended  December 31                                                        2002               2001 1
- ----------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                                     $ 8.90             $10.00
- ----------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                                       .07                .04
 Net realized and unrealized loss                                                          (2.12)             (1.14)
                                                                                        ------------------------------
 Total from investment operations                                                          (2.05)             (1.10)
- ----------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                       (.02)                --
                                                                                        ------------------------------
 Net asset value, end of period                                                            $6.83              $8.90
                                                                                        ==============================

- ----------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                       (23.06)%           (11.00)%

- ----------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                     $1                 $1
- ----------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                            $1                 $1
- ----------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                                                      0.80%              0.57%
 Expenses                                                                                  46.32%            384.04%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                    0.83%              0.62%
- ----------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                  4.59%              3.21%




1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.



                          Appendix to Prospectus of
                         Oppenheimer Select Managers

Graphic Material included in the Prospectus of Oppenheimer Select Managers:
"Annual Total Return (Class A) (% as of 12/31 each year)":

A bar chart will be included in the Prospectus of Oppenheimer  Select Managers
(OSM)  for  each of its 6  series  depicting  the  annual  total  return  of a
hypothetical  investment  in Class A shares of each Fund for the calendar year
ended  12/31/02,  without  deducting  sales  charges.  Set forth  below is the
relevant data point that will appear on the bar chart.


- ---------------------------------------------------------------------------------
             OSM -      OSM -                             OSM -       OSM -
             Mercury    Mercury     OSM -      OSM -      Salomon     Gartmore
             Advisors   Advisors    QM Active  Jennison   Brothers    Millennium
Calendar     S&P 500    Focus       Balanced   Growth     All Cap     Growth
Year Ended   Index Fund Growth Fund Fund       Fund       Fund        Fund II
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
12/31/02     -23.21%    -39.01%     -12.44%    -30.81%    -22.09%     -29.45%
- ---------------------------------------------------------------------------------



INFORMATION AND SERVICES


For More Information on The Select Managers Funds
The following additional information about each Fund is available without charge
upon request:


STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about each Fund's investment policies, risks, and operations. It is
incorporated by reference into this Prospectus (which means it is legally part
of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about each Fund's
investments and performance is available in each Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Funds'
performance during its last fiscal year.

How to Get More Information

You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Funds' privacy policy and other
information about each Fund or your account:


By Telephone:           Call OppenheimerFunds Services toll-free:

                            1.800.CALL OPP (225.5677)


By Mail:                Write to:
                            OppenheimerFunds Services
                        P.O. Box 5270 Denver, Colorado 80217-5270

On the Internet:        You can send us a request by e-mail or
                        read or download documents on the
                            OppenheimerFunds website:
                            WWW.OPPENHEIMERFUNDS.COM


Information about each Fund including the Statement of Additional Information
can be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be obtained
by calling the SEC at 1.202.942.8090. Reports and other information about each
Fund are available on the EDGAR database on the SEC's Internet website at
www.sec.gov. Copies may be obtained after payment of a duplicating fee by
electronic request at the SEC's e-mail address: publicinfo@sec.gov or by writing
to the SEC's Public Reference Section, Washington, D.C. 20549-0102.


No one has been authorized to provide any information about the Funds or to make
any representations about the Funds other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Funds, nor a
solicitation of an offer to buy shares of the Funds, to any person in any state
or other jurisdiction where it is unlawful to make such an offer.


The Trust's SEC File No.: 811-10153 The Funds' shares are distributed by:
PR0000.001.0303 (logo) OppenheimerFunds(R) Distributor, Inc.

Printed on recycled paper.




Oppenheimer Select Managers Mercury Advisors S&P 500 Index Fund Mercury
      Advisors Focus Growth Fund QM Active Balanced Fund Jennison Growth Fund
      Salomon Brothers All Cap Fund Gartmore Millennium Growth Fund II

6803 South Tucson Way, Centennial, Colorado 80112

1.800.525.7048


Statement of Additional Information dated March 28, 2003

      This Statement of Additional Information is not a Prospectus. This
document contains additional information about the Funds and supplements
information in the Prospectus dated March 28, 2003. It should be read together
with the Prospectus. You can obtain the Prospectus by writing to the Funds'
Transfer Agent, OppenheimerFunds Services, at P.O. Box 5270, Denver, Colorado
80217, or by calling the Transfer Agent at the toll-free number shown above, or
by downloading it from the OppenheimerFunds Internet web site at
www.oppenheimerfunds.com.


Contents
                                                                            Page
About the Funds
Additional Information About the Funds' Investment Policies and Risks..     2
    The Funds' Investment Policies.....................................     2
    Other Investment Techniques and Strategies.........................    15
    Investment Restrictions............................................    34
How the Funds are Managed .............................................    42
    Organization and History...........................................    42
    Trustees and Officers of the Trust.................................    44
    The Manager........................................................    56
Brokerage Policies of the Funds........................................    64
Distribution and Service Plans.........................................    70
Performance of the Funds...............................................    75
About Your Account
How To Buy Shares......................................................    80
How To Sell Shares.....................................................    91
How To Exchange Shares.................................................    96
Dividends, Capital Gains and Taxes.....................................    99
Additional Information About the Funds.................................   104

Financial Information About the Funds
Independent Auditors' Reports and Financial Statements.................   106

Appendix A: Ratings Definitions........................................   A-1
Appendix B: Industry Classifications...................................   B-1
Appendix C: Special Sales Charge Arrangements and Waivers..............   C-1





ABOUT  THE  FUNDS

Additional Information About the Funds' Investment Policies and Risks

      The investment objective, the principal investment policies and the main
risks of each Fund are described in the Prospectus. This Statement of Additional
Information contains supplemental information about those policies and risks and
the types of securities that each Fund's investment Adviser or subadviser can
select for the Fund. Additional information is also provided about the
strategies that the Fund may use to try to achieve its objective.

The Funds' Investment Policies

Oppenheimer Select Managers - Mercury Advisors S&P 500 Index Fund

      The Fund seeks to achieve its investment objective by investing all of its
assets in the Master S&P 500 Index Series of the Quantitative Master Series
Trust (the "Master Fund") which has the same investment objective as the Fund.
The Fund's investment experience and results will correspond directly to the
investment experience of the Master Fund in which it invests. Thus, all
investments are made at the level of the Master Fund. For simplicity, however,
with respect to investment objective, policies and restrictions, this Statement
of Additional Information, like the Prospectus, uses the term "Fund" to include
the Fund and the Master Fund in which the Fund invests. The following is a
description of the investment policies of the Fund.


      The Fund's investment objective is not a fundamental policy and may be
changed by the Board of Trustees of the Fund with 60 days notice to shareholders
but , without shareholder approval. The Trustees may also change the target
index of the Fund if they consider that a different index would facilitate the
management of the Fund in a manner which better enables the Fund to seek to
mirror the total return of the market segment represented by the then existing
target index.


      The investment objective of the Fund is to match the performance of the
Standard & Poor's 500 Composite Stock Price Index (the "S&P 500") as
closely as possible before the deduction of Fund expenses. There can be no
assurance that the investment objective of the Fund will be achieved.

      In seeking to mirror the total return of the S&P 500, Fund Asset
Management, L.P., doing business as Mercury Advisors (the "Adviser") generally
will allocate the Master Fund's investments among common stocks in approximately
the same weightings as the S&P 500. In addition, the Adviser may use options
and futures contracts and other types of financial instruments relating to all
or a portion of the S&P 500. At times the Fund may not invest in all of the
common stocks in the S&P 500, or in the same weightings as in the S&P
500. At those times, the Fund chooses investments so that the market
capitalizations, industry weighting and other fundamental characteristics of the
stocks and derivative instruments chosen are similar to the S&P 500 as a
whole. The Fund may also engage in securities lending.

      The S&P 500 is composed of the common stocks of 500 large
capitalization companies from various industrial sectors, most of which are
listed on the New York Stock Exchange (the "NYSE"). A company's stock market
capitalization is the total market value of its outstanding shares. The S&P
500 represents a significant portion of the market value of all common stocks
publicly traded in the United States.

About Indexing and Management of the Fund

      About Indexing. The Fund is not managed according to traditional methods
of "active" investment management, which involve the buying and selling of
securities based upon economic, financial, and market analyses and investment
judgment. Instead, the Fund, utilizing essentially a "passive" or "indexing"
investment approach, seeks to replicate, before the Fund's expenses (which can
be expected to reduce the total return of a Fund), the total return of its
respective index.

      Indexing and Managing the Fund. The Fund will be substantially invested in
securities in the S&P 500, and will invest at least 80% of its net assets
(plus any borrowings for investment purposes) at the time of investment in
equity securities or other financial instruments which are contained in or
correlated with securities in the S&P 500.

      Because the Fund seeks to mirror the total return of the S&P 500,
generally the Adviser will not attempt to judge the merits of any particular
security as an investment but will seek only to mirror the total return of the
securities in the S&P 500. However, the Adviser may omit or remove a security
which is included in the S&P 500 from the Fund's portfolio if, following
objective criteria, the Adviser judges the security to be insufficiently liquid
or believes the merit of the investment has been substantially impaired by
extraordinary events or financial conditions.

      The Adviser may acquire certain financial instruments based upon
individual securities or based upon or consisting of one or more baskets of
securities (which basket may be based upon the S&P 500). Certain of these
instruments may represent an indirect ownership interest in such securities or
baskets. Others may provide for the payment to the Fund or by the Fund of
amounts based upon the performance (positive, negative or both) of a particular
security or basket. The Adviser will select such instruments when it believes
that the use of the instrument will correlate substantially with the expected
total return of a target security or index. In connection with the use of such
instruments, the Adviser may enter into short sales in an effort to adjust the
weightings of particular securities represented in the basket to more accurately
reflect such securities' weightings in the S&P 500.


      The Fund's ability to mirror the total return of the S&P 500 may be
affected by, among other things, transaction costs, administration and other
expenses incurred by the Fund, taxes, changes in either the composition of the
S&P 500 or the assets of the Fund, and the timing and amount of Fund
investors' contributions and withdrawals, if any. In addition, the Fund's total
return will be affected by incremental operating costs (e.g., transfer agency,
accounting) that will be borne by the Fund. Under normal circumstances, it is
anticipated that the Fund's total return over periods of one (1) year and longer
will, on a gross basis and before taking into account expenses (incurred at
either the Master Fund or the Fund level), be within ten (10) basis points (a
basis point is one one-hundredth of one percent (0.01%)) of the total return of
the S&P 500. There can be no assurance that this level of correlation will
be achieved. In the event that this correlation is not achieved over time, the
Trustees of the Fund will consider alternative strategies for the Fund.
Information regarding correlation of the Fund's performance to that of the
S&P 500 will be reflected in the Fund's annual report.


Other Investment Policies, Practices and Risk Factors

      Cash Management. Generally, the Adviser will employ futures and options on
futures to provide liquidity necessary to meet anticipated redemptions or for
day-to-day operating purposes. However, if considered appropriate in the opinion
of the Adviser, a portion of the Fund's assets may be invested in certain types
of instruments with remaining maturities of three hundred ninety seven (397)
days or less for liquidity purposes. Such instruments would consist of: (i)
obligations of the U.S. Government, its agencies, instrumentalities, authorities
or political subdivisions ("U.S. Government Securities"); (ii) other
fixed-income securities rated Aa or higher by Moody's Investors Service Inc.
("Moody's) or AA or higher by Standard & Poor's Rating Service ("S&P")
or, if unrated, of comparable quality in the opinion of the Adviser; (iii)
commercial paper; (iv) bank obligations, including negotiable certificates of
deposit, time deposits and bankers' acceptances; and (v) repurchase agreements.
At the time the Fund invests in commercial paper, bank obligations or repurchase
agreements, the issuer or the issuer's parent must have outstanding debt rated
Aa or higher by Moody's or AA or higher by S&P or outstanding commercial
paper, bank obligations or other short-term obligations rated Prime-1 by Moody's
or A-1 by S&P; or, if no such ratings are available, the instrument must be
of comparable quality in the opinion of the Adviser.

      Short Sales. In connection with the use of certain instruments based upon
or consisting of one or more baskets of securities, the Adviser may sell a
security the Fund does not own, or in an amount greater than the Fund owns
(i.e., make short sales). Such transactions will be used only in an effort to
adjust the weightings of particular securities represented in the basket to
reflect such securities' weightings in the target index.

      Cash Flows; Expenses. The ability of the Fund to satisfy its investment
objective depends to some extent on the Adviser's ability to manage cash flow
(primarily from purchases and redemptions and distributions from the Fund's
investments). The Adviser will make investment changes to the Fund's portfolio
to accommodate cash flow while continuing to seek to replicate the total return
of the S&P 500. Investors should also be aware that the investment performance
of the S&P 500 is a hypothetical number which does not take into account
brokerage commissions and other transaction costs, custody and other costs of
investing, and any incremental operating costs (e.g., transfer agency,
accounting) that will be borne by the Fund. Finally, since the Fund seeks to
replicate the total return of the S&P 500, the Adviser generally will not
attempt to judge the merits of any particular security as an investment.

Additional Information Concerning the Index

      S&P 500. "Standard & Poor's", "S&P", "S&P 500",
"Standard & Poor's 500", and "500" are trademarks of The McGraw-Hill
Companies, Inc. and have been licensed for use by the Fund. The OSM - Mercury
Advisors S&P 500 Index Fund and the Master Fund are not sponsored, endorsed,
sold or promoted by S&P, a division of The McGraw-Hill Companies, Inc.
S&P makes no representation regarding the advisability of investing in the
Fund. S&P makes no representation or warranty, express or implied, to the
owners of shares of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly or
the ability of the S&P 500 to track general stock market performance.
S&P's only relationship to the Fund is the licensing of certain trademarks
and trade names of S&P and of the S&P 500 which is determined, composed
and calculated by S&P without regard to the Fund. S&P has no obligation
to take the needs of the Fund and the Master Fund or the owners of shares of the
Fund and the Master Fund into consideration in determining, composing or
calculating the S&P 500. S&P is not responsible for and has not
participated in the determination of the prices and amount of the Fund and the
Master Fund or the timing of the issuance of sale of shares of the Fund and the
Master Fund or in the determination or calculation of the equation by which the
Fund and the Master Fund is to be converted into cash. S&P has no obligation
or liability in connection with the administration, marketing or trading of the
Fund and the Master Fund.

      S&P does not guarantee the accuracy and/or the completeness of the
S&P 500 Index or any data included therein, and S&P shall have no liability
for any errors, omissions, or interruptions therein. S&P makes no warranty,
express or implied, as to results to be obtained by the Fund, the Master Fund,
owners of shares of the Fund and the Master Fund, or any other person or entity
from the use of the S&P 500 or any data included therein. S&P makes no
express or implied warranties and expressly disclaims all warranties of
merchantability or fitness for a particular purpose or use with respect to the
S&P 500 or any data included therein. Without limiting any of the foregoing,
in no event shall S&P have any liability for any special, punitive, indirect,
or consequential damages (including lost profits), even if notified of the
possibility of such damages.

Portfolio Turnover

      Although the Fund will use a passive indexing approach to investing, the
Fund may engage in a substantial number of portfolio transactions. The rate of
portfolio turnover will be a limiting factor when the Adviser considers whether
to purchase or sell securities for the Fund only to the extent that the Adviser
will consider the impact of transaction costs on the Fund's tracking error.
Changes in the securities comprising the S&P 500, will tend to increase the
Fund's portfolio turnover rate, as the Investment Adviser restructures the
Fund's holdings to reflect the changes in the S&P 500. The portfolio turnover
rate is, in summary, the percentage computed by dividing the lesser of the
Fund's purchases or sales of securities by the average net asset value of the
Fund. High portfolio turnover involves correspondingly greater brokerage
commissions for the Fund investing in equity securities and other transaction
costs which are borne directly by the Fund. A high portfolio turnover rate may
also result in the realization of taxable capital gains, including short-term
capital gains taxable at ordinary income rates.





Oppenheimer Select Managers - Mercury Advisors S&P 500 Index Fund Oppenheimer
Select Managers - Mercury Advisors Focus Growth Fund Oppenheimer Select Managers
- - QM Active Balanced Fund Oppenheimer Select Managers - Jennison Growth Fund
Oppenheimer Select Managers - Salomon Brothers All Cap Fund Oppenheimer Select
Managers - Gartmore Millennium Growth Fund II


Policies. The composition of each Fund's portfolio and the techniques and
strategies that the respective Subadviser (Adviser in the case of the OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth
Fund) may use in selecting portfolio securities will vary over time. The Funds
are not required to use all of the investment techniques and strategies
described below at all times in seeking their goals. The Funds may use some of
the special investment techniques and strategies at some times or not at all.

      |X| Cyclical Opportunities. (All Funds except OSM - Mercury Advisors S&P
500 Index Fund). The Fund's Adviser or the Subadvisers might also seek to take
advantage of changes in the business cycle by investing in companies that are
sensitive to those changes if the Adviser or Subadviser believes they have
growth potential. For example, when the economy is expanding, companies in the
consumer durables and technology sectors might benefit and offer long-term
growth opportunities. Other cyclical industries include insurance, for example.
Each Fund focuses on seeking growth over the long term, but could seek to take
tactical advantage of short-term market movements or events affecting particular
issuers or industries.


      |X| Investments in Equity Securities. (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund). Each Fund focuses its investments in equity
securities, all but the OSM - QM Active Balanced Fund focusing its investments
in the equity securities of growth companies. The equity securities each Fund
may invest in include common stocks, preferred stocks, rights and warrants, and
securities convertible into common stock. The OSM - Mercury Advisors Focus
Growth Fund and the OSM - Jennison Growth Fund will invest primarily in the
common stocks of companies having a market capitalization that excess $1
billion. The OSM - QM Active Balanced Fund, the OSM - Salomon Brothers All Cap
Fund and the OSM - Gartmore Millennium Growth Fund II may invest in the stocks
of companies of every size - small, medium and large capitalization. The Funds
generally measure a company's market capitalization at the time of investment.
However, a Fund is not required to sell securities of an issuer it holds if the
issuer's capitalization exceeds the limits described above.


      Each Fund can also invest a portion of its assets in securities of issuers
having a market capitalization different from the limits described above. At
times, in the Adviser's or Subadviser's view, the market may favor or disfavor
securities of issuers of a particular capitalization range. Therefore, although
the Fund may normally invest its assets in equity securities of a certain market
capitalization, the Fund may change the proportion of its equity investments in
securities of different capitalization ranges, based upon the Adviser's or
Subadviser's judgment of where the best market opportunities are to seek the
Fund's objective.

      Growth companies might be providing new products or services that could
enable them to capture a dominant or important market position. They may have a
special area of expertise or the capability to take advantage of changes in
demographic factors in a more profitable way than larger, more established
companies.

      Growth companies tend to retain a large part of their earnings for
research, development or investment in capital assets. Therefore, they do not
tend to emphasize paying dividends, and may not pay any dividends for some time.
They are selected for a Fund's portfolio because the Adviser or Subadviser for
the particular Fund believes the price of the stock will increase over the long
term.

            |_| Over-the-Counter Securities. (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund). Growth companies may offer greater opportunities
for capital appreciation than securities of large, more established companies.
However, securities of small-cap and mid-cap companies also involve greater
risks than securities of larger companies. Securities of small and medium
capitalization issuers may trade on securities exchanges or in the
over-the-counter market. The over-the-counter markets, both in the U.S. and
abroad, may have less liquidity than securities exchanges. That lack of
liquidity can affect the price a Fund is able to obtain when it wants to sell a
security, because if there are fewer buyers and less demand for a particular
security, the Fund might not be able to sell it at an acceptable price or might
have to reduce the price in order to dispose of the security.

      In the U.S., the principal over-the-counter market is the NASDAQ Stock
Market, Inc., ("NASDAQ") which is regulated by the National Association of
Securities Dealers, Inc. It consists of an electronic quotation system for
certain securities, and a security must have at least two (2) market makers to
be included in NASDAQ. Other over-the-counter markets exist in the U.S., as well
as those abroad, wherever a dealer is willing to make a market in a particular
security.

            |_| Convertible Securities. (All Funds except OSM - Mercury Advisors
S&P 500 Index Fund). Convertible securities are debt securities that are
convertible into an issuer's common stock. Convertible securities rank senior to
common stock in a corporation's capital structure and therefore are subject to
less risk than common stock in case of the issuer's bankruptcy or liquidation.
Synthetic convertible securities may be either (i) a debt security or preferred
stock that may be convertible only under certain contingent circumstances or
that may pay the holder a cash amount based on the value of shares of underlying
common stock partly or wholly in lieu of a conversion right (a "Cash-Settled
Convertible") or (ii) a combination of separate securities chosen by the Adviser
or Subadviser, as the case may be, in order to create the economic
characteristics of a convertible security, i.e., a fixed income security paired
with a security with equity conversion features, such as an option or warrant (a
"Manufactured Convertible").

            The value of a convertible security is a function of its "investment
value" and its "conversion value." If the investment value exceeds the
conversion value, the security will behave more like a debt security, and the
security's price will likely increase when interest rates fall and decrease when
interest rates rise. If the conversion value exceeds the investment value, the
security will behave more like an equity security: it will likely sell at a
premium over its conversion value, and its price will tend to fluctuate directly
with the price of the underlying security.

            While convertible securities are a form of debt security, in many
cases their conversion feature (allowing conversion into equity securities)
causes them to be regarded more as "equity equivalents." As a result, the rating
assigned to the security has less impact on an Adviser's or Subadviser's
investment decision with respect to convertible securities than in the case of
non-convertible fixed income securities. To determine whether convertible
securities should be regarded as "equity equivalents," the Adviser or
Subadvisers examine the following factors:
(1)            whether, at the option of the investor, the convertible security
               can be exchanged for a fixed number of shares of common stock of
               the issuer,
(2)            whether the issuer of the convertible securities has restated its
               earnings per share of common stock on a fully diluted basis
               (considering the effect of conversion of the convertible
               securities), and
(3)            the extent to which the convertible security may be a defensive
               "equity substitute," providing the ability to participate in any
               appreciation in the price of the issuer's common stock.

            As indicated above, synthetic convertible securities may include
either Cash-Settled Convertibles or Manufactured Convertibles. Cash-Settled
Convertibles are instruments that are created by the issuer and have the
economic characteristics of traditional convertible securities but may not
actually permit conversion into the underlying equity securities in all
circumstances. As an example, a private company may issue a Cash-Settled
Convertible that is convertible into common stock only if the company
successfully completes a public offering of its common stock prior to maturity
and otherwise pays a cash amount to reflect any equity appreciation.
Manufactured Convertibles are created by the Adviser or Subadviser, as the case
may be, by combining separate securities that possess one of the two principal
characteristics of a convertible security, i.e., fixed income ("fixed income
component") or a right to acquire equity securities ("convertible component").
The fixed income component is achieved by investing in non-convertible fixed
income securities, such as non-convertible bonds, preferred stocks and money
market instruments. The convertibility component is achieved by investing in
call options, warrants, LEAPS, or other securities with equity conversion
features ("equity features") granting the holder the right to purchase a
specified quantity of the underlying stocks within a specified period of time at
a specified price or, in the case of a stock index option, the right to receive
a cash payment based on the value of the underlying stock index.

            A Manufactured Convertible differs from traditional convertible
securities in several respects. Unlike a traditional convertible security, which
is a single security having a unitary market value, a Manufactured Convertible
is comprised of two or more separate securities, each with its own market value.
Therefore, the total "market value" of such a Manufactured Convertible is the
sum of the values of its fixed-income component and its convertibility
component.

            More flexibility is possible in the creation of a Manufactured
Convertible than in the purchase of a traditional convertible security. Because
many corporations have not issued convertible securities, the Adviser or
Subadviser, as the case may be, may combine a fixed income instrument and an
equity feature with respect to the stock of the issuer of the fixed income
instrument to create a synthetic convertible security otherwise unavailable in
the market. The Adviser or Subadviser, as the case may be, may also combine a
fixed income instrument of an issuer with an equity feature with respect to the
stock of a different issuer when the Adviser or Subadviser, as the case may be,
believes such a Manufactured Convertible would better promote the Fund's
objective than alternative investments. For example, the Adviser or Subadviser,
as the case may be, may combine an equity feature with respect to an issuer's
stock with a fixed income security of a different issuer in the same industry to
diversify the Fund's credit exposure, or with a U.S. Treasury instrument to
create a Manufactured Convertible with a higher credit profile than a
traditional convertible security issued by that issuer. A Manufactured
Convertible also is a more flexible investment in that its two components may be
purchased separately and, upon purchasing the separate securities, "combined" to
create a Manufactured Convertible. For example, the Fund may purchase a warrant
for eventual inclusion in a Manufactured Convertible while postponing the
purchase of a suitable bond to pair with the warrant pending development of more
favorable market conditions.

            The value of a Manufactured Convertible may respond differently to
certain market fluctuations than would a traditional convertible security with
similar characteristics. For example, in the event the Fund created a
Manufactured Convertible by combining a short-term U.S. Treasury instrument and
a call option on a stock, the Manufactured Convertible would likely outperform a
traditional convertible of similar maturity and which is convertible into that
stock during periods when Treasury instruments outperform corporate fixed income
securities and underperform during periods when corporate fixed-income
securities outperform Treasury instruments.

      |_| Preferred Stock (All Funds except OSM - Mercury Advisors S&P 500
Index Fund). Preferred stock, unlike common stock, has a stated dividend rate
payable from the corporation's earnings. Preferred stock dividends may be
cumulative or non-cumulative. "Cumulative" dividend provisions require all or a
portion of prior unpaid dividends to be paid before dividends can be paid on the
issuer's
common stock. Preferred stock may be "participating" stock, which means that it
may be entitled to a dividend exceeding the stated dividend in certain cases.

      If interest rates rise, the fixed dividend on preferred stocks may be less
attractive, causing the price of preferred stocks to decline. Preferred stock
may have mandatory sinking fund provisions, as well as provisions allowing calls
or redemptions prior to maturity, which can also have a negative impact on
prices when interest rates decline. Preferred stock generally has a preference
over common stock on the distribution of a corporation's assets in the event of
liquidation of the corporation. The rights of preferred stock on distribution of
a corporation's assets in the event of a liquidation are generally subordinate
to the rights associated with a corporation's debt securities.


      |_| Credit Risk. (All Funds except OSM - Mercury Advisors S&P 500 Index
Fund). Convertible securities and debt securities are subject to credit risk.
Credit risk relates to the ability of the issuer of a debt security to make
interest or principal payments on the security as they become due. If the issuer
fails to pay interest, a Fund's income may be reduced and if the issuer fails to
repay principal, the value of that bond and of the Fund's shares may be reduced.
The Adviser or Subadvisers may rely to some extent on credit ratings by
nationally recognized ratings agencies in evaluating the credit risk of
securities selected for a Fund's portfolio. It may also use its own research and
analysis. Many factors affect an issuer's ability to make timely payments, and
the credit risks of a particular security may change over time. The OSM - QM
Active Balanced Fund and the OSM - Salomon Brothers All Cap Fund may invest in
higher-yielding lower-grade debt securities (that is, securities below
investment grade), which have special risks. Those are securities rated below
the four highest rating categories of S&P or Moody's or equivalent ratings of
other rating agencies or ratings assigned to a security by the Adviser or
Subadvisers. The QM Active Balanced Fund can invest up to 20% of its total
assets in lower-grade debt securities and the OSM - Salomon Brothers All Cap
Fund can invest up to 20% of its assets in non-convertible debt securities rated
below investment grade or, if unrated, of equivalent quality as determined by
the Subadviser.


      |_| Special Risks of Lower-Grade Securities. "Lower-grade" debt securities
are those rated below "investment grade" which means they have a rating lower
than "Baa" by Moody's or lower than "BBB" by S&P or similar ratings by other
rating organizations. If they are unrated, and are determined by the Adviser or
Subadviser to be of comparable quality to debt securities rated below investment
grade, they are included in the limitation on the percentage of the Fund's
assets that can be invested in lower-grade securities.

    Among the special credit risks of lower-grade securities is the greater risk
that the issuer may default on its obligation to pay interest or to repay
principal than in the case of investment grade securities. The issuer's low
creditworthiness may increase the potential for insolvency. An overall decline
in values in the high yield bond market is also more likely during a period of
general economic downturn. An economic downturn or an increase in interest rates
could severely disrupt the market for high yield bonds, adversely affecting the
values of outstanding bonds as well as the ability of issuers to pay interest or
repay principal. In the case of foreign high yield bonds, these risks are in
addition to the special risk of foreign investing discussed in the Prospectus
and in this Statement of Additional Information. To the extent they can be
converted into stock, convertible securities may be less subject to some of
these risks than non-convertible high yield bonds, since stock may be more
liquid and less affected by some of these risk factors.

    While securities rated "Baa" by Moody's or "BBB" by S&P are investment
grade and are not regarded as junk bonds, those securities may be subject to
special risks, and have some speculative characteristics.

      |_| Interest Rate Risks. In addition to credit risks, convertible debt
securities in particular and debt securities in general are subject to changes
in value when prevailing interest rates change. When interest rates fall, the
values of outstanding debt securities generally rise, and the bonds may sell for
more than their face amount. When interest rates rise, the values of outstanding
debt securities generally decline, and the bonds may sell at a discount from
their face amount. The magnitude of these price changes is generally greater for
bonds with longer maturities. Therefore, when the average maturity of a Fund's
debt securities is longer, its share price may fluctuate more when interest
rates change.

      |_| Rights and Warrants. (All Funds except OSM - Mercury Advisors S&P
500 Index Fund). Each Fund can invest in warrants or rights. Warrants basically
are options to purchase equity securities at specific prices valid for a specific
period of time. Their prices do not necessarily move parallel to the prices of
the underlying securities. Rights are similar to warrants, but normally have a
short duration and are distributed directly by the issuer to its shareholders.
Rights and warrants have no voting rights, receive no dividends and have no
rights with respect to the assets of the issuer.

      |_| Investments in Debt Securities. (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund). The Funds may invest in a variety of domestic
and foreign debt securities, including corporate bonds, debentures and other debt
securities, and foreign and U.S. government securities including
mortgage-related securities. The OSM - QM Active Balanced Fund will invest in
debt securities to seek investment income as part of its investment objectives.
Each Fund might invest in them also to seek capital growth or for liquidity or
defensive purposes. Although the OSM - QM Active Balanced Fund will invest at
least 25% of its total assets in investment grade debt securities, the Fund
currently emphasizes investments in equity securities. Foreign debt securities
are subject to the risks of foreign investing described below. In general,
domestic and foreign debt securities are also subject to credit risk and
interest rate risk.


      ? Mortgage-Related Securities (OSM - QM Active Balanced Fund, OSM -
Salomon Brothers All Cap Fund and OSM - Jennison Growth Fund only).
Mortgage-related securities are a form of derivative investment collateralized
by pools of commercial or residential mortgages. Pools of mortgage loans are
assembled as securities for sale to investors by government agencies or entities
or by private issuers. These securities include collateralized mortgage
obligations ("CMOs"), mortgage pass-through securities, stripped mortgage
pass-through securities, interests in real estate mortgage investment conduits
("REMICs") and other real estate-related securities.


      Mortgage-related securities that are issued or guaranteed by agencies or
instrumentalities of the U.S. government have relatively little credit risk
(depending on the nature of the issuer) but are subject to interest rate risks
and prepayment risks, as described in the Prospectus.


      As with other debt securities, the prices of mortgage-related securities
tend to move inversely to changes in interest rates. The OSM - QM Active
Balanced Fund, OSM - Salomon Brothers All Cap Fund and the OSM - Jennison Growth
Fund can buy mortgage-related securities that have interest rates that move
inversely to changes in general interest rates, based on a multiple of a
specific index. Although the value of a mortgage-related security may decline
when interest rates rise, the converse is not always the case.


      In periods of declining interest rates, mortgages are more likely to be
prepaid. Therefore, a mortgage-related security's maturity can be shortened by
unscheduled prepayments on the underlying mortgages. Therefore, it is not
possible to predict accurately the security's yield. The principal that is
returned earlier than expected may have to be reinvested in other investments
having a lower yield than the prepaid security. Therefore, these securities may
be less effective as a means of "locking in" attractive long-term interest
rates, and they may have less potential for appreciation during periods of
declining interest rates, than conventional bonds with comparable stated
maturities.

      Prepayment risks can lead to substantial fluctuations in the value of a
mortgage-related security. In turn, this can affect the value of the Funds'
shares. If a mortgage-related security has been purchased at a premium, all or
part of the premium the Funds paid may be lost if there is a decline in the
market value of the security, whether that results from interest rate changes or
prepayments on the underlying mortgages. In the case of stripped
mortgage-related securities, if they experience greater rates of prepayment than
were anticipated, the Fund may fail to recoup its initial investment on the
security.

      If interest rates rise rapidly, prepayments may occur at a slower rate
than expected and the expected maturity of long-term or medium-term securities
could lengthen as a result. That would cause their value and the prices of the
Fund's shares to fluctuate more widely in response to changes in interest rates.

      As with other debt securities, the values of mortgage-related securities
may be affected by changes in the market's perception of the creditworthiness of
the entity issuing the securities or guaranteeing them. Their values may also be
affected by changes in government regulations and tax policies.


      |_| Collateralized Mortgage Obligations. CMOs are multi-class bonds that
are backed by pools of mortgage loans or mortgage pass-through certificates.
They may be collateralized by:

(1)      pass-through certificates issued or guaranteed by Ginnie Mae, Fannie
         Mae, or Freddie Mac,
(2)      unsecuritized mortgage loans insured by the Federal Housing
         Administration or guaranteed by the Department of Veterans' Affairs,
(3)      unsecuritized conventional mortgages, (4) other mortgage-related
         securities, or (5) any combination of these.

      Each class of CMO, referred to as a "tranche," is issued at a specific
coupon rate and has a stated maturity or final distribution date. Principal
prepayments on the underlying mortgages may cause the CMO to be retired much
earlier than the stated maturity or final distribution date. The principal and
interest on the underlying mortgages may be allocated among the several classes
of a series of a CMO in different ways. One or more tranches may have coupon
rates that reset periodically at a specified increase over an index. These are
floating rate CMOs, and typically have a cap on the coupon rate. Inverse
floating rate CMOs have a coupon rate that moves in the reverse direction to an
applicable index. The coupon rate on these CMOs will increase as general
interest rates decrease. These are usually much more volatile than fixed rate
CMOs or floating rate CMOs.


      |_| U.S. Government Securities (All Funds except OSM - Mercury Advisors
S&P 500 Index Fund). These are securities issued or guaranteed by the U.S.
Treasury or other U.S. government agencies or federally-chartered corporate
entities referred to as "instrumentalities." The obligations of U.S. government
agencies or instrumentalities in which the Funds may invest may or may not be
guaranteed or supported by the "full faith and credit" of the United States.
"Full faith and credit" means generally that the taxing power of the U.S.
government is pledged to the payment of interest and repayment of principal on a
security. If a security is not backed by the full faith and credit of the United
States, the owner of the security must look principally to the agency issuing
the obligation for repayment. The owner might be able to assert a claim against
the United States if the issuing agency or instrumentality does not meet its
commitment. The Funds will invest in securities of U.S. government agencies and
instrumentalities only if the Adviser or Subadviser is satisfied that the credit
risk with respect to such instrumentality is acceptable.

            |_| U.S. Treasury Obligations. These include Treasury bills (which
have maturities of one year or less when issued), Treasury notes (which have
maturities of from one to ten (10) years when issued), and Treasury bonds
(maturities of more than ten (10) years when issued). Treasury securities are
backed by the full faith and credit of the United States as to timely payments
of interest and repayments of principal. They also can include U.S. Treasury
securities that have been "stripped" by a Federal Reserve Bank, and zero-coupon
U.S. Treasury securities.

            |_| Obligations Issued or Guaranteed by U.S. Government Agencies or
Instrumentalities. These include direct obligations and mortgage-related
securities that have different levels of credit support from the government.
Some are supported by the full faith and credit of the U.S. government, such as
Government National Mortgage Association pass-through mortgage certificates
(called "Ginnie Maes"). Some are supported by the right of the issuer to borrow
from the U.S. Treasury under certain circumstances, such as Federal National
Mortgage Association bonds ("Fannie Maes"). Others are supported only by the
credit of the entity that issued them, such as Federal Home Loan Mortgage
Corporation obligations ("Freddie Macs").

            |_| U.S. Government Mortgage-Related Securities (All Funds except
OSM - Mercury Advisors S&P 500 Index Fund). The Funds can invest in a variety
of mortgage-related securities that are issued by U.S. government agencies or
instrumentalities, some of which are described below. Mortgage-backed securities
are "pass-through" securities, meaning that principal and interest payments made
by the borrower on the underlying mortgages are passed through to the Fund. The
value of mortgage-backed securities, like that of traditional fixed-income
securities, typically increases when interest rates fall and decreases when
interest rates rise. However, mortgage-backed securities differ from traditional
fixed-income securities because of their potential for prepayment without
penalty. The price paid by a Fund for its mortgage-backed securities, the yield
the Fund expects to receive from such securities and the average life of the
securities are based on a number of factors, including the anticipated rate of
prepayment of the underlying mortgages. In a period of declining interest rates,
borrowers may prepay the underlying mortgages more quickly than anticipated,
thereby reducing the yield to maturity and the average life of the
mortgage-backed securities. Moreover, when a Fund reinvests the proceeds of a
prepayment in these circumstances, it will likely receive a rate of interest
that is lower than the rate on the security that was prepaid. To the extent that
a Fund purchases mortgage-backed securities at a premium, mortgage foreclosures
and principal prepayments may result in a loss to the extent of the premium
paid. If a Fund buys such securities at a discount, both scheduled payments of
principal and unscheduled prepayments will increase current and total returns
and will accelerate the recognition of income which, when distributed to
shareholders, will be taxable as ordinary income. In a period of rising interest
rates, prepayments of the underlying mortgages may occur at a slower than
expected rate, resulting in maturity extensions. This particular risk may
effectively change a security that was considered short or intermediate-term at
the time of purchase into a long-term security. Since long-term securities
generally fluctuate more widely in response to changes in interest rates than
shorter-term securities, maturity extension risk could increase the inherent
volatility of a Fund.


      |_| Zero-Coupon U.S. Government Securities (All Funds except OSM - Mercury
Advisors S&P 500 Index Fund and OSM - Gartmore Millennium Growth Fund II).
The Funds may buy zero-coupon U.S. government securities. These will typically
be U.S. Treasury Notes and Bonds that have been stripped of their unmatured
interest coupons, the coupons themselves, or certificates representing interests
in those stripped debt obligations and coupons.

      Zero-coupon securities do not make periodic interest payments and are sold
at a deep discount from their face value at maturity. The buyer recognizes a
rate of return determined by the gradual appreciation of the security, which is
redeemed at face value on a specified maturity date. This discount depends on
the time remaining until maturity, as well as prevailing interest rates, the
liquidity of the security and the credit quality of the issuer. The discount
typically decreases as the maturity date approaches.

      Because zero-coupon securities pay no interest and compound semi-annually
at the rate fixed at the time of their issuance, their value is generally more
volatile than the value of other debt securities that pay interest. Their value
may fall more dramatically than the value of interest-bearing securities when
interest rates rise. When prevailing interest rates fall, zero-coupon securities
tend to rise more rapidly in value because they have a fixed rate of return.

      A Fund's investment in zero-coupon securities may cause the Fund to
recognize income and make distributions to shareholders before it receives any
cash payments on the zero-coupon investment. To generate cash to satisfy those
distribution requirements, a Fund may have to sell portfolio securities that it
otherwise might have continued to hold or to use cash flows from other sources
such as the sale of the Fund's shares.


      |X| Money Market Instruments (All Funds except OSM - Mercury Advisors
S&P 500 Index Fund). The following is a brief description of the types of
money market securities the Funds (other than the OSM - Mercury Advisors S&P
500 Index Fund) can invest in. Those money market securities are high-quality,
short-term debt instruments that are issued by the U.S. government, corporations,
banks or other entities. They may have fixed, variable or floating interest
rates.

      |_| U.S. Government Securities. These include obligations issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities.

            |_| Bank Obligations. These include time deposits, certificates of
deposit and bankers' acceptances. Time deposits, other than overnight deposits,
may be subject to withdrawal penalties and, if so, they are deemed "illiquid"
investments.


      The Funds can purchase bank obligations that are fully insured by the
Federal Deposit Insurance Corporation ("FDIC"). The FDIC insures the deposits of
member banks up to $100,000 per account. Insured bank obligations may have a
limited market and a particular investment of this type may be deemed "illiquid"
unless the Adviser or Subadviser, as the case may be, determines that a
readily-available market exists for that particular obligation, or unless the
obligation is payable at principal amount plus accrued interest on demand or
within seven (7) days after demand.

? |_| Commercial Paper. Each Fund can invest in commercial paper if it is rated
within the top two (2) rating categories of S&P and Moody's. If the paper is
not rated, it may be purchased if issued by a company having a credit rating of
at least "AA" by S&P or "Aa" by Moody's.

      The Funds can buy commercial paper, including U.S. dollar-denominated
securities of foreign branches of U.S. banks, issued by other entities if the
commercial paper is guaranteed as to principal and interest by a bank,
government or corporation whose certificates of deposit or commercial paper may
otherwise be purchased by the Funds.


            |_| Variable Amount Master Demand Notes. Master demand notes are
corporate obligations that permit the investment of fluctuating amounts by each
of the Funds except the OSM - Mercury Advisors S&P 500 Index Fund and the
OSM - Mercury Advisors Focus Growth Fund at varying rates of interest under
direct arrangements between the Funds, as lender, and the borrower. They permit
daily changes in the amounts borrowed. The Funds have the right to increase the
amount under the note at any time up to the full amount provided by the note
agreement, or to decrease the amount. The borrower may prepay up to the full
amount of the note without penalty. These notes may or may not be backed by
bank letters of credit.


      Because these notes are direct lending arrangements between the lender and
borrower, it is not expected that there will be a trading market for them. There
is no secondary market for these notes, although they are redeemable (and thus
are immediately repayable by the borrower) at principal amount, plus accrued
interest, at any time. Accordingly, the Funds' right to redeem such notes is
dependent upon the ability of the borrower to pay principal and interest on
demand.

      Each of the Funds has no limitations on the type of issuer from whom these
notes will be purchased. However, in connection with such purchases and on an
ongoing basis, the Adviser or Subadviser will consider the earning power, cash
flow and other liquidity ratios of the issuer, and its ability to pay principal
and interest on demand, including a situation in which all holders of such notes
made demand simultaneously. Investments in master demand notes are subject to
the limitation on investments by each of the Funds in illiquid securities,
described in the Prospectus.


      |X| Portfolio Turnover. "Portfolio turnover" describes the rate at which a
Fund traded its portfolio securities during its last fiscal year. For example,
if a Fund sold all of its securities during the year, its portfolio turnover
rate would have been 100%. Each Fund's portfolio turnover rate will fluctuate
from year to year. Each of the Funds, except the OSM - Mercury Advisors S&P
500 Index Fund, may have a portfolio turnover rate of more than 100% annually.


      Increased portfolio turnover creates higher brokerage and transaction
costs for a Fund, which can reduce its overall performance. Additionally, the
realization of capital gains from selling portfolio securities may result in
distributions of taxable long-term capital gains to shareholders, since each
Fund will normally distribute all of its capital gains realized each year, to
avoid excise taxes under the Internal Revenue Code.


      The portfolio turnover of the Master Fund of OSM - Mercury Advisors Focus
Growth Fund increased to 275.69% for the fiscal year ended November 30, 2002,
from 137.66% for the period ended November 30, 2001. The portfolio turnover was
due in large part to the extraordinary volatility of the markets during the
year.


Other Investment Techniques and Strategies. In seeking its objective, each Fund
from time to time can use the types of investment strategies and investments
described below. They are not required to use all of these strategies at all
times, and at times may not use them.

      |X| Foreign Securities (All Funds except OSM - Mercury Advisors S&P
500 Index Fund). Each Fund can invest in foreign securities. "Foreign securities"
include equity and debt securities of companies organized under the laws of
countries other than the United States and debt securities of foreign
governments that are traded on foreign securities exchanges or in foreign
over-the-counter markets. Each Fund can purchase equity and debt securities
(which may be denominated in U.S. dollars or non-U.S. currencies) issued by
foreign corporations, or that are issued or guaranteed by certain supranational
entities (described below), or foreign governments or their agencies or
instrumentalities. These include securities issued by U.S. corporations
denominated in non-U.S. currencies. In normal market conditions the Funds do not
expect to hold significant amounts of foreign debt securities.

      Securities of foreign issuers that are represented by American Depository
Receipts ("ADRs") or that are listed on a U.S. securities exchange or traded in
the U.S. over-the-counter markets are not considered "foreign securities" for
the purpose of each Fund's investment allocations. That is because they are not
subject to some of the special considerations and risks, discussed below, that
apply to foreign securities traded and held abroad.

      Investing in foreign securities offers potential benefits not available
from investing solely in securities of domestic issuers. They include the
opportunity to invest in foreign issuers that appear to offer growth potential,
or in foreign countries with economic policies or business cycles different from
those of the U.S., or to reduce fluctuations in portfolio value by taking
advantage of foreign stock markets that do not move in a manner parallel to U.S.
markets. Each Fund will hold foreign currency only in connection with the
purchase or sale of foreign securities.

      The OSM - Mercury Advisors Focus Growth Fund and the OSM - Jennison Growth
Fund may invest in the securities of foreign issuers in the form of ADRs,
European Depository Receipts ("EDRs") or other securities convertible into
securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted. ADRs are receipts typically issued by an American bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. EDRs are receipts issued in Europe which evidence a similar
ownership arrangement. Generally, ADRs, which are issued in registered form, are
designed for use in the United States securities markets, and EDRs, which are
issued in bearer form, are designed for use in European securities markets. The
OSM - Mercury Advisors Focus Growth Fund may invest in unsponsored ADRs. The
issuers of unsponsored ADRs are not obligated to disclose material information
in the United States and, therefore, there may not be a correlation between such
information and the market value of such ADRs.

      ADR facilities may be either "sponsored" or "un-sponsored." While
sponsored and un-sponsored ADR facilities are similar, distinctions exist
between the rights and duties of ADR holders and market practices. Sponsored
facilities have the backing or participation of the underlying foreign issuers.
Un-sponsored facilities do not have the participation by or consent of the
issuer of the deposited shares. Un-sponsored facilities usually request a letter
of non-objection from the issuer. Holders of un-sponsored ADRs generally bear
all the costs of such facility. The costs of the facility can include deposit
and withdrawal fees, currency conversion and other service fees. The depository
of an un-sponsored facility may not have a duty to distribute shareholder
communications from the issuer or to pass through voting rights. Issuers of
un-sponsored ADRs do not have an obligation to disclose material information
about the foreign issuers in the U.S. As a result, the value of the un-sponsored
ADR may not correlate with the value of the underlying security trading abroad
or any material information about the security or the issuer disseminated
abroad. Sponsored facilities enter into an agreement with the issuer that sets
out rights and duties of the issuer, the depository and the ADR holder. The
sponsored agreement also allocates fees among the parties. Most sponsored
agreements provide that the depository will distribute shareholder notices,
voting instructions and other communications.

      |_| Risks of Foreign Investing. Investments in foreign securities may
offer special opportunities for investing but also present special additional
risks and considerations not typically associated with investments in domestic
securities. Some of these additional risks are: o reduction of income by foreign
taxes; o fluctuation in value of foreign investments due to changes in currency
rates  or  currency  control   regulations  (for  example,   currency
blockage);
o     transaction charges for currency exchange;
o     lack of public information about foreign issuers;
o     lack of uniform  accounting,  auditing and financial reporting standards
         in foreign  countries  comparable  to those  applicable  to  domestic
         issuers;
o     less volume on foreign exchanges than on U.S. exchanges;
o     greater  volatility  and less  liquidity on foreign  markets than in the
         U.S.;
o     less  governmental  regulation of foreign  issuers,  stock exchanges and
         brokers than in the U.S.;
o     greater difficulties in commencing lawsuits;
o     higher brokerage commission rates than in the U.S.;
o     increased  risks of delays in  settlement of portfolio  transactions  or
         loss of certificates for portfolio securities;
o     possibilities   in  some   countries  of   expropriation,   confiscatory
         taxation,  political,  financial  or social  instability  or  adverse
         diplomatic developments; and
o     unfavorable differences between the U.S. economy and foreign economies.

      In the past, U.S. Government policies have discouraged certain investments
abroad by U.S. investors, through taxation or other restrictions, and it is
possible that such restrictions could be re-imposed.

            |_| Special Risks of Emerging Markets. Emerging and developing
         markets abroad may also offer special opportunities for growth
investing but have greater risks than more developed foreign markets, such as
those in Europe, Canada, Australia, New Zealand and Japan. There may be even
less liquidity in their securities markets, and settlements of purchases and
sales of securities may be subject to additional delays. They are subject to
greater risks of limitations on the repatriation of income and profits because
of currency restrictions imposed by local governments. Those countries may also
be subject to the risk of greater political and economic instability, which can
greatly affect the volatility of prices of securities in those countries.


      |X| Passive Foreign Investment Companies. Each Fund other than OSM -
Mercury Advisors S&P 500 Index Fund may purchase the securities of certain
foreign investment corporations called passive foreign investment companies
("PFICs"). Such entities have been the only or primary way to invest in certain
countries because some foreign countries limit, or prohibit, all direct foreign
investment in the securities of companies domiciled therein. However, the
governments of some countries have authorized the organization of investment
funds to permit indirect foreign investment in such securities. For tax
purposes, these funds also may be PFICs.

      Each Fund is subject to certain percentage limitations under the 1940 Act
relating to the purchase of securities of investment companies, and,
consequently, the Funds may have to subject any of its investment in other
investment companies, including PFICs, to the limitation that no more than 10%
of the value of the Funds' total assets may be invested in such securities. In
addition to bearing their proportionate share of a fund's expenses (management
fees and operating expenses), shareholders will also indirectly bear similar
expenses of such entities. Like other foreign securities, interests in PFICs
also involve the risk of foreign securities, as described above.


      |X| Investing in Small, Unseasoned Companies (All Funds except OSM -
Mercury Advisors S&P 500 Index Fund). Each Fund can invest in securities of
small, unseasoned companies. These are companies that have been in operation for
less than three (3) years, including the operations of any predecessors.
Securities of these companies may be subject to volatility in their prices. They
may have a limited trading market, which may adversely affect the Fund's ability
to dispose of them and can reduce the price a Fund might be able to obtain for
them. Other investors that own a security issued by a small, unseasoned issuer
for which there is limited liquidity might trade the security when a Fund is
attempting to dispose of its holdings of that security. In that case the Fund
might receive a lower price for its holdings than might otherwise be obtained.
These are more speculative securities and can increase the Funds' overall
portfolio risks.

      |X| Real Estate Investment Trusts (All Funds). Each Fund may invest in
equity Real Estate Investment Trusts ("REITs"). REITs are entities which either
own properties or make construction or mortgage loans. Equity REITs may also
include operating or financing companies. Equity REITs own real estate directly
and the value of, and income earned by, the Fund depends upon the income of the
underlying properties and the rental income they earn. Equity REITs can also
realize capital gains by selling properties that have appreciated in value. The
value of securities issued by REITs are affected by tax and regulatory
requirements and by perceptions of management skill. They are also subject to
heavy cash flow dependency, defaults by borrowers or tenants, self-liquidation,
the possibility of failing to qualify for tax-free status under the Internal
Revenue Code, and failing to maintain exemption from the 1940 Act. Because REITs
normally pay on advisory fee and other expenses, a shareholder in these Funds
may be subject to duplicative fees and expenses.


      |X| Firm Commitments and When-Issued Securities (All Funds). Each Fund may
purchase securities on a firm commitment basis, including when-issued
securities. Securities purchased on a firm commitment basis are purchased for
delivery beyond the normal settlement date at a stated price and yield. No
income accrues to the purchaser of a security on a firm commitment basis prior
to delivery. Such securities are recorded as an asset and are subject to changes
in value based upon changes in the general level of interest rates. Purchasing a
security on a firm commitment basis can involve a risk that the market price at
the time of delivery may be lower than the agreed upon purchase price, in which
case there could be an individual loss at the time of delivery. The Fund will
only make commitments to purchase securities on a firm commitment basis with the
intention of actually acquiring the securities, but may sell them before the
settlement date if it is deemed advisable. The Fund will identify on its books
liquid assets at least equal in value to the value of the Fund's purchase
commitments until the Fund pays for the investment.


      |X| Repurchase Agreements and Purchase and Sale Contracts (All Funds).
Each Fund may invest in securities pursuant to repurchase agreements and each
Fund other than the OSM - Mercury Advisors S&P 500 Index Fund may invest in
purchase and sale contracts. Under a repurchase agreement or a purchase and sale
contract, the seller agrees, upon entering into the contract with the Fund, to
repurchase the security at a mutually agreed-upon time and price in a specified
currency, thereby determining the yield during the term of the agreement. This
results in a fixed rate of return insulated from market fluctuations during such
period although it may be affected by currency fluctuations. In the case of
repurchase agreements, the price at which the trades are conducted do not
reflect accrued interest on the underlying obligation; whereas, in the case of
purchase and sale contracts, the prices take into account accrued interest. Such
agreements usually cover short periods, such as under one week. Repurchase
agreements may be construed to be collateralized loans by the purchaser to the
seller secured by the securities transferred to the purchaser. In the case of a
repurchase agreement, as a purchaser, the Fund will require the seller to
provide additional collateral if the market value of the securities falls below
the repurchase price at any time during the term of the repurchase agreement;
the Fund does not have the right to seek additional collateral in the case of
purchase and sale contracts. In the event of default by the seller under a
repurchase agreement construed to be a collateralized loan, the underlying
securities are not owned by the Fund but only constitute collateral for the
seller's obligation to pay the repurchase price. Therefore, the Fund may suffer
time delays and incur costs or possible losses in connection with the
disposition of the collateral. Approved vendors include U.S. commercial banks,
U.S. branches of foreign banks, or broker-dealers that have been designated as
primary dealers in government securities. They must meet credit requirements set
by OppenheimerFunds, Inc. (the "Manager") (or in the case of OSM - Mercury
Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth Fund,
credit requirements set by the Advisor) from time to time. A purchase and sale
contract differs from a repurchase agreement in that the contract arrangements
stipulate that the securities are owned by the Fund. In the event of a default
under such a repurchase agreement or under a purchase and sale contract, instead
of the contractual fixed rate, the rate of return to the Fund shall be dependent
upon intervening fluctuations of the market value of such securities and the
accrued interest on the securities. In such event, the Fund would have rights
against the seller for breach of contract with respect to any losses arising
from market fluctuations following the failure of the seller to perform. While
the substance of purchase and sale contracts is similar to repurchase agreements,
because of the different treatment with respect to accrued interest and additional
collateral, Fund management believes that purchase and sale contracts are not
repurchase agreements as such term is understood in the banking and brokerage
community. No Fund may invest more than 15% of its net assets in repurchase
agreements or purchase and sale contracts maturing in more than seven (7) days
together with all other illiquid investments.


      Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Funds, along with other affiliated entities managed by the
Manager, may transfer uninvested cash balances into one or more joint repurchase
accounts. These balances are invested in one or more repurchase agreements,
secured by U.S. government securities. Securities that are pledged as collateral
for repurchase agreements are held by a custodian bank until the agreements
mature. Each joint repurchase arrangement requires that the market value of the
collateral be sufficient to cover payments of interest and principal; however,
in the event of default by the other party to the agreement, retention or sale
of the collateral may be subject to legal proceedings.


      |X| Illiquid and Restricted Securities (All Funds). Each Fund may purchase
illiquid or restricted securities. Under the policies and procedures established
by the Funds' Board of Trustees (or, in the case of OSM - Mercury Advisors S&P
500 Index Fund and OSM - Mercury Advisors Focus Growth Fund, the Board of
Trustees of the applicable Master Fund), the Adviser or Subadviser determines
the liquidity of certain of a Fund's investments. To enable a Fund to sell its
holdings of a restricted security not registered under the Securities Act of
1933, as amended (the "Securities Act") that Fund may have to cause those
securities to be registered. The expenses of registering restricted securities
may be negotiated by a Fund with the issuer at the time a Fund buys the
securities. When a Fund must arrange registration because a Fund wishes to sell
the security, a considerable period may elapse between the time the decision is
made to sell the security and the time the security is registered so that a Fund
could sell it. A Fund would bear the risks of any downward price fluctuation
during that period.

      Each Fund can also acquire restricted securities through private
placements. Those securities have contractual restrictions on their public
resale. Those restrictions might limit the Funds' ability to dispose of the
securities and might lower the amount a Fund could realize upon the sale.

      Each Fund has limitations that apply to purchases of restricted
securities, as stated in the Prospectus. Those percentage restrictions are not
fundamental policies and do not limit purchases of restricted securities that
are eligible for sale to qualified institutional purchasers under Rule 144A of
the Securities Act, if those securities have been determined to be liquid by the
Adviser or Subadviser under Board-approved guidelines (or, in the case of OSM -
Mercury Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth
Fund, guidelines approved by the Board of Trustees of the applicable Master
Fund). Those guidelines take into account the trading activity for such
securities and the availability of reliable pricing information, among other
factors. If there is a lack of trading interest in a particular Rule 144A
security, each of a Fund's holdings of that security may be considered to be
illiquid. Illiquid securities include repurchase agreements maturing in more
than seven (7) days.

      |X| 144A Securities (All Funds). Each Fund may purchase restricted
securities that can be offered and sold to "qualified institutional buyers"
under Rule 144A under the Securities Act. The Board of Trustees (or, in the case
of OSM - Mercury Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus
Growth Fund, the Board of Trustees of the applicable Master Fund) has determined
to treat as liquid Rule 144A securities in accordance with the policies and
procedures adopted by the relevant Fund's Board of Trustees. The Board of
Trustees has adopted guidelines and delegated to the Adviser or Subadviser, as
the case may be, the daily function of determining and monitoring liquidity of
restricted securities. The relevant Board of Trustees, however, will retain
sufficient oversight and be ultimately responsible for the determinations. Since
it is not possible to predict with assurance exactly how this market for
restricted securities sold and offered under Rule 144A will continue to develop,
the relevant Board of Trustees will carefully monitor investments in these
securities. This investment practice could have the effect of increasing the
level of illiquidity in a Fund to the extent that qualified institutional buyers
become for a time uninterested in purchasing these securities.

      |X| Loans of Portfolio Securities (All Funds). To raise cash for liquidity
purposes, each Fund can lend its portfolio securities to brokers, dealers and
other types of financial institutions approved by the Funds' Board of Trustees.
These loans are limited to not more than 25% of the value of a Fund's total
assets (33 1/3% for the OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Mercury Advisors Focus Growth Fund). Each Fund except the OSM - Mercury Advisors
S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund, currently
does not intend to engage in loans of securities, but if it does so, such loans
will not likely exceed 5% of each of the Fund's total assets.

      There are some risks in connection with securities lending. A Fund might
experience a delay in receiving additional collateral to secure a loan, or a
delay in recovery of the loaned securities if the borrower defaults. A Fund must
receive collateral for a loan. Under current applicable regulatory requirements
(which are subject to change), on each business day the loan collateral must be
at least equal to the value of the loaned securities. It must consist of cash,
bank letters of credit, securities of the U.S. Government or its agencies or
instrumentalities, or other cash equivalents in which a Fund is permitted to
invest. To be acceptable as collateral, letters of credit must obligate a bank
to pay amounts demanded by a Fund if the demand meets the terms of the letter.
The terms of the letter of credit and the issuing bank both must be satisfactory
to the Fund.

      When it lends securities, a Fund receives amounts equal to the dividends
or interest on loaned securities. It also receives one or more of (a) negotiated
loan fees, (b) interest on securities used as collateral, and (c) interest on
any short-term debt securities purchased with such loan collateral. Either type
of interest may be shared with the borrower. A Fund may also pay reasonable
finder's, lending agent, custodian and administrative fees in connection with
these loans. The terms of each Fund's loans must meet applicable tests under the
Internal Revenue Code and must permit each Fund to reacquire loaned securities
on five (5) days' notice or in time to vote on any important matter.


      The Master Fund(s) have received an exemptive order from the Securities
and Exchange Commission (the "Commission") permitting them to lend portfolio
securities to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch") or its affiliates, and to retain an affiliate of the Master Funds as
lending agent. See "Brokerage Policies of the Funds," below.

      |X| Short Sales (OSM - Gartmore Millennium Growth Fund II, OSM - Mercury
Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth Fund).
Generally, to complete a short sale transaction, the Fund will borrow the
security to make delivery to the buyer. The Fund is then obligated to replace
the security borrowed. If the price of a security sold short goes up between the
time of the short sale and the time the Fund must deliver the security to the
lender, the Fund will incur a loss. The price at the time of replacement may be
more or less than the price at which the security was sold by the Fund. Until
the security is replaced, the Fund is required to pay to the lender any interest
which accrues during the period of the loan. To borrow the security, the Fund
may be required to pay a premium which would increase the cost of the security
sold. The proceeds of the short sale will be retained by the broker to the
extent necessary to meet margin requirements until the short position is closed
out. Until the Fund replaces the borrowed security, it will (a) segregated on
its books of liquid assets cash or liquid securities at such a level that the
amount deposited in the account plus the amount deposited with the broker as
collateral will equal the current market value of the security sold short or (b)
otherwise cover its short position.


      |X| Borrowing for Leverage (All Funds). Each Fund has the ability to
borrow up to 33 1/3% of the value of its total assets from banks on an unsecured
basis to invest the borrowed funds in portfolio securities. This speculative
technique is known as "leverage." A Fund may borrow only from banks. Under
current regulatory requirements, borrowings can be made only to the extent that
the value of a Fund's assets, less its liabilities other than borrowings, is
equal to at least 300% of all borrowings (including the proposed borrowing). If
the value of a Fund's assets fails to meet this 300% asset coverage requirement,
a Fund will reduce its bank debt within three (3) days to meet the requirement.
To do so, a Fund might have to sell a portion of its investments at a
disadvantageous time.

      A Fund will pay interest on these loans, and that interest expense will
raise the overall expenses of that Fund and reduce its returns. If it does
borrow, its expenses will be greater than comparable funds that do not borrow
for leverage. Additionally, a Fund's net asset value per share might fluctuate
more than that of funds that do not borrow. Currently, each Fund does not
contemplate using this technique, but if it does so, it will not likely do so to
a substantial degree.


      |X| Interfund Borrowing and Lending Arrangements. Consistent with its
fundamental policies and pursuant to an exemptive order issued by the Securities
and Exchange Commission ("SEC"), each Fund other than the OSM - Mercury Advisors
S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund may engage
in borrowing and lending activities with other funds in the OppenheimerFunds
complex. Borrowing money from affiliated funds may afford the Funds the
flexibility to use the most cost-effective alternative to satisfy its borrowing
requirements. Lending money to an affiliated fund may allow the Funds to obtain
a higher rate of return than it could from interest rates on alternative
short-term investments. Implementation of interfund lending will be accomplished
consistent with applicable regulatory requirements, including the provisions of
the SEC order.

      o Interfund Borrowing. A Fund will not borrow from affiliated funds unless
the terms of the borrowing arrangement are at least as favorable as the terms a
Fund could otherwise negotiate with a third party. To assure that a Fund will
not be disadvantaged by borrowing from an affiliated fund, certain safeguards
may be implemented. Examples of these safeguards include the following:
o          a Fund will not borrow money from affiliated funds unless the
           interest rate is more favorable than available bank loan rates;
o          a Fund's borrowing from affiliated funds must be consistent with its
           investment objective and investment policies;
o          the loan rates will be the average of the overnight repurchase
           agreement rate available through the OppenheimerFunds joint
           repurchase agreement account and a pre-established formula based on
           quotations from independent banks to approximate the lowest interest
           rate at which bank loans would be available to a Fund;
o          if a Fund has outstanding borrowings from all sources greater than
           10% of its total assets, then the Fund must secure each additional
           outstanding interfund loan by segregating liquid assets of the Fund
           as collateral;
o          a Fund cannot borrow from an affiliated fund in excess of 125% of its
           total redemptions for the preceding seven days;
o     each interfund loan may be repaid on any day by a Fund; and
o     the Trustees will be provided with a report of all interfund loans and
           the Trustees will monitor all such borrowings to ensure that the
           Fund's participation is appropriate.

      There is a risk that a borrowing fund could have a loan called on one
day's notice. In that circumstance, a Fund might have to borrow from a bank at a
higher interest cost if money to lend were not available from another
Oppenheimer fund.

o Interfund Lending. To assure that a Fund will not be disadvantaged by making
loans to affiliated funds, certain safeguards will be implemented. Examples of
these safeguards include the following:

o              a Fund will not lend money to affiliated funds unless the
               interest rate on such loan is determined under the terms of the
               exemptive order;
o     a Fund may not make interfund loans in excess of 15% of its net assets;
o     an interfund loan to any one affiliated fund shall not exceed 5% of a
               Fund's net assets;
o an interfund loan may not be outstanding for more than seven days; o each
interfund loan may be called on one business day's notice; and o the Manager
will provide the Trustees reports on all interfund loans
               demonstrating that a Fund's participation is appropriate and that
               the loan is consistent with its investment objectives and
               policies.

      When a Fund lends assets to another affiliated fund, the Fund is subject
to the risk that the borrowing fund may fail to repay the loan.

Non-Diversification. The OSM - Salomon Brothers All Cap Fund, the OSM - Mercury
Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund
are classified as "non-diversified" funds under the 1940 Act, which means that
each such Fund is not limited by the 1940 Act in the proportion of its assets that
may be invested in the obligations of a single issuer. Each Fund, however,
intends to comply with the diversification requirements imposed by the Internal
Revenue Code in order to continue to qualify as a regulated investment company.
To the extent those Funds invest a greater proportion of their assets in the
securities of a smaller number of issuers, those Funds may be more susceptible
to any single economic, political or regulatory occurrence than a more widely
diversified fund and may be subject to greater risk of loss with respect to its
portfolio.

      |X| Derivatives (All Funds). Each Fund can invest in a variety of
derivative investments to seek income for liquidity needs or for bona fide
hedging purposes, including anticipatory hedging. Some derivative investments a
Fund can use are the hedging instruments described below in this Statement of
Additional Information. However, each Fund except for the OSM - QM Active
Balanced Fund and OSM - Salomon Brothers All Cap Fund does not use, and does not
currently contemplate using, derivatives or hedging instruments to a significant
degree and each Fund is not obligated to use them in seeking its objective.

      Some of the derivative investments a Fund can use include "debt
exchangeable for common stock" of an issuer or "equity-linked debt securities"
of an issuer. At maturity, the debt security is exchanged for common stock of
the issuer or it is payable in an amount based on the price of the issuer's
common stock at the time of maturity. Both alternatives present a risk that the
amount payable at maturity will be less than the principal amount of the debt
because the price of the issuer's common stock might not be as high as the
Adviser or Subadviser expected.

      |X| Investment in Other Investment Companies. Each Fund except the OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth
Fund can invest up to 10% of its total assets in shares of other investment
companies. They can invest up to 5% of their total assets in any one investment
company, but cannot own more than 3% of the outstanding voting securities of
that investment company. These limitations do not apply to shares acquired in a
merger, consolidation, reorganization or acquisition. The OSM - Mercury Advisors
S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund are feeder
funds that invest 100% of their assets in a corresponding Master Fund, which is
a registered investment company. The Master Funds can also invest their assets
in shares of investment companies when permitted by applicable law.

      Investment in another investment company may involve the payment of
substantial premiums above the value of such investment company's portfolio
securities and is subject to limitations under the Investment Company Act of
1940 (the "Investment Company Act"). Each Fund does not intend to invest in
other investment companies unless the Adviser or Subadviser believes that the
potential benefits of the investment justify the payment of any premiums or
sales charges. As a shareholder in an investment company, a Fund would be
subject to its ratable share of that investment company's expenses, including
its advisory and administration fees. At the same time, that Fund would bear its
own management fees and other expenses.

      |X| Hedging (All Funds). Although each Fund does not anticipate the
extensive use of hedging instruments, each Fund can use hedging instruments.
They are not required to do so in seeking their goal. To attempt to protect
against declines in the market value of a Fund's portfolio, to permit a Fund to
retain unrealized gains in the value of portfolio securities which have
appreciated, or to facilitate selling securities for investment reasons, each
Fund could:
      |_|   sell futures contracts,
      |_|   buy puts on such futures or on securities, or
      |_|   write covered calls on securities or futures. Covered calls can
         also be used to seek income, but the Adviser or Subadviser does not
         expect to engage extensively in that practice.

      A Fund can use hedging to establish a position in the securities market as
a temporary substitute for purchasing particular securities. In that case a Fund
would normally seek to purchase the securities and then terminate that hedging
position. A Fund might also use this type of hedge to attempt to protect against
the possibility that its portfolio securities would not be fully included in a
rise in value of the market. To do so a Fund could:
      |_|buy futures, or
      |_|buy calls on such futures or on securities.

      Each Fund's strategy of hedging with futures and options on futures will
be incidental to each Fund's activities in the underlying cash market. The
particular hedging instruments the Fund can use are described below. A Fund may
employ new hedging instruments and strategies when they are developed, if those
investment methods are consistent with each Fund's investment objective and are
permissible under applicable regulations governing each Fund. Each Fund will
utilize segregated accounts in connection with their purchase of hedging
instruments in appropriate cases.

      |_| Futures. The Fund can buy and sell futures contracts that relate to
(1) broadly-based stock indices (these are referred to as "stock index
futures"), (2) an individual stock ("single stock futures"), (3) other
broadly-based securities indices (these are referred to as "financial futures"),
(4) debt securities (these are referred to as "interest rate futures") and (5)
foreign currencies (these are referred to as "forward contracts").

      A broadly-based stock index is used as the basis for trading stock index
futures. They may in some cases be based on stocks of issuers in a particular
industry or group of industries. A stock index assigns relative values to the
common stocks included in the index and its value fluctuates in response to the
changes in value of the underlying stocks. A stock index cannot be purchased or
sold directly. Financial futures are similar contracts based on the future value
of the basket of securities that comprise the index. These contracts obligate
the seller to deliver, and the purchaser to take, cash to settle the futures
transaction. There is no delivery made of the underlying securities to settle
the futures obligation. Either party may also settle the transaction by entering
into an offsetting contract.

      An interest rate future obligates the seller to deliver (and the purchaser
to take) cash or a specified type of debt security to settle the futures
transaction. Either party could also enter into an offsetting contract to close
out the position. Similarly, a single stock future obligates the seller to
deliver (and the purchaser to take) cash or a specified equity security to
settle the futures transaction. Either party could also enter into an offsetting
contract to close out the position. Single stock futures trade on a very limited
number of exchanges, with contracts typically not fungible among the exchanges.

      No payment is paid or received by a Fund on the purchase or sale of a
future. Upon entering into a futures transaction, a Fund will be required to
deposit an initial margin payment with the futures commission merchant (the
"futures broker"). Initial margin payments will be deposited with the Fund's
custodian bank in an account registered in the futures broker's name. However,
the futures broker can gain access to that account only under specified
conditions. As the future is marked to market (that is, its value on the Fund's
books is changed) to reflect changes in its market value, subsequent margin
payments, called variation margin, will be paid to or by the futures broker
daily.


      At any time prior to expiration of the future, a Fund may elect to close
out its position by taking an opposite position, at which time a final
determination of variation margin is made and any additional cash must be paid
by or released to the Fund. Any loss or gain on the future is then realized by
the Fund for tax purposes. All futures transactions (except forward contracts)
are effected through a clearinghouse associated with the exchange on which the
contracts are traded.

            |_| Put and Call Options. Each Fund can buy and sell certain kinds
of put options ("puts") and call options ("calls"). Each Fund can buy and sell
exchange-traded and over-the-counter put and call options, including options on
indices, securities, currencies, commodities and futures.

            |_| Writing Covered Call Options. Each Fund can write (that is,
sell) covered calls. If a Fund sells a call option, it must be covered, other
than with respect to closing transactions. That means a Fund must own the
security subject to the call while the call is outstanding, or, for certain
types of calls, the call may be covered by segregating liquid assets to enable a
Fund to satisfy its obligations if the call is exercised.

      When a Fund writes a call, it receives cash (a premium). In the case of a
call on a security, a Fund agrees to sell the underlying security to a purchaser
of a corresponding call on the same security during the call period at a fixed
exercise price regardless of market price changes during the call period. The
exercise price may differ from the market price of the underlying security. A
Fund has the risk of loss that the price of the underlying security may decline
during the call period. That risk may be offset to some extent by the premium
the Fund receives. If the value of the investment does not rise above the call
price, it is likely that the call will lapse without being exercised. In that
case the Fund would keep the cash premium and the investment.

    When a Fund writes a call on an index, it receives cash (a premium). If the
buyer of the call exercises it, the Fund will pay an amount of cash equal to the
difference between the closing price of the call and the exercise price,
multiplied by a specified multiple that determines the total value of the call
for each point of difference. If the value of the underlying investment does not
rise above the call price it is likely that the call will lapse without being
exercised. In that case, the Fund would keep the cash premium.


      With respect to the OSM - QM Active Balanced Fund, OSM - Jennison Growth
Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore Millennium Growth
Fund II, the Custodian, or a securities depository acting for the Custodian,
will act as the escrow agent for OSM - QM Active Balanced Fund, OSM - Jennison
Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore Millennium
Growth Fund II, through the facilities of the Options Clearing Corporation
("OCC"), as to the investments on which each such Fund has written calls traded
on exchanges or as to other acceptable escrow securities. In that way, no margin
will be required for such transactions. OCC will release the securities on the
expiration of the option or when a Fund enters into a closing transaction.


      To terminate its obligation on a call it has written, a Fund may purchase
a corresponding call in a "closing purchase transaction." The Fund will then
realize a profit or loss, depending upon whether the net of the amount of the
option transaction costs and the premium received on the call the Fund wrote is
more or less than the price of the call the Fund purchases to close out the
transaction. A Fund may realize a profit if the call expires unexercised,
because the Fund will retain the underlying security and the premium it received
when it wrote the call. Any such profits are considered short-term capital gains
for federal income tax purposes, as are the premiums on lapsed calls. When
distributed by a Fund they are taxable as ordinary income. If a Fund cannot
effect a closing purchase transaction due to the lack of a market, it will have
to hold the callable securities until the call expires or is exercised.

      Each Fund may also write calls on a futures contract without owning the
futures contract or securities deliverable under the contract. To do so, at the
time the call is written, a Fund must cover the call by segregating an
equivalent dollar amount of liquid assets. A Fund will segregate additional
liquid assets if the value of the segregated assets drops below 100% of the
current value of the future. Because of this segregation requirement, in no
circumstances would a Fund's receipt of an exercise notice as to that future
require the Fund to deliver a futures contract. It would simply put the Fund in
a short futures position, which is permitted by each Fund's hedging policies.

            |_| Writing Put Options. Each Fund can sell put options. A put
option on a security gives the purchaser the right to sell, and the writer the
obligation to buy, the underlying security at the exercise price during the
option period.

      If a Fund sells a put option, it must be covered by segregated liquid
assets, other than with respect to closing transactions. The premium a Fund
receives from writing a put option represents a profit, as long as the price of
the underlying investment remains above the exercise price of the put. However,
a Fund also assumes the obligation during the option period to buy the
underlying investment from the buyer of the put at the exercise price, even if
the value of the investment falls below the exercise price. If a Fund writes a
put that expires unexercised, a Fund realizes a gain in the amount of the
premium less transaction costs. If the put is exercised, a Fund must fulfill its
obligation to purchase the underlying investment at the exercise price. That
price will usually exceed the market value of the investment at that time. In
that case, a Fund may incur a loss if it sells the underlying investment. That
loss will be equal to the sum of the sale price of the underlying investment and
the premium received minus the sum of the exercise price and any transaction
costs incurred.

      When writing a put option on a security, to secure its obligation to pay
for the underlying security a Fund will deposit in escrow liquid assets with a
value equal to or greater than the exercise price of the underlying security. A
Fund therefore forgoes the opportunity of investing the segregated assets or
writing calls against those assets.

      As long as a Fund's obligation as the put writer continues, it may be
assigned an exercise notice by the exchange or broker-dealer through which the
put was sold. That notice will require a Fund to exchange currency (for a put
written on a currency) at the specified rate of exchange or to take delivery of
the underlying security and pay the exercise price. A Fund has no control over
when it may be required to purchase the underlying security, since it may be
assigned an exercise notice at any time prior to the termination of its
obligation as the writer of the put. That obligation terminates upon expiration
of the put. It may also terminate if, before a Fund receives an exercise notice,
a Fund effects a closing purchase transaction by purchasing a put of the same
series as it sold. Once a Fund has been assigned an exercise notice, it cannot
effect a closing purchase transaction.

      Each Fund may decide to effect a closing purchase transaction to realize a
profit on an outstanding put option it has written or to prevent the underlying
security from being put. Effecting a closing purchase transaction will permit a
Fund to write another put option on the security or to sell the security and use
the proceeds from the sale for other investments. A Fund will realize a profit
or loss from a closing purchase transaction depending on whether the cost of the
transaction is less or more than the premium received from writing the put
option. Any profits from writing puts are considered short-term capital gains
for federal tax purposes, and when distributed by a Fund, are taxable as
ordinary income.

            |_| Purchasing Calls and Puts. Each Fund can purchase calls to
protect against the possibility that the Fund's portfolio will not participate
in an anticipated rise in the securities market. When the Fund buys a call
(other than in a closing purchase transaction), it pays a premium. The Fund then
has the right to buy the underlying investment from a seller of a corresponding
call on the same investment during the call period at a fixed exercise price. A
Fund benefits only if it sells the call at a profit or if, during the call
period, the market price of the underlying investment is above the sum of the
call price plus the transaction costs and the premium paid for the call and the
Fund exercises the call. If a Fund does not exercise the call or sell it
(whether or not at a profit), the call will become worthless at its expiration
date. In that case the Fund will have paid the premium but lost the right to
purchase the underlying investment.

      Each Fund other than the OSM - Mercury Advisors S&P 500 Index Fund can
buy puts whether or not it holds the underlying investment in its portfolio. The
Mercury S&P 500 Index Fund can buy put options on securities held in its
portfolio or securities indices the performance of which is substantially
replicated by securities held in its portfolio. When a Fund purchases a put, it
pays a premium and, except as to puts on indices, has the right to sell the
underlying investment to a seller of a put on a corresponding investment during
the put period at a fixed exercise price.

      Buying a put on securities or futures a Fund owns enables that Fund to
attempt to protect itself during the put period against a decline in the value
of the underlying investment below the exercise price by selling the underlying
investment at the exercise price to a seller of a corresponding put. If the
market price of the underlying investment is equal to or above the exercise
price and, as a result, the put is not exercised or resold, the put will become
worthless at its expiration date. In that case the Fund will have paid the
premium but lost the right to sell the underlying investment. However, the Fund
may sell the put prior to its expiration. That sale may or may not be at a
profit.

      Buying a put on an investment a Fund does not own permits that Fund either
to resell the put or to buy the underlying investment and sell it at the
exercise price. The resale price will vary inversely to the price of the
underlying investment. If the market price of the underlying investment is above
the exercise price and, as a result, the put is not exercised, the put will
become worthless on its expiration date.

      When a Fund purchases a call or put on an index or future, it pays a
premium, but settlement is in cash rather than by delivery of the underlying
investment to that Fund. Gain or loss depends on changes in the index in
question (and thus on price movements in the securities market generally) rather
than on price movements in individual securities or futures contracts.

            |_| Buying and Selling Options on Foreign Currencies. Each Fund
except the OSM - Mercury Advisors S&P 500 Index Fund can buy and sell calls
and puts on foreign currencies. They include puts and calls that trade on a
securities or commodities exchange or in the over-the-counter markets or are
quoted by major recognized dealers in such options. A Fund could use these calls
and puts to try to protect against declines in the dollar value of foreign
securities and increases in the dollar cost of foreign securities a Fund wants
to acquire.

      If the Adviser or Subadviser anticipates a rise in the dollar value of a
foreign currency in which securities to be acquired are denominated, the
increased cost of those securities may be partially offset by purchasing calls
or writing puts on that foreign currency. If the Adviser or Subadviser
anticipates a decline in the dollar value of a foreign currency, the decline in
the dollar value of portfolio securities denominated in that currency might be
partially offset by writing calls or purchasing puts on that foreign currency.
However, the currency rates could fluctuate in a direction adverse to the Fund's
position. The Fund will then have incurred option premium payments and
transaction costs without a corresponding benefit.


      A call a Fund writes on a foreign currency is "covered" if that Fund owns
the underlying foreign currency covered by the call or has an absolute and
immediate right to acquire that foreign currency without additional cash
consideration (or it can do so for additional cash consideration identified on
the books of the Fund) upon conversion or exchange of other foreign currency
held in its portfolio.

      A Fund could write a call on a foreign currency to provide a hedge against
a decline in the U.S. dollar value of a security which it owns or has the right
to acquire and which is denominated in the currency underlying the option. That
decline might be one that occurs due to an expected adverse change in the
exchange rate. This is known as a "cross-hedging" strategy. In those
circumstances, the Fund covers the option by identifying in the books of the
Fund cash, U.S. government securities or other liquid, high grade debt
securities in an amount equal to the exercise price of the option.


      |_| Risks of Hedging with Options and Futures. The use of hedging
instruments requires special skills and knowledge of investment techniques that
are different than what is required for normal portfolio management. If the
Adviser or Subadviser uses a hedging instrument at the wrong time or judges
market conditions incorrectly, hedging strategies may reduce a Fund's return. A
Fund could also experience losses if the prices of its futures and options
positions were not correlated with its other investments.

      A Fund's option activities could affect its portfolio turnover rate and
brokerage commissions. The exercise of calls written by a Fund might cause it to
sell related portfolio securities, thus increasing its turnover rate. The
exercise by a Fund of puts on securities will cause the sale of underlying
investments, increasing portfolio turnover. Although the decision whether to
exercise a put it holds is within a Fund's control, holding a put might cause
the Fund to sell the related investments for reasons that would not exist in the
absence of the put.

      A Fund could pay a brokerage commission each time it buys a call or put,
sells a call, or buys or sells an underlying investment in connection with the
exercise of a call or put. Those commissions could be higher on a relative basis
than the commissions for direct purchases or sales of the underlying
investments. Premiums paid for options are small in relation to the market value
of the underlying investments. Consequently, put and call options offer large
amounts of leverage. The leverage offered by trading in options could result in
a Fund's net asset value being more sensitive to changes in the value of the
underlying investment.

      If a covered call written by a Fund is exercised on an investment that has
increased in value, the Fund will be required to sell the investment at the call
price. It will not be able to realize any profit if the investment has increased
in value above the call price.

      An option position may be closed out only on a market that provides
secondary trading for options of the same series, and there is no assurance that
a liquid secondary market will exist for any particular option. A Fund might
experience losses if it could not close out a position because of an illiquid
market for the future or option.

      There is a risk in using short hedging by selling futures or purchasing
puts on broadly-based indices or futures to attempt to protect against declines
in the value of a Fund's portfolio securities. The risk is that the prices of
the futures or the applicable index will correlate imperfectly with the behavior
of the cash prices of a Fund's securities. For example, it is possible that
while a Fund has used hedging instruments in a short hedge, the market may
advance and the value of the securities held in that Fund's portfolio might
decline. If that occurred, the Fund would lose money on the hedging instruments
and also experience a decline in the value of its portfolio securities. However,
while this could occur for a very brief period or to a very small degree, over
time the value of a diversified portfolio of securities will tend to move in the
same direction as the indices upon which the hedging instruments are based.

      The risk of imperfect correlation increases as the composition of a Fund's
portfolio diverges from the securities included in the applicable index. To
compensate for the imperfect correlation of movements in the price of the
portfolio securities being hedged and movements in the price of the hedging
instruments, a Fund might use hedging instruments in a greater dollar amount
than the dollar amount of portfolio securities being hedged. It might do so if
the historical volatility of the prices of the portfolio securities being hedged
is more than the historical volatility of the applicable index.

      The ordinary spreads between prices in the cash and futures markets are
subject to distortions, due to differences in the nature of those markets.
First, all participants in the futures market are subject to margin deposit and
maintenance requirements. Rather than meeting additional margin deposit
requirements, investors may close futures contracts through offsetting
transactions which could distort the normal relationship between the cash and
futures markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or taking
delivery. To the extent participants decide to make or take delivery, liquidity
in the futures market could be reduced, thus producing distortion. Third, from
the point of view of speculators, the deposit requirements in the futures market
are less onerous than margin requirements in the securities markets. Therefore,
increased participation by speculators in the futures market may cause temporary
price distortions.

      A Fund can use hedging instruments to establish a position in the
securities markets as a temporary substitute for the purchase of individual
securities (long hedging) by buying futures and/or calls on such futures,
broadly-based indices or on securities. It is possible that when a Fund does so
the market might decline. If a Fund then concludes not to invest in securities
because of concerns that the market might decline further or for other reasons,
the Fund will realize a loss on the hedging instruments that is not offset by a
reduction in the price of the securities purchased.

      |_| Forward Contracts. Forward contracts are foreign currency exchange
contracts. They are used to buy or sell foreign currency for future delivery at
a fixed price. A Fund uses them to "lock in" the U.S. dollar price of a security
denominated in a foreign currency that it has bought or sold, or to protect
against possible losses from changes in the relative values of the U.S. dollar
and a foreign currency. Each Fund limits its exposure in foreign currency
exchange contracts in a particular foreign currency to the amount of its assets
denominated in that currency or a closely-correlated currency. Each Fund may
also use "cross-hedging" where it hedges against changes in currencies other
than the currency in which a security it holds is denominated.

      Under a forward contract, one party agrees to purchase, and another party
agrees to sell, a specific currency at a future date. That date may be any fixed
number of days from the date of the contract agreed upon by the parties. The
transaction price is set at the time the contract is entered into. These
contracts are traded in the inter-bank market conducted directly among currency
traders (usually large commercial banks) and their customers.

      A Fund may use forward contracts to protect against uncertainty in the
level of future exchange rates. The use of forward contracts does not eliminate
the risk of fluctuations in the prices of the underlying securities a Fund owns
or intends to acquire, but it does fix a rate of exchange in advance. Although
forward contracts may reduce the risk of loss from a decline in the value of the
hedged currency, at the same time they limit any potential gain if the value of
the hedged currency increases.

      When a Fund enters into a contract for the purchase or sale of a security
denominated in a foreign currency, or when it anticipates receiving dividend
payments in a foreign currency, the Fund might desire to "lock-in" the U.S.
dollar price of the security or the U.S. dollar equivalent of the dividend
payments. To do so, the Fund could enter into a forward contract for the
purchase or sale of the amount of foreign currency involved in the underlying
transaction, in a fixed amount of U.S. dollars per unit of the foreign currency.
This is called a "transaction hedge." The transaction hedge will protect the
Fund against a loss from an adverse change in the currency exchange rates during
the period between the date on which the security is purchased or sold or on
which the payment is declared, and the date on which the payments are made or
received.

      A Fund could also use forward contracts to lock in the U.S. dollar value
of portfolio positions. This is called a "position hedge." When a Fund believes
that foreign currency might suffer a substantial decline against the U.S.
dollar, it could enter into a forward contract to sell an amount of that foreign
currency approximating the value of some or all of the Fund's portfolio
securities denominated in that foreign currency. When a Fund believes that the
U.S. dollar might suffer a substantial decline against a foreign currency, it
could enter into a forward contract to buy that foreign currency for a fixed
dollar amount. Alternatively, a Fund could enter into a forward contract to sell
a different foreign currency for a fixed U.S. dollar amount if the Fund believes
that the U.S. dollar value of the foreign currency to be sold pursuant to its
forward contract will fall whenever there is a decline in the U.S. dollar value
of the currency in which portfolio securities of the Fund are denominated. That
is referred to as a "cross hedge."

      Each Fund will cover its short positions in these cases by identifying to
its Custodian bank assets having a value equal to the aggregate amount of the
Fund's commitment under forward contracts. A Fund will not enter into forward
contracts or maintain a net exposure to such contracts if the consummation of
the contracts would obligate the Fund to deliver an amount of foreign currency
in excess of the value of the Fund's portfolio securities or other assets
denominated in that currency or another currency that is the subject of the
hedge.

      However, to avoid excess transactions and transaction costs, a Fund may
maintain a net exposure to forward contracts in excess of the value of the
Fund's portfolio securities or other assets denominated in foreign currencies if
the excess amount is "covered" by liquid securities denominated in any currency.
The cover must be at least equal at all times to the amount of that excess. As
one alternative, a Fund may purchase a call option permitting the Fund to
purchase the amount of foreign currency being hedged by a forward sale contract
at a price no higher than the forward contract price. As another alternative, a
Fund may purchase a put option permitting the Fund to sell the amount of foreign
currency subject to a forward purchase contract at a price as high or higher
than the forward contact price.

      The precise matching of the amounts under forward contracts and the value
of the securities involved generally will not be possible because the future
value of securities denominated in foreign currencies will change as a
consequence of market movements between the date the forward contract is entered
into and the date it is sold. In some cases the Adviser or Subadviser might
decide to sell the security and deliver foreign currency to settle the original
purchase obligation. If the market value of the security is less than the amount
of foreign currency a Fund is obligated to deliver, the Fund might have to
purchase additional foreign currency on the "spot" (that is, cash) market to
settle the security trade. If the market value of the security instead exceeds
the amount of foreign currency the Fund is obligated to deliver to settle the
trade, the Fund might have to sell on the spot market some of the foreign
currency received upon the sale of the security. There will be additional
transaction costs on the spot market in those cases.

      The projection of short-term currency market movements is extremely
difficult, and the successful execution of a short-term hedging strategy is
highly uncertain. Forward contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing a Fund to sustain losses on
these contracts and to pay additional transactions costs. The use of forward
contracts in this manner might reduce a Fund's performance if there are
unanticipated changes in currency prices to a greater degree than if the Fund
had not entered into such contracts.

      At or before the maturity of a forward contract requiring a Fund to sell a
currency, it might sell a portfolio security and use the sale proceeds to make
delivery of the currency. In the alternative a Fund might retain the security
and offset its contractual obligation to deliver the currency by purchasing a
second contract. Under that contract the Fund will obtain, on the same maturity
date, the same amount of the currency that it is obligated to deliver.
Similarly, a Fund might close out a forward contract requiring it to purchase a
specified currency by entering into a second contract entitling it to sell the
same amount of the same currency on the maturity date of the first contract. A
Fund would realize a gain or loss as a result of entering into such an
offsetting forward contract under either circumstance. The gain or loss will
depend on the extent to which the exchange rate or rates between the currencies
involved moved between the execution dates of the first contract and offsetting
contract.

      The costs to a Fund of engaging in forward contracts varies with factors
such as the currencies involved, the length of the contract period and the
market conditions then prevailing. Because forward contracts are usually entered
into on a principal basis, no brokerage fees or commissions are involved.
Because these contracts are not traded on an exchange, a Fund must evaluate the
credit and performance risk of the counterparty under each forward contract.

      Although a Fund values its assets daily in terms of U.S. dollars, it does
not intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. A Fund may convert foreign currency from time to time, and will
incur costs in doing so. Foreign exchange dealers do not charge a fee for
conversion, but they do seek to realize a profit based on the difference between
the prices at which they buy and sell various currencies. Thus, a dealer might
offer to sell a foreign currency to a Fund at one rate, while offering a lesser
rate of exchange if the Fund desires to resell that currency to the dealer.

           Swap Transactions. Each Fund (other than the OSM - Mercury
Advisors S&P 500 Index Fund) can enter into interest rate swap agreements.
In an interest rate swap, the Fund and another party exchange their right to
receive or their obligation to pay interest on a security. For example, they
might swap the right to receive floating rate payments for fixed rate payments.
A Fund can enter into swaps only on securities that it owns. A Fund will not
enter into swaps with respect to more than 25% of its total assets. Also, a Fund
will segregate liquid assets (such as cash or U.S. government securities) to
cover any amounts it could owe under swaps that exceed the amounts it is
entitled to receive, and it will adjust that amount daily, as needed.

      Swap agreements entail both interest rate risk and credit risk. There is a
risk that, based on movements of interest rates in the future, the payments made
by a Fund under a swap agreement will be greater than the payments it received.
Credit risk arises from the possibility that the counterparty will default. If
the counterparty defaults, the Fund's loss will consist of the net amount of
contractual interest payments that the Fund has not yet received. The Adviser or
Subadviser will monitor the creditworthiness of counterparties to a Fund's
interest rate swap transactions on an ongoing basis.

      Each Fund can enter into swap transactions with certain counterparties
pursuant to master netting agreements. A master netting agreement provides that
all swaps done between a Fund and that counterparty shall be regarded as parts
of an integral agreement. If amounts are payable on a particular date in the
same currency in respect of one or more swap transactions, the amount payable on
that date in that currency shall be the net amount. In addition, the master
netting agreement may provide that if one party defaults generally or on one
swap, the counterparty can terminate all of the swaps with that party. Under
these agreements, if a default results in a loss to one party, the measure of
that party's damages is calculated by reference to the average cost of a
replacement swap for each swap. It is measured by the mark-to-market value at
the time of the termination of each swap. The gains and losses on all swaps are
then netted, and the result is the counterparty's gain or loss on termination.
The termination of all swaps and the netting of gains and losses on termination
is generally referred to as "aggregation."


      The OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Salomon
Brothers All Cap Fund are authorized to enter into equity swap agreements, which
are OTC contracts in which one party agrees to make periodic payments based on
the change in market value of a specified equity security, basket of equity
securities or equity index in return for periodic payments based on a fixed or
variable interest rate or the change in market value of a different equity
security, basket of securities or equity index. Swap agreements may also be used
to obtain exposure to a security or market without owning or taking physical
custody of securities. The Fund will enter into an equity swap transaction only
if, immediately following the time the Fund enters into the transaction, the
aggregate notional principal amount of equity swap transactions to which the
Fund is a party would not exceed 5% of the Fund's net assets.


      |_| Additional Risk Factors of OTC Transactions; Limitations on the Use of
OTC Derivatives. Certain Derivatives traded in OTC markets, including indexed
securities, swaps and OTC options, involve substantial liquidity risk. The
absence of liquidity may make it difficult or impossible for the Fund to sell
such instruments promptly at an acceptable price. The absence of liquidity may
also make it more difficult for the Fund to ascertain a market value for such
instruments. The Fund will therefore acquire illiquid OTC instruments (i) if the
agreement pursuant to which the instrument is purchased contains a formula price
at which the instrument may be terminated or sold, or (ii) for which the Adviser
or Subadviser anticipates the Fund can receive on each business day at least two
independent bids or offers, unless a quotation from only one dealer is
available, in which case that dealer's quotation may be used.

      Because Derivatives traded in OTC markets are not guaranteed by an
exchange or clearing corporation and generally do not require payment of margin,
to the extent that the Fund has unrealized gains in such instruments or has
deposited collateral with its counterparty, the Fund is at risk that its
counterparty will become bankrupt or otherwise fail to honor its obligations.
The Fund will attempt to minimize the risk that a counterparty will become
bankrupt or otherwise fail to honor its obligations by engaging in transactions
in derivatives traded in OTC markets only with financial institutions which have
substantial capital or which have provided the Fund with a third party guaranty
or other credit enhancement.

      |_| Regulatory Aspects of Hedging Instruments. When using futures and
options on futures, a Fund is required to operate within certain guidelines and
restrictions with respect to the use of futures as established by the
Commodities Futures Trading Commission (the "CFTC"). In particular, a Fund is
exempted from registration with the CFTC as a "commodity pool operator" if it
complies with the requirements of Rule 4.5 adopted by the CFTC. The Rule does
not limit the percentage of a Fund's assets that may be used for futures margin
and related options premiums for a bona fide hedging position. However, under
the Rule, a Fund must limit its aggregate initial futures margin and related
options premiums to not more than 5% of its net assets for hedging strategies
that are not considered bona fide hedging strategies under the Rule. Under the
Rule, a Fund must also use short futures and options on futures solely for bona
fide hedging purposes within the meaning and intent of the applicable provisions
of the Commodity Exchange Act.

      Transactions in options by a Fund are subject to limitations established
by the option exchanges. The exchanges limit the maximum number of options that
may be written or held by a single investor or group of investors acting in
concert. Those limits apply regardless of whether the options were written or
purchased on the same or different exchanges or are held in one or more accounts
or through one or more different exchanges or through one or more brokers. Thus,
the number of options that a Fund may write or hold may be affected by options
written or held by other entities, including other investment companies having
the same adviser as a Fund (or an adviser that is an affiliate of a Fund's
adviser). The exchanges also impose position limits on futures transactions. An
exchange may order the liquidation of positions found to be in violation of
those limits and may impose certain other sanctions.

      Under the Investment Company Act, when a Fund purchases a future, it must
maintain cash or readily marketable short-term debt instruments in an amount
equal to the market value of the securities underlying the future, less the
margin deposit applicable to it.

      |_| Tax Aspects of Certain Hedging Instruments. Certain foreign currency
exchange contracts in which a Fund may invest are treated as "Section 1256
contracts" under the Internal Revenue Code. In general, gains or losses relating
to Section 1256 contracts are characterized as 60% long-term and 40% short-term
capital gains or losses under the Code. However, foreign currency gains or
losses arising from Section 1256 contracts that are forward contracts generally
are treated as ordinary income or loss. In addition, Section 1256 contracts held
by a Fund at the end of each taxable year are "marked-to-market," and unrealized
gains or losses are treated as though they were realized. These contracts also
may be marked-to-market for purposes of determining the excise tax applicable to
investment company distributions and for other purposes under rules prescribed
pursuant to the Internal Revenue Code. An election can be made by a Fund to
exempt those transactions from this marked-to-market treatment.

      Certain forward contracts a Fund enters into may result in "straddles" for
federal income tax purposes. The straddle rules may affect the character and
timing of gains (or losses) recognized by a Fund on straddle positions.
Generally, a loss sustained on the disposition of a position making up a
straddle is allowed only to the extent that the loss exceeds any unrecognized
gain in the offsetting positions making up the straddle. Disallowed loss is
generally allowed at the point where there is no unrecognized gain in the
offsetting positions making up the straddle, or the offsetting position is
disposed of.

      Under the Internal Revenue Code, the following gains or losses are treated
as ordinary income or loss: (1) gains or losses attributable to fluctuations in
exchange rates that
         occur between the time the Fund accrues interest or other receivables
         or accrues expenses or other liabilities denominated in a foreign
         currency and the time the Fund actually collects such receivables or
         pays such liabilities, and
(2)      gains or losses attributable to fluctuations in the value of a foreign
         currency between the date of acquisition of a debt security denominated
         in a foreign currency or foreign currency forward contracts and the
         date of disposition.

      Currency gains and losses are offset against market gains and losses on
each trade before determining a net "Section 988" gain or loss under the
Internal Revenue Code for that trade, which may increase or decrease the amount
of a Fund's investment income available for distribution to its shareholders.


      |X| Temporary Defensive and Interim Investments. When market conditions
are unstable, or the Adviser or Subadviser believes it is otherwise appropriate
to reduce holdings in stocks, a Fund (except for the OSM - Mercury Advisors S&P
500 Index Fund) can invest in a variety of debt securities for defensive
purposes. A Fund can also purchase these securities for liquidity purposes to
meet cash needs due to the redemption of Fund shares, or to hold while waiting
to reinvest cash received from the sale of other portfolio securities. A Fund
can buy:

      |_|   high-quality, short-term money market instruments, including
         those issued by the U. S. Treasury or other government agencies,
|_|   commercial paper (short-term, unsecured, promissory notes of domestic
         or foreign companies),
|_|   short-term debt obligations of corporate issuers,
      |_|   certificates of deposit and bankers' acceptances of domestic and
         foreign banks and savings and loan associations, and
      |_|   repurchase agreements and purchase and sale agreements.

      Short-term debt securities would normally be selected for defensive or
cash management purposes because they can normally be disposed of quickly, are
not generally subject to significant fluctuations in principal value and their
value will be less subject to interest rate risk than longer-term debt
securities.

Investment Restrictions

      |X| What Are "Fundamental Policies?" Fundamental policies are those
policies that each Fund has adopted to govern its investments that can be
changed only by the vote of a "majority" of the Fund's outstanding voting
securities. Under the Investment Company Act, a "majority" vote is defined as
the vote of the holders of the lesser of:
      |_|67% or more of the shares present or represented by proxy at a
         shareholder meeting, if the holders of more than 50% of the outstanding
         shares are present or represented by proxy, or
      |_| more than 50% of the outstanding shares.


      The investment objectives of the OSM - Mercury Advisors Focus Growth Fund,
OSM - Jennison Growth Fund, OSM - QM Active Balanced Fund and the OSM - Salomon
Brothers All Cap Fund are fundamental policies. The investment objectives of the
OSM - Mercury Advisors S&P 500 Index Fund and the OSM - Gartmore Millennium
Growth Fund II are non-fundamental policies. Other policies described in the
Prospectus or this Statement of Additional Information are "fundamental" only if
they are identified as such. The Funds' Board of Trustees can change
non-fundamental policies without shareholder approval. The Board of Trustees of
the Master Funds in which the OSM - Mercury Advisors S&P 500 Index Fund and
the OSM - Mercury Advisors Focus Growth Fund invest can change non-fundamental
policies of the respective Master Fund without shareholder approval. However,
significant changes to investment policies will be described in supplements or
updates to the Prospectus or this Statement of Additional Information, as
appropriate. Each Fund's most significant investment policies are described in
the Prospectus.


      |X| Do the Funds Have Additional Fundamental Policies?

      OSM - Mercury Advisors S&P 500 Index Fund - The following investment
restrictions are fundamental policies of OSM - Mercury Advisors S&P 500 Index
Fund. Provided that none of the following restrictions shall prevent the Fund
from investing all of its assets in shares of another registered investment
company with the same investment objective (in a master/feeder structure), the
Fund may not:

1.       Make any investment inconsistent with the Fund's classification as a
         non-diversified company under the Investment Company Act.


2.    Invest more than 25% of its total assets, taken at market value, in the
         securities of issuers in any particular industry (excluding the U.S.
         Government and its agencies and instrumentalities); provided, that
         in replicating the weighting of a particular industry in its target
         index, the Fund may invest more than 25% of its total assets in
         securities of issuers in that industry when the assets of companies
         included in the target index that are in the industry represent more
         than 25% of the total assets of all companies included in the index.


3.       Make investments for the purpose of exercising control or management.

4.       Purchase or sell real estate, except that, to the extent permitted by
         law, the Fund may invest in securities directly or indirectly secured
         by real estate or interests therein or issued by companies which invest
         in real estate or interests therein.

5.    Make loans to other persons, except that the acquisition of bonds,
         debentures or other corporate debt securities and investment in
         government obligations, commercial paper, pass-through instruments,
         certificates of deposit, bankers' acceptances, repurchase agreements
         or any similar instruments shall not be deemed to be the making of a
         loan, and except further that the Fund may lend its portfolio
         securities, provided that the lending of portfolio securities may be
         made only in accordance with applicable law and the guidelines set
         forth in the Fund's Registration Statement, as it may be amended
         from time to time.

6.       Issue senior securities to the extent such issuance would violate
         applicable law.

7.    Borrow money, except that (i) the Fund may borrow from banks (as
         defined in the Investment Company Act) in amounts up to 33 1/3% of
         its total assets (including the amount borrowed), (ii) the Fund may
         borrow up to an additional 5% of its total assets for temporary
         purposes, (iii) the Fund may obtain such short term credit as may be
         necessary for the clearance of purchases and sales of portfolio
         securities, and (iv) the Fund may purchase securities on margin to
         the extent permitted by applicable law. The Fund may not pledge its
         assets other than to secure such borrowings or, to the extent
         permitted by the Fund's investment policies as set forth in its
         Registration Statement, as it may be amended from time to time, in
         connection with hedging transactions, short sales, when issued and
         forward commitment transactions and similar investment strategies.

8.       Underwrite securities of other issuers except insofar as the Fund
         technically may be deemed an underwriter under the Securities Act in
         selling portfolio securities.

9.       Purchase or sell commodities or contracts on commodities, except to the
         extent that the Fund may do so in accordance with applicable law and
         the Fund's registration statement, as it may be amended from time to
         time, and without registering as a commodity pool operator under the
         Commodity Exchange Act.


      With respect to the Fund's fundamental restriction on purchasing
securities on margin, the Fund is currently prohibited by law from purchasing
securities on margin and will not do so unless current law changes. In addition,
although the Fund is classified as a non-diversified fund under the Investment
Company Act and is not subject to the diversification requirements of the
Investment Company Act, the Fund is required to comply with certain requirements
under the Internal Revenue Code of 1986, as amended (the "Code"). These
requirements include limiting its investments so that at the close of each
quarter of the taxable year (i) not more than 25% of the market value of the
Fund's total assets are invested in the securities of a single issuer, or any
two (2) or more issuers which are controlled by the Fund and engaged in the
same, similar or related businesses, and (ii) with respect to 50% of the market
value of its total assets, not more than 5% of the market value of its total
assets are invested in securities of a single issuer, and the Fund does not own
more than 10% of the outstanding voting securities of a single issuer. The U.S.
Government, its agencies and instrumentalities and other regulated investment
companies are not included within the definition of "issuer" for purposes of the
diversification requirements of the Code.


      The applicable Master Fund has adopted investment restrictions
substantially identical to the foregoing, which are fundamental policies of the
Master Fund and may not be changed without the approval of the holders of a
majority of the interests of the Master Fund.

      In addition, the Fund has adopted non-fundamental restrictions that may be
changed by the Trustees without shareholder approval. Like the fundamental
restrictions, none of the non-fundamental restrictions, including but not
limited to restriction (a) below, shall prevent the Fund from investing all of
its assets in shares of another registered investment company with the same
investment objective (in a master/feeder structure). Under the non-fundamental
investment restrictions, the Fund may not:

(a)       Change its investment policy to invest at least 80% of its net assets
          (plus borrowings for investment purposes) in securities or other
          financial instruments in, or correlated with, its target index without
          providing shareholders with at least 60 days notice.

(b)   Purchase securities of other investment companies, except to the extent
          such purchases are permitted by applicable law. As a matter of
          policy, however, the Fund will not purchase shares of any
          registered open-end investment company or registered unit
          investment trust, in reliance on Section 12(d)(1)(F) or (G) (the
          "fund of funds" provisions) of the Investment Company Act, at any
          time the Fund's shares are owned by another investment company that
          is part of the same group of investment companies as the Fund.

(c)   Invest in securities that cannot be readily resold because of legal or
          contractual restrictions or that cannot otherwise be marketed,
          redeemed or put to the issuer or a third party because of a lack of
          an active trading market, if at the time of acquisition more than
          15% of its net assets would be invested in such securities. This
          restriction shall not apply to securities that mature within seven
          (7) days or securities that the Trustees have otherwise determined
          to be liquid pursuant to applicable law. Securities purchased in
          accordance with Rule 144A under the Securities Act (which are
          restricted securities that can be resold to qualified institutional
          buyers, but not to the general public) and determined to be liquid
          by the Trustees are not subject to the limitations set forth in
          this investment restriction.

(d)       Make any additional investments if the amount of its borrowings
          exceeds 5% of its total assets. Borrowings do not include the use of
          investment techniques that may be deemed to create leverage,
          including, but not limited to, such techniques as dollar rolls,
          when-issued securities, options and futures.

      In addition to the non-fundamental investment restrictions listed above
notwithstanding fundamental restriction 9 listed above, as a non-fundamental
investment restriction the Fund will not change fundamental restriction 9
without first obtaining shareholder approval. If a percentage restriction on the
investment or use of assets set forth above is adhered to at the time a
transaction is effected, later changes in percentages resulting from changing
values will not be considered a violation (except for the Fund's policies on
borrowing and illiquid securities).


      The Master Fund has adopted non-fundamental investment restrictions
substantially identical to the foregoing, which may be changed by the Trustees
of the Master Fund without shareholder approval.


      The staff of the Commission has taken the position that purchased OTC
options and the assets used as cover for written OTC options are illiquid
securities. Therefore, the Fund and Master Fund have adopted an investment
policy pursuant to which neither the Fund nor the Master Fund will purchase or
sell OTC options (including OTC options on futures contracts) if, as a result of
such transaction, the sum of the market value of OTC options currently
outstanding which are held by the Fund or the Master Fund, the market value of
the underlying securities covered by OTC call options currently outstanding
which were sold by the Fund or the Master Fund and margin deposits on the Fund's
or the Master Fund's existing OTC options on futures contracts exceeds 15% of
the net assets of the Fund or the Master Fund taken at market value, together
with all other assets of such Fund or the Master Fund which are illiquid or are
not otherwise readily marketable. However, if the OTC option is sold by the Fund
or the Master Fund to a primary U.S. Government securities dealer recognized by
the Federal Reserve Bank of New York and if the Fund or the Master Fund has the
unconditional contractual right to repurchase such OTC option from the dealer at
a predetermined price, then the Fund or the Master Fund will treat as illiquid
such amount of the underlying securities as is equal to the repurchase price
less the amount by which the option is "in-the-money" (i.e., current market
value of the underlying securities minus the option's strike price). The
repurchase price with the primary dealers is typically a formula price which is
generally based on a multiple of the premium received for the option, plus the
amount by which the option is "in-the-money." This policy as to OTC options is
not a fundamental policy of the Fund or the Master Fund and may be amended by
the Trustees or the Directors without the approval of the shareholders. However,
the Trustees will not change or modify this policy prior to the change or
modification by the Commission staff of its position.

      Rule 10f-3 under the Investment Company Act sets forth the conditions
under which the Master Fund may purchase from an underwriting syndicate in which
Merrill Lynch is a member. Otherwise, the Fund and the Master Fund are
prohibited from engaging in portfolio transactions with Merrill Lynch or its
affiliates acting as principal without an exemptive order. See "Portfolio
Transactions and Brokerage."

      OSM - Mercury Advisors Focus Growth Fund - The following investment
restrictions are fundamental policies of OSM - Mercury Advisors Focus Growth
Fund. Unless otherwise provided, all references to the Fund's assets below are
in terms of current market value. Provided that none of the following
restrictions shall prevent the Fund from investing all of its assets in shares
of another registered investment company with the same investment objective (in
a master/feeder structure), the Fund may not:

1.       Invest more than 25% of its total assets, taken at market value at the
         time of each investment, in the securities of issuers in any particular
         industry (excluding the U.S. Government and its agencies and
         instrumentalities).

2.       Make investments for the purpose of exercising control or management.
         Investments by the Fund in wholly-owned investment entities created
         under the laws of certain countries will not be deemed the making of
         investments for the purpose of exercising control or management.

3.       Purchase or sell real estate, except that, to the extent permitted by
         applicable law, the Fund may invest in securities directly or
         indirectly secured by real estate or interests therein or issued by
         companies that invest in real estate or interests therein.

4.    Make loans to other persons, except that the acquisition of bonds,
         debentures or other corporate debt securities and investment in
         governmental obligations, commercial paper, pass-through
         instruments, certificates of deposit, bankers' acceptances,
         repurchase agreements, purchase and sale contracts or any similar
         instruments shall not be deemed to be the making of a loan, and
         except further that the Fund may lend its portfolio securities,
         provided that the lending of portfolio securities may be made only
         in accordance with applicable law and the guidelines set forth in
         the Fund's Prospectus and Statement of Additional Information, as
         they may be amended from time to time.

5.       Issue senior securities to the extent such issuance would violate
         applicable law.

6.    Borrow money, except that (i) the Fund may borrow from banks (as
         defined in the Investment Company Act) in amounts up to 33 1/3% of
         its total assets (including the amount borrowed), (ii) the Fund may
         borrow up to an additional 5% of its total assets for temporary
         purposes, (iii) the Fund may obtain such short-term credit as may be
         necessary for the clearance of purchases and sales of portfolio
         securities and (iv) the Fund may purchase securities on margin to
         the extent permitted by applicable law. The Fund may not pledge its
         assets other than to secure such borrowings or, to the extent
         permitted by the Fund's investment policies as set forth in its
         Prospectus and Statement of Additional Information, as they may be
         amended from time to time, in connection with hedging transactions,
         short sales, when-issued and forward commitment transactions and
         similar investment strategies.

7.       Underwrite securities of other issuers except insofar as the Fund
         technically may be deemed an underwriter under the Securities Act of
         1933 in selling portfolio securities.

8.       Purchase or sell commodities or contracts on commodities, except to the
         extent that the Fund may do so in accordance with applicable law and
         the Fund's Prospectus and Statement of Additional Information, as they
         may be amended from time to time, and without registering as a
         commodity pool operator under the Commodity Exchange Act.

      The applicable Master Fund in which the Fund invests has adopted
investment restrictions substantially identical to the foregoing, which are
fundamental policies of the Master Fund and may not be changed with respect to
the Master Fund without the approval of the holders of a majority of the
interests of the Master Fund.

      In addition, the Fund has adopted non-fundamental restrictions that may be
changed by the Board of Trustees of the Fund without shareholder approval. Like
the fundamental restrictions, none of the non-fundamental restrictions,
including but not limited to restriction (1) below, shall prevent the Fund from
investing all of its assets in shares of another registered investment company
with the same investment objective (in a master/feeder structure). The
applicable Master Fund has adopted investment restrictions substantially
identical to the following, which are non-fundamental policies of the Master
Fund and may be changed by the Trustees of the Master Fund without shareholder
approval. Under the non-fundamental investment restrictions, the Fund may not:

1.    Purchase securities of other investment companies, except to the extent
         such purchases are permitted by applicable law. As a matter of
         policy, however, the Fund will not purchase shares of any registered
         open-end investment company or registered unit investment trust, in
         reliance on Section 12(d)(1)(F) or (G) (the "fund of funds"
         provisions) of the Investment Company Act, at any time its shares
         are owned by another investment company that is part of the same
         group of investment companies as the Fund.

2.       Make short sales of securities or maintain a short position, except to
         the extent permitted by applicable law.

3.    Invest in securities that cannot be readily resold because of legal or
         contractual restrictions or that cannot otherwise be marketed,
         redeemed or put to the issuer or a third party, if at the time of
         acquisition more than 15% of its net assets would be invested in
         such securities. This restriction shall not apply to securities that
         mature within seven (7) days or securities that the Trustees of the
         Fund have otherwise determined to be liquid pursuant to applicable
         law. Securities purchased in accordance with Rule 144A under the
         Securities Act (which are restricted securities that can be resold
         to qualified institutional buyers, but not to the general public)
         and determined to be liquid by the Board of Trustees of the Fund are
         not subject to the limitations set forth in this investment
         restriction.

4.    Notwithstanding fundamental investment restriction (6) above, borrow
         money or pledge its assets, except that the Fund (a) may borrow from
         a bank as a temporary measure for extraordinary or emergency
         purposes or to meet redemption in amounts not exceeding 33 1/3%
         (taken at market value) of its total assets and pledge its assets to
         secure such borrowing, (b) may obtain such short-term credit as may
         be necessary for the clearance of purchases and sales of portfolio
         securities and (c) may purchase securities on margin to the extent
         permitted by applicable law. However, at the present time,
         applicable law prohibits the Fund from purchasing securities on
         margin. The deposit or payment by the Fund of initial or variation
         margin in connection with financial futures contracts or options
         transactions is not considered to be the purchase of a security on
         margin. The purchase of securities while a borrowing is outstanding
         will have the effect of leveraging the Fund. Such leveraging or
         borrowing increases the Fund's exposure to capital risk and borrowed
         funds are subject to interest costs which will reduce net income.
         The Fund will not purchase securities while borrowing exceeds 5% of
         its total assets.

      The staff of the Commission has taken the position that purchased OTC
options and the assets used as cover for written OTC options are illiquid
securities. Therefore, the Fund and the Master Fund have adopted an investment
policy pursuant to which neither the Fund nor the Master Fund will purchase or
sell OTC options (including OTC options on futures contracts) if, as a result of
such transaction, the sum of the market value of OTC options currently
outstanding that are held by the Fund or the Master Fund, the market value of
the underlying securities covered by OTC call options currently outstanding that
were sold by the Fund or the Master Fund and margin deposits on the Fund's or
the Master Fund's existing OTC options on financial futures contracts exceeds
15% of the net assets of the Fund or the Master Fund, taken at market value,
together with all other assets of the Fund or the Master Fund that are illiquid
or are not otherwise readily marketable. However, if the OTC option is sold by
the Fund or the Master Fund to a primary U.S. Government securities dealer
recognized by the Federal Reserve Bank of New York and if the Fund or the Master
Fund has the unconditional contractual right to repurchase such OTC option from
the dealer at a predetermined price, then the Fund or the Master Fund will treat
as illiquid such amount of the underlying securities as is equal to the
repurchase price less the amount by which the option is "in-the-money" (i.e.,
current market value of the underlying securities minus the option's strike
price). The repurchase price with the primary dealers is typically a formula
price that is generally based on a multiple of the premium received for the
option, plus the amount by which the option is "in-the-money." This policy as to
OTC options is not a fundamental policy of the Fund or the Master Fund and may
be amended by the Board of Trustees of the Fund or the Board of Trustees of the
Master Fund without the approval of the Fund's shareholders. However, the
Trustees will not change or modify this policy prior to the change or
modification by the Commission staff of its position.

      In addition, as a non-fundamental policy that may be changed by the Board
of Trustees and to the extent required by the Commission or its staff, the Fund
will, for purposes of fundamental investment restrictions (1) and (2), treat
securities issued or guaranteed by the government of any one foreign country as
the obligations of a single issuer.

      As another non-fundamental policy, the Fund will not invest in securities
that are (a) subject to material legal restrictions on repatriation of assets or
(b) cannot be readily resold because of legal or contractual restrictions or
which are not otherwise readily marketable, including repurchase agreements and
purchase and sales contracts maturing in more than seven (7) days, if, regarding
all such securities, more than 15% of its net assets, taken at market value
would be invested in such securities.

      Because of the affiliation of Merrill Lynch with Mercury Advisors, the
Master Fund is prohibited from engaging in certain transactions involving
Merrill Lynch or its affiliates except for brokerage transactions permitted
under the Investment Company Act involving only usual and customary commissions
or transactions pursuant to an exemptive order under the Investment Company Act.
See "Portfolio Transactions and Brokerage." Without such an exemptive order the
Master Fund would be prohibited from engaging in portfolio transactions with
Merrill Lynch or any of its affiliates acting as principal. Rule 10f-3 under the
Investment Company Act sets forth the conditions under which the Master Fund may
purchase from an underwriting syndicate in which Merrill Lynch is a member.


      OSM - QM Active Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon
Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund II - The
following investment restrictions are fundamental policies of the OSM - QM
Active Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon Brothers All Cap
Fund and the OSM - Gartmore Millennium Growth Fund II.

      |_|The Fund cannot buy securities issued or guaranteed by any one issuer
         if more than 5% of its total assets would be invested in securities of
         that issuer or if it would then own more than 10% of that issuer's
         voting securities. That restriction applies to 75% of the Fund's total
         assets (50% of the OSM - Salomon Brothers All Cap Fund's total assets).
         The limit does not apply to securities issued by the U.S. Government or
         any of its agencies or instrumentalities or securities of other
         investment companies.

      |_|The Fund cannot invest in physical commodities or physical commodity
         contracts. However, the Fund can buy and sell hedging instruments to
         the extent specified in its Prospectus and this Statement of Additional
         Information from time to time. The Fund can also buy and sell options,
         futures, securities or other instruments backed by, or the investment
         return from which, is linked to changes in the price of, physical
         commodities.
|_|      The Fund cannot make loans except (a) through lending of securities,
         (b) through the purchase of debt instruments, loan participations or
         similar evidences of indebtedness, (c) through an inter-fund lending
         program with other affiliated funds, and (d) through repurchase
         agreements.
|_|      The Fund cannot borrow money in excess of 33 1/3% of the value of its
         total assets. The Fund may borrow only from banks and/or affiliated
         investment companies. With respect to this fundamental policy, the Fund
         can borrow only if it maintains a 300% ratio of assets to borrowings at
         all times in the manner set forth in the Investment Company Act.
|_|      The Fund cannot concentrate investments. That means it cannot invest
         25% or more of its total assets in companies in any one industry.
      |_|The Fund cannot underwrite securities of other companies. A permitted
         exception is in case it is deemed to be an underwriter under the
         Securities Act of 1933 when reselling any securities held in its own
         portfolio.
|_|      The Fund cannot invest in real estate or in interests in real estate.
         However, the Fund can purchase readily-marketable securities of
         companies holding real estate or interests in real estate.
|_|      The Fund cannot issue "senior securities." However, that restriction
         does not prohibit the Fund from borrowing money subject to the
         provisions set forth in this Statement of Additional Information, or
         from entering into margin, collateral or escrow arrangements permitted
         by its other investment policies.

      |X| Do the Funds Have Any Restrictions That Are Not Fundamental? Each Fund
has a number of other investment restrictions that are not fundamental policies,
which means that they can be changed by vote of a majority of a Fund's Board of
Trustees without shareholder approval.

|_|      A Fund cannot invest in companies for the purpose of acquiring control
         or management of them.
|_|      A Fund cannot pledge, mortgage or hypothecate any of its assets.
         However, this does not prohibit the escrow arrangements contemplated by
         writing covered call options or other collateral or margin arrangements
         in connection with any of the hedging instruments permitted by any of
         its other investment policies.

      Unless the Prospectus or this Statement of Additional Information states
that a percentage restriction applies on an ongoing basis, it applies only at
the time the Fund makes an investment. A Fund need not sell securities to meet
the percentage limits if the value of the investment increases in proportion to
the size of the Fund.

      For purposes of a Fund's policy not to concentrate its investments as
described above, a Fund has adopted the industry classifications set forth in
Appendix B to this Statement of Additional Information. That is not a
fundamental policy.

How the Funds are Managed

Organization and History. Oppenheimer Select Managers (the "Trust") is an
open-end management investment company with an unlimited number of authorized
shares of beneficial interest. The Trust was organized as a Massachusetts
business trust on November 10, 2000.

      Classes of Shares. The Trustees are authorized, without shareholder
approval, to create new series and classes of shares. The Trustees may
reclassify unissued shares of a Fund into additional series or classes of
shares. The Trustees also may divide or combine the shares of a class into a
greater or lesser number of shares without changing the proportionate beneficial
interest of a shareholder in the Fund. Shares do not have cumulative voting
rights or preemptive or subscription rights. Shares may be voted in person or by
proxy at shareholder meetings.

      Each Fund currently has five classes of shares: Class A, Class B, Class C,
Class N and Class Y. All classes invest in the same investment portfolio. Only
retirement plans may purchase Class N shares. Only certain institutional
investors may elect to purchase Class Y shares. Each class of shares: o has its
own dividends and distributions, o pays certain expenses which may be different
for the different classes, o may have a different net asset value, o may have
separate voting rights on matters in which interests of one
         class are different from interests of another class, and o votes as a
class on matters that affect that class alone.

      Shares are freely transferable, and each share of each class has one vote
at shareholder meetings, with fractional shares voting proportionally on matters
submitted to the vote of shareholders. Each share of a Fund represents an
interest in the Fund proportionately equal to the interest of each other share
of the same class.

      Meetings of Shareholders. As a Massachusetts business trust, the Trust is
not required to hold, and does not plan to hold, regular annual meetings of
shareholders. The Trust will hold meetings when required to do so by the
Investment Company Act or other applicable law. It will also do so when a
shareholder meeting is called by the Trustees or upon proper request of the
shareholders.

      Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Trust, to remove a Trustee. The
Trustees will call a meeting of shareholders to vote on the removal of a Trustee
upon the written request of the record holders of 10% of its outstanding shares.
If the Trustees receive a request from at least 10 shareholders stating that
they wish to communicate with other shareholders to request a meeting to remove
a Trustee, the Trustees will then either make the Trust's shareholder list
available to the applicants or mail their communication to all other
shareholders at the applicants' expense. The shareholders making the request
must have been shareholders for at least six months and must hold shares of a
Fund valued at $25,000 or more or constituting at least 1% of a Fund's
outstanding shares. The Trustees may also take other action as permitted by the
Investment Company Act.


      Shareholder and Trustee Liability. The Trust's Declaration of Trust
contains an express disclaimer of shareholder or Trustee liability for the
Trust's obligations. It also provides for indemnification and reimbursement of
expenses out of the Trust's property for any shareholder held personally liable
for its obligations. The Declaration of Trust also states that upon request, the
Trust shall assume the defense of any claim made against a shareholder for any
act or obligation of a Fund and shall satisfy any judgment on that claim.
Massachusetts law permits a shareholder of a business trust (such as the Trust)
to be held personally liable as a "partner" under certain circumstances.
However, the risk that a Fund shareholder will incur financial loss from being
held liable as a "partner" of the Trust is limited to the relatively remote
circumstances in which the Trust would be unable to meet its obligations.

      The Trust's contractual arrangements state that any person doing business
with the Trust and each Fund (and each shareholder of a Fund) agrees under its
Declaration of Trust to look solely to the assets of each series for
satisfaction of any claim or demand that may arise out of any dealings with that
series. Additionally, the Trustees shall have no personal liability to any such
person, to the extent permitted by law.

Board of Trustees and Oversight Committees. The Trust and each series of the
Trust is governed by a Board of Trustees, which is responsible for protecting
the interests of shareholders under Massachusetts law. The Trustees meet
periodically throughout the year to oversee each Fund's activities, review its
performance, and review the actions of the Adviser and Subadvisers. Although the
Trust will not normally hold annual meetings of its shareholders, it may hold
shareholder meetings from time to time on important matters, and shareholders
have certain rights to call a meeting to remove a Trustee or to take other
action as described in the Trust's Declaration of Trust.

      The Board of Trustees has an Audit Committee and a Review Committee. The
Audit Committee is comprised solely of Independent Trustees. The members of the
Audit Committee are Edward L. Cameron (Chairman), William L. Armstrong, George
C. Bowen and Robert J. Malone. The Audit Committee held 7 meetings during the
fiscal years ended November 30, 2002 and December 3, 2002. The Audit Committee
furnishes the Board with recommendations regarding the selection of the Trust's
independent auditors. Other main functions of the Audit Committee include, but
are not limited to: (i) reviewing the scope and results of audits and the audit
fees charged; (ii) reviewing reports from the Trust's independent auditors
regarding the Fund's internal accounting procedures and controls; and (iii)
establishing a separate line of communication between the Trust's independent
auditors and its independent Trustees.

      The Audit Committee's functions include selecting and nominating, to the
full Board, nominees for election as Trustees, and selecting and nominating
Independent Trustees for election. The Audit Committee may, but need not,
consider the advice and recommendation of the Manager and its affiliates in
selecting nominees. The full Board elects new trustees except for those
instances when a shareholder vote is required.

      To date, the Committee has been able to identify from its own resources an
ample number of qualified candidates. Nonetheless, shareholders may submit names
of individuals, accompanied by complete and properly supported resumes, for the
Audit Committee's consideration by mailing such information to the Committee in
care of the Trust. The Committee may consider such persons at such time as it
meets to consider possible nominees. The Committee, however, reserves sole
discretion to determine the candidates to present to the Board and/or
shareholders when it meets for the purpose considering potential nominees.

      The members of the Review Committee are Jon S. Fossel (Chairman), Robert
G. Avis, Sam Freedman, Beverly Hamilton and F. William Marshall, Jr. The Review
Committee held 7 meetings during the fiscal years ended November 30, 2002 and
December 31, 2002. Among other functions, the Review Committee reviews reports
and makes recommendations to the Board concerning the fees paid to the Trust's
transfer agent and the services provided to each Fund by the transfer agent. The
Review Committee also reviews each Fund's investment performance and policies
and procedures adopted by the Trust to comply with Investment Company Act and
other applicable law.

Trustees and Officers of the Trust. Except for Mr. Murphy, each of the Trustees
is an "Independent Trustee," as defined in the Investment Company Act. Mr.
Murphy is an "Interested Trustee," because he is affiliated with the Manager by
virtue of his positions as an officer and director of the Manager, and as a
shareholder of its parent company. Mr. Murphy was elected as a Trustee of the
Trust with the understanding that in the event he ceases to be the chief
executive officer of the Manager, he will resign as a trustee of the Trust and
the other Board II Funds (defined below) for which he is a trustee or director.

      The Trust's Trustees and officers and their positions held with the Trust
and length of service in such position(s) and their principal occupations and
business affiliations during the past five years are listed in the chart below.
The information for the Trustees also includes the dollar range of shares of the
Funds as well as the aggregate dollar range of shares beneficially owned in any
of the Oppenheimer funds overseen by the Trustees. All of the Trustees are also
trustees or directors of the following Oppenheimer funds (except for Ms.
Hamilton and Mr. Malone, who are not Trustees of Oppenheimer Senior Floating
Rate Fund and Mr. Murphy is not a Trustee or Managing General Partner of any of
the Centennial trusts) (referred to as "Board II Funds"):

Oppenheimer Cash Reserves                 Oppenheimer Select Managers



Oppenheimer Champion Income Fund          Oppenheimer Senior Floating Rate Fund
Oppenheimer Capital Income Fund          Oppenheimer Strategic Income Fund
Oppenheimer High Yield Fund              Oppenheimer Total Return Fund, Inc.
Oppenheimer International Bond Fund      Oppenheimer Variable Account Funds
Oppenheimer Integrity Funds              Panorama Series Fund, Inc.
Oppenheimer Limited-Term Government Fund Centennial America Fund, L. P.
Oppenheimer Main Street Funds, Inc.      Centennial California Tax Exempt Trust
Oppenheimer   Main  Street   Opportunity
Fund                                     Centennial Government Trust
Oppenheimer Main Street Small Cap Fund   Centennial Money Market Trust
Oppenheimer Municipal Fund               Centennial New York Tax Exempt Trust
Oppenheimer Real Asset Fund              Centennial Tax Exempt Trust

      Present or former officers, directors, trustees and employees (and their
immediate family members) of the Trust, the Manager and its affiliates, and
retirement plans established by them for their employees are permitted to
purchase Class A shares of the Funds and the other Oppenheimer funds at net
asset value without sales charge. The sales charges on Class A shares is waived
for that group because of the economies of sales efforts realized by the
Distributor.

      Messrs. Murphy, Masterson, Molleur, Vottiero, Wixted and Zack, and Mses.
Bechtolt, Feld and Ives who are officers of the Trust, respectively hold the
same offices with one or more of the other Board II Funds as with the Trust. As
of March 11 2003, the Trustees and officers of the Trust, as a group, owned of
record or beneficially less than 1% of each class of shares of any Fund. The
foregoing statement does not reflect ownership of shares held of record by an
employee benefit plan for employees of the Manager, other than the shares
beneficially owned under that plan by the officers of the Trust listed above. In
addition, each Independent Trustee, and his family members, do not own
securities of either the Manager or Distributor of the Board II Funds or any
person directly or indirectly controlling, controlled by or under common control
with the Manager or Distributor.

      Trustees and Officers of the Merrill Lynch Maser Funds. For information
about the Trustees and Officers of the Quantitative Master Series Trust (the
Master Fund in which the OSM - Mercury Advisors S&P 500 Index Fund invests
all of its assets) you should refer to the Registration Statement of the
Quantitative Master Series Trust (Investment Company Act File No. 811-7885). For
information about the Trustees and Officers of the Master Focus Twenty Trust
(the Master Fund in which the OSM - Mercury Advisors Focus Growth Fund invests
all of its assets) you should refer to the Registration Statement of the Mast
Focus Twenty Trust (Investment Company Act File No. 811-08735). You can review
each Trust's Registration Statement at the SEC's website at www.sec.gov.

      Affiliated Transactions and Material Business Relationships. In 2001, Mr.
Swain surrendered for cancellation 60,000 options of Oppenheimer Acquisition
Company ("OAC") (the Manager's parent holding company) to MassMutual for a cash
payment of $2,700,600.

      Mr. Swain has reported that he sold a residential property to Mr. Freedman
on October 23, 2001 for $1.2 million. An independent appraisal of the property
supported the sale price.

      The address of each Trustee in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until his
or her resignation, retirement, death or removal.


- -------------------------------------------------------------------------------------

                                Independent Trustees

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Name,               Principal Occupation(s) During Past 5     Dollar     Aggregate
                                                                         Dollar
                                                                         Range Of
                                                                         Shares
                                                                         Beneficially
                                                                         Owned in
                    Years;                                    Range of   Any of the
Position(s) Held    Other Trusteeships/Directorships Held by  Shares     Oppenheimer
with Fund,          Trustee;                                  BeneficiallFunds
Length of Service,  Number of Portfolios in Fund Complex      Owned in   Overseen
Age                 Currently Overseen by Trustee             each Fund  by Trustee

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                                                                As of December 31,
                                                                          2002

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

James C. Swain,     Formerly,  Chief Executive Officer (until $0       Over
Chairman and        August  27,  2002) of the Board II Funds,          $100,000
Trustee since 2001  Vice Chairman  (until January 2, 2002) of
Age: 69             the Manager and  President and a director
                    (until 1997) of Centennial Asset Management Corporation (a
                    wholly-owned investment advisory subsidiary of the Manager).
                    Oversees 42 portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

William L.          Chairman   of   the   following   private $0       $50,001-
Armstrong,          mortgage banking companies:  Cherry Creek          $100,000
Trustee since 2001  Mortgage     Company     (since    1991),
Age: 66             Centennial  State Mortgage Company (since
                    1994),   The  El  Paso  Mortgage  Company
                    (since   1993),    Transland    Financial
                    Services,  Inc. (since 1997); Chairman of
                    the following  private  companies:  Great
                    Frontier  Insurance   (insurance  agency)
                    (since    1995),     Ambassador     Media
                    Corporation and Broadway  Ventures (since
                    1984);   a  director  of  the   following
                    public  companies:   Helmerich  &  Payne,
                    Inc.  (oil  and  gas  drilling/production
                    company)  (since 1992) and  UNUMProvident
                    (insurance  company)  (since  1991).  Mr.
                    Armstrong is also a  Director/Trustee  of
                    Campus   Crusade   for   Christ  and  the
                    Bradley  Foundation.  Formerly a director
                    of  the  following:   Storage  Technology
                    Corporation  (a  publicly-held   computer
                    equipment company)  (1991-February 2003),
                    International     Family    Entertainment
                    (television   channel)   (1992-1997)  and
                    Natec  Resources,   Inc.  (air  pollution
                    control  equipment and services  company)
                    (1991-1995),  Frontier Real Estate,  Inc.
                    (residential   real   estate   brokerage)
                    (1994-1999),  and  Frontier  Title (title
                    insurance  agency)  (1995-June  1999);  a
                    U.S.   Senator   (January    1979-January
                    1991).  Oversees  42  portfolios  in  the
                    OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Robert G. Avis,     Formerly,  Director and President of A.G. $0       1-$10,000
Trustee since 2001  Edwards  Capital,  Inc.  (General Partner
Age: 71             of private equity funds) (until  February
                    2001);  Chairman,   President  and  Chief
                    Executive   Officer   of   A.G.   Edwards
                    Capital,  Inc.  (until March 2000);  Vice
                    Chairman  and  Director of A.G.  Edwards,
                    Inc. and Vice Chairman of A.G.  Edwards &
                    Sons,   Inc.   (its   brokerage   company
                    subsidiary) (until March 1999);  Chairman
                    of A.G.  Edwards Trust Company and A.G.E.
                    Asset  Management   (investment  advisor)
                    (until  March   1999);   and  a  Director
                    (until  March  2000)  of A.G.  Edwards  &
                    Sons  and  A.G.  Edwards  Trust  Company.
                    Oversees    42    portfolios    in    the
                    OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

George C. Bowen,    Formerly (until April 1999):  Senior Vice $0       Over
Trustee since 2001  President   (from   September  1987)  and          $100,000
Age: 66             Treasurer   (from   March  1985)  of  the
                    Manager; Vice President (from June 1983) and Treasurer
                    (since March 1985) of OppenheimerFunds Distributor, Inc. (a
                    subsidiary of the Manager); Senior Vice President (since
                    February 1992), Treasurer (since July 1991) Assistant
                    Secretary and a director (since December 1991) of Centennial
                    Asset Management Corporation; Vice President (since October
                    1989) and Treasurer (since April 1986) of HarbourView Asset
                    Management Corporation (an investment advisory subsidiary of
                    the Manager); President, Treasurer and a director (June
                    1989-January 1990) of Centennial Capital Corporation (an
                    investment advisory subsidiary of the Manager); Vice
                    President and Treasurer (since August 1978) and Secretary
                    (since April 1981) of Shareholder Services, Inc. (a transfer
                    agent subsidiary of the Manager); Vice President, Treasurer
                    and Secretary (since November 1989) of Shareholder Financial
                    Services, Inc. (a transfer agent subsidiary of the Manager);
                    Assistant Treasurer (since March 1998) of Oppenheimer
                    Acquisition Corp. (the Manager's parent corporation);
                    Treasurer (since November 1989) of Oppenheimer Partnership
                    Holdings, Inc. (a holding company subsidiary of the
                    Manager); Vice President and Treasurer (since July 1996) of
                    Oppenheimer Real Asset Management, Inc. (an investment
                    advisory subsidiary of the Manager); Chief Executive Officer
                    and director (since March 1996) of MultiSource Services,
                    Inc. (a broker-dealer subsidiary of the Manager); Treasurer
                    (since October 1997) of OppenheimerFunds International Ltd.
                    and Oppenheimer Millennium Funds plc (offshore fund
                    management subsidiaries of the Manager). Oversees 42
                    portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Edward L. Cameron,  A  member  of The  Life  Guard  of  Mount $0       $50,001-
Trustee since 2001  Vernon,  George  Washington's home (since          $100,000
Age: 64             June  2000).  Formerly  (March 2001 - May
                    2002) Director of Genetic ID, Inc. and its subsidiaries (a
                    privately held biotech company); a partner with
                    PricewaterhouseCoopers LLP (from 1974-1999) (an accounting
                    firm) and Chairman (from 1994-1998), Price Waterhouse LLP
                    Global Investment Management Industry Services Group.
                    Oversees 42 portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Jon S. Fossel,      Chairman  and  Director  (since  1998) of $0       Over
Trustee since 2001  Rocky    Mountain   Elk   Foundation   (a          $100,000
Age: 61             not-for-profit    foundation);    and   a
                    director  (since  October  1999)  of P.R.
                    Pharmaceuticals    (a   privately    held
                    company) and  UNUMProvident (an insurance
                    company)  (since June 1, 2002).  Formerly
                    Chairman  and a director  (until  October
                    1996) and President  and Chief  Executive
                    Officer   (until  October  1995)  of  the
                    Manager;   President,   Chief   Executive
                    Officer  and a  director  of  Oppenheimer
                    Acquisition Corp.,  Shareholders Services
                    Inc.    and    Shareholder     Financials
                    Services,   Inc.  (until  October  1995).
                    Oversees    42    portfolios    in    the
                    OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Sam Freedman,       Director    of    Colorado    Uplift   (a $0        Over
Trustee since 2001  non-profit   charity)  (since   September           $100,000
Age: 62             1984).  Formerly (until October 1994) Mr.
                    Freedman held several positions in subsidiary or affiliated
                    companies of the Manager. Oversees 42 portfolios in the
                    OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Beverly          L. Trustee   (since   1996)  of   MassMutual $0      $10,001-
Hamilton,           Institutional  Funds  and of  MML  Series         $50,000
Trustee since 2002  Investment   Fund  (open-end   investment
Age: 56             companies);   Director  of  MML  Services
                    (since April 1987) and America Funds Emerging Markets Growth
                    Fund (since October 1991) (both are investment companies),
                    The California Endowment (a philanthropy organization)
                    (since April 2002), and Community Hospital of Monterey
                    Peninsula, (since February 2002); a trustee (since February
                    2000) of Monterey International Studies (an educational
                    organization), and an advisor to Unilever (Holland)'s
                    pension fund and to Credit Suisse First Boston's Sprout
                    venture capital unit. Mrs. Hamilton also is a member of the
                    investment committees of the Rockefeller Foundation, the
                    University of Michigan and Hartford Hospital. Formerly,
                    President (February 1991-April 2000) ARCO Investment
                    Management Company. Oversees 42 portfolios in the
                    OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Robert J. Malone,   Director    (since    2001)    of   Jones $0       Over
Trustee since 2002  Knowledge,   Inc.   (a   privately   held          $100,000
Age: 58             company), U.S. Exploration,  Inc., (since
                    1997),   Colorado  UpLIFT  (a  non-profit
                    organization)  (since 1986) and a trustee
                    of  the   Gallagher   Family   Foundation
                    (non-profit  organization)  (since 2000).
                    Formerly,   Chairman  of  U.S.   Bank  (a
                    subsidiary  of U.S.  Bancorp and formerly
                    Colorado     National     Bank,)    (July
                    1996-April  1,  1999) and a  director  of
                    Commercial   Assets,    Inc.   (a   REIT)
                    (1993-2000).  Oversees 42  portfolios  in
                    the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

F. William Trustee (since 1996) of MassMutual $0 Over Marshall, Jr.,
Institutional Funds and of MML Series $100,000 Trustee since 2001 Investment
Fund (open-end investment Age: 60 companies); Trustee (since 1987),
                    Chairman of the Board (since 2003) and Chairman of the
                    investment committee (since 1994) for the Worcester Polytech
                    Institute; President and Treasurer (since January 1999) of
                    the SIS Fund (a private not for profit charitable fund);
                    Trustee (since 1995) of the Springfield Library and Museum
                    Association; Trustee (since 1996) of the Community Music
                    School of Springfield. Formerly, member of the investment
                    committee of the Community Foundation of Western
                    Massachusetts (1998 - 2003); Chairman (January 1999-July
                    1999) of SIS & Family Bank, F.S.B. (formerly SIS Bank);
                    President, Chief Executive Officer and Director (May
                    1993-December 1998) of SIS Bankcorp, Inc. and SIS Bank
                    (formerly Springfield Institution for Savings) and Executive
                    Vice President (January 1999-July 1999) of Peoples Heritage
                    Financial Group, Inc. Oversees 42 portfolios in the
                    OppenheimerFunds complex.

- -------------------------------------------------------------------------------------


      The address of Mr. Murphy in the chart below is 498 Seventh Avenue, New
York, NY 10018. Mr. Murphy serves for an indefinite term, until his
resignation, death or removal.


- -------------------------------------------------------------------------------------

                           Interested Trustee and Officer

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Name,              Principal Occupation(s) During Past 5      Dollar     Aggregate
                                                                          Dollar
                                                                         Range Of
                                                                          Shares
                   Years;                                     Range of   Beneficially
Position(s) Held   Other Trusteeships/Directorships Held by   Shares     Owned in
with Fund,         Trustee;                                   BeneficiallAny of the
Length of Service, Number of Portfolios in Fund Complex       Owned in   Oppenheimer
Age                Currently Overseen by Trustee              each Fund  Funds

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                                                             As of December 31,
                                                                          2002

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

John V. Murphy,    Chairman,   Chief  Executive  Officer  and  $0        Over
President and      director  (since June 2001) and  President          $100,000
Trustee since 2001 (since  September  2000)  of the  Manager;
Age: 53            President  and a  director  or  trustee of
                   other Oppenheimer funds; President and a director (since July
                   2001) of Oppenheimer Acquisition Corp. and of Oppenheimer
                   Partnership Holdings, Inc.; a director (since November 2001)
                   of OppenheimerFunds Distributor, Inc.; Chairman and a
                   director (since July 2001) of Shareholder Services, Inc. and
                   of Shareholder Financial Services, Inc.; President and a
                   director (since July 2001) of OppenheimerFunds Legacy Program
                   (a charitable trust program established by the Manager); a
                   director of the following investment advisory subsidiaries of
                   OppenheimerFunds, Inc.: OFI Institutional Asset Management,
                   Inc. and Centennial Asset Management Corporation (since
                   November 2001), HarbourView Asset Management Corporation and
                   OFI Private Investments, Inc. (since July 2001); President
                   (since November 1, 2001) and a director (since July 2001) of
                   Oppenheimer Real Asset Management, Inc.; a director (since
                   November 2001) of Trinity Investment Management Corp. and
                   Tremont Advisers, Inc. (investment advisory affiliates of the
                   Manager); Executive Vice President (since February 1997) of
                   Massachusetts Mutual Life Insurance Company (the Manager's
                   parent company); a director (since June 1995) of DLB
                   Acquisition Corporation (a holding company that owns shares
                   of David L. Babson & Company, Inc.); formerly, Chief
                   Operating Officer (September 2000-June 2001) of the Manager;
                   President and trustee (November 1999-November 2001) of MML
                   Series Investment Fund and MassMutual Institutional Funds
                   (open-end investment companies); a director (September
                   1999-August 2000) of C.M. Life Insurance Company; President,
                   Chief Executive Officer and director (September 1999-August
                   2000) of MML Bay State Life Insurance Company; a director
                   (June 1989-June 1998) of Emerald Isle Bancorp and Hibernia
                   Savings Bank (a wholly-owned subsidiary of Emerald Isle
                   Bancorp). Oversees 74 portfolios in the OppenheimerFunds
                   complex.

- -------------------------------------------------------------------------------------


      The address of the Officers in the chart below is as follows: for
Messrs. Molleur and Zack and Ms. Feld, 498 Seventh Avenue, New York, NY
10018, for Messrs. Masterson, Vottiero and Wixted and Mses. Bechtolt and
Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each Officer serves for
an annual term or until his or her earlier resignation, death or removal.


- -------------------------------------------------------------------------------------

                                Officers of the Fund

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Name,                   Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund,
Length of Service,
Age

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer, Principal    the Manager;  Treasurer  (since  March 1999) of  HarbourView
Financial and           Asset Management  Corporation,  Shareholder Services,  Inc.,
Accounting Officer      Oppenheimer Real Asset Management  Corporation,  Shareholder
since 2001              Financial Services,  Inc., Oppenheimer Partnership Holdings,
Age: 43                 Inc.,  OFI Private  Investments,  Inc.  (since  March 2000),
                        OppenheimerFunds International Ltd. and Oppenheimer
                        Millennium Funds plc (since May 2000) and OFI
                        Institutional Asset Management, Inc. (since November
                        2000); Treasurer and Chief Financial Officer (since May
                        2000) of Oppenheimer Trust Company (a trust company
                        subsidiary of the Manager); Assistant Treasurer (since
                        March 1999) of Oppenheimer Acquisition Corp. and
                        OppenheimerFunds Legacy Program (since April 2000);
                        formerly Principal and Chief Operating Officer (March
                        1995-March 1999), Bankers Trust Company-Mutual Fund
                        Services Division. An officer of 90 portfolios in the
                        OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Connie Bechtolt,        Assistant Vice President of the Manager  (since September
Assistant Treasurer     1998); formerly Manager/Fund Accounting (September
since 2002              1994-September 1998) of the Manager. An officer of 90
Age: 39                 portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Philip Vottiero,        Vice  President/Fund  Accounting of the Manager (since March
Assistant Treasurer     2002;  formerly Vice  President/Corporate  Accounting of the
since 2002              Manager (July  1999-March  2002) prior to which he was Chief
Age: 39                 Financial  Officer at Sovlink  Corporation  (April 1996-June
                        1999). An officer of 90 portfolios in the
                        OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Robert G. Zack,         Senior Vice President  (since May 1985) and General  Counsel
Vice President &    (since February 2002) of the Manager;  General Counsel and a
Secretary since 2001    director   (since   November   2001)   of   OppenheimerFunds
Age: 54                 Distributor,   Inc.;   Senior  Vice  President  and  General
                        Counsel (since November 2001) of HarbourView Asset
                        Management Corporation; Vice President and a director
                        (since November 2000) of Oppenheimer Partnership
                        Holdings, Inc.; Senior Vice President, General Counsel
                        and a director (since November 2001) of Shareholder
                        Services, Inc., Shareholder Financial Services, Inc.,
                        OFI Private Investments, Inc., Oppenheimer Trust Company
                        and OFI Institutional Asset Management, Inc.; General
                        Counsel (since November 2001) of Centennial Asset
                        Management Corporation; a director (since November 2001)
                        of Oppenheimer Real Asset Management, Inc.; Assistant
                        Secretary and a director (since November 2001) of
                        OppenheimerFunds International Ltd.; Vice President
                        (since November 2001) of OppenheimerFunds Legacy
                        Program; Secretary (since November 2001) of Oppenheimer
                        Acquisition Corp.; formerly Acting General Counsel
                        (November 2001-February 2002) and Associate General
                        Counsel (May 1981-October 2001) of the Manager;
                        Assistant Secretary of Shareholder Services, Inc. (May
                        1985-November 2001), Shareholder Financial Services,
                        Inc. (November 1989-November 2001); OppenheimerFunds
                        International Ltd. And Oppenheimer Millennium Funds plc
                        (October 1997-November 2001). An officer of 90
                        portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Katherine P. Feld,      Vice  President and Senior  Counsel (since July 1999) of the
Assistant Secretary     Manager;    Vice    President    (since    June   1990)   of
since 2001              OppenheimerFunds    Distributor,    Inc.;   Director,   Vice
Age: 44                 President  and  Assistant  Secretary  (since  June  1999) of
                        Centennial Asset Management Corporation; Vice President
                        (since 1997) of Oppenheimer Real Asset Management, Inc.;
                        formerly Vice President and Associate Counsel of the
                        Manager (June 1990-July 1999). An officer of 90
                        portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Kathleen T. Ives,       Vice  President and Assistant  Counsel  (since June 1998) of
Assistant Secretary     the    Manager;    Vice    President    (since    1999)   of
since 2001              OppenheimerFunds  Distributor,   Inc.;  Vice  President  and
Age: 37                 Assistant  Secretary  (since 1999) of Shareholder  Services,
                        Inc.;   Assistant   Secretary   (since   December  2001)  of
                        OppenheimerFunds  Legacy Program and  Shareholder  Financial
                        Services,   Inc.;  formerly  Assistant  Vice  President  and
                        Assistant  Counsel of the Manager (August  1997-June  1998);
                        Assistant Counsel of the Manager (August  1994-August 1997).
                        An officer of 90 portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Philip T. Masterson, Vice President and Assistant Counsel of the Manager (since
Assistant Secretary July 1998); formerly, an associate with Davis, Graham, &
since 2002 Stubbs LLP (January 1997-June 1998). An officer of 90 Age: 39
portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Denis R. Molleur,       Vice  President  and Senior  Counsel of the  Manager  (since
Assistant Secretary     July 1999);  formerly a Vice President and Associate Counsel
since 2001              of the Manager (September  1995-July 1999). An officer of 83
Age: 45                 portfolios in the OppenheimerFunds complex.

- -------------------------------------------------------------------------------------

      |X| Remuneration of Trustees. The officers of the Trust and one Trustee,
Mr. Murphy, are affiliated with the Manager and receive no salary or fee from
the Funds. The remaining Trustees receive the compensation shown below. The
aggregate compensation from each Fund is for its fiscal year ending November 31,
2002 (December 31, 2002 for the OSM - Mercury Advisors S&P 500 Index Fund).
The compensation from all of the Board II funds includes the compensation from
the Funds and represents compensation received as a director, trustee, managing
general partner or member of a committee of the Board during the calendar year
2002.


- ---------------------------------------------------------------------------------

                        Aggregate Compensation from Funds          Total
                                                                   Compensation
                                                                   from
                                                                   Funds and
                                                                   Fund
                                                                   Complex
                                                                   Paid to
                                                                   Trustees*

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Name of Trustee       Mercury   Mercury            Jennison
                      Advisor   Advisors  QM                Salomon   Gartmore
                      S&P   Focus     Active            Brother   Millennium
                       500      Growth    Balanced          All       Growth
                      Index     Fund2     Fund2    Growth   Cap       Fund2
                      Fund1                        Fund2    Fund2

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

James C. Swain         $726   $676    $663    $647    $691    $661     $177,996
Chairman of the Board

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

William Armstrong
Audit Committee        $375   $350    $343    $335    $357    $342     $92,076
Member

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Robert G. Avis
Review Committee       $376   $350    $344    $335    $358    $342     $92,199
Member

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

George C. Bowen
Audit Committee        $372   $346    $340    $331    $354    $338     $91,124
Member

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Edward Cameron
Audit Committee        $407   $379    $372    $363    $387    $370     $99,743
Chairman

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

John S. Fossel
Review Committee       $386   $382    $375    $366    $391    $374     $100,723
Chairman

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Sam Freedman
Review Committee       $376   $350    $344    $335    $358    $342     $92,199
Member

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Beverly Hamilton5
Review Committee      $2386   $2216   $2176   $2126  $2266    $2166    $58,3267
Member

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Robert J. Malone5
Audit Committee       $2388   $2218   $2178   $2128  $2268    $2168    $58,326
Member

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

F. William Marshall
Review Committee       $372   $346    $340    $331    $354    $338     $91,1249
Member

- ---------------------------------------------------------------------------------

1. For the Fund's fiscal year ended December 31, 2002.
2. For the Fund's fiscal year ended November 30, 2002.
3. Effective July 1, 2002, C. Howard Kast and Robert M. Kirchner retired as
Trustees from the Board II Funds For the fiscal years shown in the table, Mr.
Kast received $946 and Mr. Kirchner received $867 aggregate compensation from
the Fund. For the calendar year ended December 31, 2002, Mr. Kast received
$41,451 and Mr. Kirchner received $38,001 total compensation from all of the
Oppenheimer funds for which they served as Trustees.
4. Aggregate Compensation From Fund includes fees and deferred compensation, if
any, for a Trustee.
5. Mrs. Hamilton and Mr. Malone were elected as Trustees of
the Board II Funds effective June 1, 2002. Compensation for Mrs. Hamilton and
Mr. Malone was paid by all the Board II Funds, with the exception of Oppenheimer
Senior Floating Rate Fund for which they currently do not serve as Trustees
(total of 42 Oppenheimer funds).
6. Includes $660 deferred under Deferred Compensation Plan described below.
7. Includes $55,333 compensation (of which 100% was deferred under a deferred
compensation plan) paid to Mrs. Hamilton for serving as a trustee by two
open-end investment companies (MassMutual Institutional Funds and MML Series
Investment Fund) the investment adviser for which is the indirect parent company
of the Fund's Manager. The Manager also serves as the Sub-Advisor to the
MassMutual International Equity Fund, a series of MassMutual Institutional
Funds.
8. Includes $1,130 deferred under Deferred Compensation Plan described below.
9. Includes $47,000 of compensation paid to Mr. Marshall for serving as a trustee
by two open-end investment companies (MassMutual Institutional Funds and MML
Series Investment Fund) the investment adviser for which is the indirect parent
company of the Fund's Manager. The Manager also serves as the Sub-Advisor to the
MassMutual International Equity Fund, a series of MassMutual Institutional
Funds.
* For purposes of this section only, "Fund Complex" includes the Oppenheimer
funds, MassMutual Institutional Funds and MML Series Investment Fund in
accordance with the instructions for Form N-1A. The Manager does not consider
MassMutual Institutional Funds and MML Series Investment Fund to be part of the
OppenheimerFunds "Fund Complex" as that term may be otherwise interpreted.

      |X| Deferred Compensation Plan for Trustees. The Board of Trustees has
adopted a Deferred Compensation Plan for disinterested Trustees that enables
them to elect to defer receipt of all or a portion of the annual fees they are
entitled to receive from a Fund. Under the plan, the compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested in shares of one or more Oppenheimer funds selected by the Trustee. The
amount paid to the Trustee under the plan will be determined based upon the
performance of the selected funds.


      Deferral of Trustees' fees under the plan will not materially affect the
Funds' assets, liabilities and net income per share. The plan will not obligate
the Fund to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee. Pursuant to an Order issued by the Commission, the
Funds may invest in the funds selected by the Trustee under the plan without
shareholder approval for the limited purpose of determining the value of the
Trustee's deferred fee account.


      |X| Major Shareholders. As of March 11, 2003, the only persons who owned
of record or were known by the Funds to own beneficially 5% or more of any class
of the Funds' outstanding securities were:

      OSM - Mercury Advisors S&P 500 Index Fund
      RELIANCE TRUST CO CUST FBO PATHLORE , 401K PROF SHARING PLAN, PO BOX
      48529, ATLANTA GA 30362-1529, which owned 69,200.816 Class A shares (6.72%
      of the Class A shares then outstanding); RPSS TR, TRIM SYSTEMS LLC, 401K
      PLAN, ATTN: HALLIE BURKE, 5700 PERIMETER DR STE A, DUBLIN OH 43017-3253,
      which owned 65,410.310 Class A shares (6.35% of the Class A shares then
      outstanding); RPSS TR, J KINGS FOOD SERVICE, PROFESSIONALS INC 401K PLAN,
      ATTN: MELISSA SHULMAN. 700 FURROWS RD, HOLTSVILLE NY 11742-2001, which
      owned 60,753.569 Class A shares (5.89% of the Class A shares then
      outstanding); RELIANCE TRUST COMPANY TR, CORNELL COMPANIES INC, PO BOX
      48529, ATLANTA GA 30362-1529, which owned 207,188.686 Class N shares
      (10.21% of the Class N shares then outstanding); OPPENHEIMERFUNDS INC, C/O
      RAY OLSON BLDG 2, 6803 S TUCSON WAY, CENTENNIAL CO 80112-3924, which owned
      100.00 Class Y shares (81.16% of the Class Y shares then outstanding);
      RPSS TR ROLLOVER IRA, FBO DOUGLAS J SCHOENFELD, 503 ALPINE LN, HOLMEN WI
      54636-9143, which owned 23.201 Class Y shares (18.83% of the Class Y
      shares then outstanding).

      OSM - Mercury Advisors Focus Growth Fund
      RPSS TR ROLLOVER IRA, FBO JOHN R HAYES, 7026 SAN ALTOS CIR, CITRUS HEIGHTS
      CA 95621-4362, which owned 22,677.685 Class B shares (7.19% of the Class B
      shares then outstanding); MARLENE CASTLE / DOUG CASTLE TR, EXCEL
      FABRICATING INC, 2301 NEVADA AVE N, GOLDEN VALLEY MN 55427-3609, which
      owned 17,252.852 Class C shares (6.59% of the Class Y shares then
      outstanding); G CANINO T WALSH & J VAN SON TR, ISLAND RISK MANAGEMENT
      ASSOC, 401K PLAN, 65 W HILLS RD, HUNTINGTN STA NY 11746-2305, which owned
      10,849.813 Class N shares (34.52% of the Class N shares then outstanding);
      RPSS TR ROLLOVER IRA, FBO SUZANNE M OSTRANDER, 34 GARROW AVE, PEQUANNOCK
      NJ 07440-1603, which owned 4,119.850 Class N shares (13.10% of the Class N
      shares than outstanding); RPSS TR ROLLOVER IRA, FBO MOUSTAFA O NASR, 25525
      VIA PALADAR, VALENCIA CA 91355-3153, which owned 3,662.149 Class N shares
      (11.65% of the Class N shares then outstanding); OPPENHEIMERFUNDS INC, C/O
      RAY OLSON BLDG 2, 6803 S TUCSON WAY, CENTENNIAL CO 80112-3924, which owned
      100.00 Class Y shares (100.00% of the Class Y shares then outstanding).

      OSM - QM Active Balanced Fund
      OPPENHEIMERFUNDS, DISTRIBUTOR INC, ATTN: RAY OLSON, 6803 S TUCSON WAY,
      ENGLEWOOD CO 80112-3924, which owned 500,000.000 Class A shares (84.87% of
      the Class A shares then outstanding); LAWRENCE T BLOCH, 365 W 28TH ST
      #18H, NEW YORK NY 10001-7917, which owned 5,292.000 Class B shares (7.88%
      of the Class B shares then outstanding); MLPF&S CUST FBO, KENNETH GOTTLIEB
      IRA, FBO KENNETH GOTTLIEB, 7715 SOUTHAMPTON TER #E411, TAMARAC FL
      33321-9110, which owned 4,721.000 Class B shares (7.03% of the Class B
      shares then outstanding); RPSS CUST 403-B PLAN, ROME CITY SCHOOLS, FBO
      ANTHONY J VINCI, 804 HICKORY ST, ROME NY 13440-2132, which owned 7,157.194
      Class B shares (10.65% of the Class B shares then outstanding); RPSS TR
      IRA, FBO GLENN R WHITNEY, PO BOX 27, MOUNTAINVILLE NY 10953-0027, which
      owned 3,863.063 Class B shares (5.75%of the Class B shares then
      outstanding); RPSS TR, GAZETTEN CONTRACTING INC, 401(K) PLAN, ATTN:
      WILLIAM A CYNE, 58 W 40TH ST, NEW YORK NY 10018-2658, which owned
      3,679.244 Class B shares (5.47% of the Class B shares then outstanding);
      RPSS TR ROLLOVER IRA, FBO MARTIN C SCHNEIDER, 7860 MISSION CENTER CT STE
      205, SAN DIEGO CA 92108-1331, which owned 6,476.275 Class C shares (8.79%
      of the Class C shares then outstanding); RPSS TR ROLLOVER IRA, FBO SALLY
      HENSLEY, 3812 MINERS LOOP, COEUR D ALENE ID 83815-9691, which owned
      4,394.186 Class C shares (5.96% of the Class C shares then outstanding);
      RPSS TR, MATHENY MOTOR TRUCK CO, 401(K) PLAN, ATTN MARNI KEPPLE, PO BOX
      1304, PARKERSBURG WV 26102-1304, which owned 21,406.576 Class N shares
      (39.00% of the Class N shares then outstanding); RPSS TR, BLACHFORD
      INVESTMENTS INC, 401K PLAN, ATTN: DORI WITT, 1400 NUCLEAR DR, WEST CHICAGO
      IL 60185-1636, which owned 20,939.496 Class N shares (38.14% of the Class
      N shares then outstanding); RPSS TR ROLLOVER IRA, FBO KENNETH T HARTMAN,
      614 HANOVER LN, IRVING TX 75062-8918, which owned 3,272.463 Class N shares
      (5.96% of the Class N shares then outstanding); OPPENHEIMERFUNDS INC, C/O
      RAY OLSON BLDG 2, 6803 S TUCSON WAY, CENTENNIAL CO 80112-3924, which owned
      100.00 Class Y shares (100.00% of the Class Y shares then outstanding).

      OSM - Jennison Growth Fund
      OPPENHEIMERFUNDS, DISTRIBUTOR INC, ATTN: RAY OLSON, 803 S TUCSON WAY,
      ENGLEWOOD CO 80112-3924, which owned 500,000.000 Class A shares (62.02% of
      the Class A shares then outstanding); RPSS TR, GREYSTAR MANAGEMENT
      SERVICES LP, 401K PLAN, ATTN TONY WHEELER, 3411 RICHMOND AVE STE 200,
      HOUSTON TX 77046-3412, which owned 41,115.372Class N shares (16.27% of the
      Class N shares then outstanding); RPSS TR, CAPITAL COMMUNICATIONS FEDERAL,
      401(K) PLAN, ATTN NANCY DURIVAGE, 18 COMPUTER DR E, ALBANY NY 12205-1111,
      which owned 34,817.417 Class N shares (13.78% of the Class N shares then
      outstanding); ROLLIN M DICK TR, HAVERSTICK CONSULTING INC, 401K PLAN,
      11405 N PENNSYLVANIA ST STE 210, CARMEL IN 46032-6905, which owned
      31,919.001 Class N shares (12.63% of the Class N shares then outstanding);
      RPSS TR, COSMETIC ESSENCE INC, 401(K) PLAN, ATTN: CAMILLE CALVONI, 2182
      ROUTE 35, HOLMDEL NJ 07733-1125, which owned 27,676.000 Class N shares
      (10.95% of the Class N shares then outstanding); RPSS TR, FIDELITY DEPOSIT
      & DISCOUNT BAN, 401(K) PLAN, BLAKELY & DRINKER STS, DUNMORE PA 18512,
      which owned 15,118.713 Class N shares (5.98% of the Class N shares then
      outstanding); LYN H HAMMOND TR, PELHAM FAMILY PRACTICE 401K, 25 CREEKVIEW
      CT, GREENVILLE SC 29615-4800, which owned 12,785.683 Class N shares (5.06%
      of the Class N shares then outstanding); OPPENHEIMERFUNDS INC, C/O RAY
      OLSON BLDG 2, 6803 S TUCSON WAY, CENTENNIAL CO 80112-3924, which owned
      100.00 Class Y shares (100.00% of the Class Y shares then outstanding).

      OSM - Salomon Brothers All Cap Fund
      RPSS TR, UMG MANUFACTURING & LOGISTICS INC 401K, ATTN ANGELA M JONES, 700
      S BATTLEGROUND AVE, GROVER NC 28073-9541, which owned 41,618.100 Class A
      shares (5.74% of the Class A shares then outstanding); SHELIA LITTLETON ET
      AL TR, LEGACY BANK OF TEXAS 401K, 5000 LEGACY DR, PLANO TX 75024-3100,
      which owned 83,321.069 Class N shares (10.18% of the Class N shares then
      outstanding); MCB TRUST SERVICES TTEE, LINDEN MOTOR FREIGHT CO INC, NON
      UNION EMPLOYEE, 700 17TH ST STE 150, DENVER CO 80202-3507, which owned
      75,784.126 Class N shares (9.26% of the Class N shares then outstanding);
      WEBB, BECK & DAWSON TR, BECK,REDDEN & SECREST PSP, 1221 MCKINNEY ST STE
      4500, HOUSTON TX 77010-2029, which owned 68,349.298 Class N shares (8.35%
      of the Class N shares then outstanding); RPSS TR, DOBBS BROTHERS
      MANAGEMENT SERVI, 401(K) PLAN, ATTN: JOYCE HOWELL, 5170 SANDERLIN AVE STE
      102, MEMPHIS TN 38117-4359, which owned 47,431.106 Class N shares (5.79%
      of the Class N shares then outstanding); OPPENHEIMERFUNDS INC, C/O RAY
      OLSON BLDG 2, 6803 S TUCSON WAY, CENTENNIAL CO 80112-3924, which owned
      100.00 Class Y shares (100.00% of the Class Y shares then outstanding);

      OSM - Gartmore Millennium Growth Fund II
      OPPENHEIMERFUNDS, DISTRIBUTOR INC, ATTN: RAY OLSON, 6803 S TUCSON WAY,
      ENGLEWOOD CO 80112-3924, which owned 500,000.000 Class A shares (92.28% of
      the Class A shares then outstanding); MARY S. GIRARDI - IRA, 397 WINDSOR
      PLACE, OCEANSIDE NY 11572, which owned 6,685.620 Class B shares (16.43% of
      the Class B shares then outstanding); JOHN GARRABRANT - IRA, 173 SHERIDAN
      AVE, LONGWOOD FL 32750, which owned 6,173.718 Class B shares (15.17% of
      the Class B shares then outstanding); RPSS TR, CLAIMS CONFERENCE 401K
      PLAN, ATTN: CELESTE LEVY, 15 E 26TH ST STE 906, NEW YORK NY 10010-1533,
      which owned 2,314.341 Class B shares (5.68% of the Class B shares then
      outstanding); MARGARET HARWELL - IRA, 6712 NW 1st , MARGATE FL 33063, who
      owned 2,252.747 Class B shares (5.53% of the Class B shares then
      outstanding); MORGAN STANLEY DW INC CUST FOR MARY ELLEN MALLOY, PO BOX 250
      CHURCH STREET STATION, NEW YORK NY 10008-0250, which owned 2,834.994 Class
      C shares (10.68% of the Class C shares then outstanding); RPSS TR ROLLOVER
      IRA, FBO PATRICK J BARNETT, 122 N PROVIDENCE RD, WALLINGFORD PA
      19086-6135, which owned 1,826.445 Class C shares (6.88% of the Class C
      shares then outstanding); RPSS CUST 403-B PLAN, LEVITTOWN SCHOOLS, FBO
      LAURA A DAMURO, 181 STEWART AVE, GARDEN CITY NY 11530-2507, which owned
      1,728.374 Class C shares (6.51% of the Class C shares then outstanding);
      ROBERT H LYNCH JR TR, ARISTEIA CAPITAL LLC, ATTN: EDWARD P GOLDMAN, 381
      5TH AVE FL 6, NEW YORK NY 10016-3322, which owned 1,524.927 Class C shares
      (5.74% of the Class C shares then outstanding); RPSS TR IRA, FBO PAUL J
      GIAMBALVO, 123 WALNUT ST, MIDDLESEX NJ 08846-1031, which owned 1,486.773
      Class C shares (5.60% of the Class C shares then outstanding); RPSS TR
      IRA, FBO MONICA V WOJTYNIAK, 14 TERRACE PL, HICKSVILLE NY 11801-4336,
      which owned 1,428.890 Class C shares (5.38% of the Class C shares then
      outstanding); ALFRED P DOUGHERTY - IRA, 445 COVETOWER DR APT 601, NAPLES
      FL 34110, who owned 1,336.761 Class C shares (5.03% of the Class C shares
      then outstanding); RPSS TR, FIDELITY DEPOSIT & DISCOUNT BAN, 401(K) PLAN,
      BLAKELY & DRINKER STS, DUNMORE PA 18512, which owned 6,184.927 Class N
      shares (47.45% of the Class N shares then outstanding); NGOC MINH PHAM TR,
      NGOC MINH PHAM MD & SUONG MY, TUONG MD APC DEF BENEFIT PLAN, 2363 ULRIC ST
      STE B, SAN DIEGO CA 92111-6447, which owned 4,055.946 Class N shares
      (31.12% of the Class N shares then outstanding); JOHN VAN DE WIELE TR, VAN
      DE WIELE ENGINEERING INC, 401K PSP, 2925 BRIARPARK DR STE 275, HOUSTON TX
      77042-3725, which owned 2,097.265 Class N shares (16.09% of the Class N
      shares then outstanding); OPPENHEIMERFUNDS INC, C/O RAY OLSON BLDG 2, 6803
      S TUCSON WAY, CENTENNIAL CO 80112-3924, which owned 100.00 Class Y shares
      (100.00% of the Class Y shares then outstanding).


The Manager. The Manager is wholly-owned by Oppenheimer Acquisition Corp., a
holding company controlled by Massachusetts Mutual Life Insurance Company.

      |X| Code of Ethics. The Funds, the Manager, the Adviser and each
Subadviser, and the Distributor each have a Code of Ethics. Each Code is
designed to detect and prevent improper personal trading by certain employees
that would compete with or take advantage of the Fund's portfolio transactions.
Covered persons include persons with knowledge of the investments and investment
intentions of the Funds and other funds advised by the Manager. The Codes of
Ethics do permit personnel subject to the relevant Code to invest in securities,
including securities that may be purchased or held by the Funds, subject to a
number of restrictions and controls. Compliance with the Code of Ethics is
carefully monitored and enforced by the Manager.

      Each Fund's Code of Ethics is an exhibit to the Funds' registration
statement filed with the Securities and Exchange Commission and can be reviewed
and copied at the SEC's Public Reference Room in Washington, D.C. You can obtain
information about the hours of operation of the Public Reference Room by calling
the SEC at 1-202-942-8090. The Code of Ethics can also be viewed as part of the
Fund's registration statement on the SEC's EDGAR database at the SEC's Internet
web site at http://www.sec.gov. Copies may be obtained, after paying a
duplicating fee, by electronic request at the following E-mail address:
publicinfo@sec.gov., or by writing to the SEC's Public Reference Section,
Washington, D.C. 20549-0102.

Management and Advisory Arrangements - OSM - Mercury Advisors S&P 500 Index
Fund and OSM - Mercury Advisors Focus Growth Fund

      Management Services and Management Fee. The OSM - Mercury Advisors S&P
500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund each invests all
of its assets in shares of a Master Fund. Accordingly, these Funds do not invest
directly in portfolio securities and do not require investment advisory
services. All portfolio management occurs at the level of the respective Master
Fund. Each Master Fund has entered into an investment management agreement with
Fund Asset Management, L.P., doing business as Mercury Advisors, as Adviser (the
"Management Agreement"). The Adviser receives monthly compensation at the annual
rate of 0.60% of the average daily net assets of the Master Fund in which the
OSM - Mercury Advisors Focus Growth Fund invests. The Adviser is entitled to
receive a monthly management fee at the annual contractual rate of 0.05% of the
average daily net assets of the Master Fund in which the OSM - Mercury Advisors
S&P 500 Index Fund invests. The Adviser has entered into a contractual
arrangement with this Master Fund to provide that the management fee for the
Master Fund, when combined with administration fees of certain funds that invest
in the Master Fund (other than OSM - Mercury Advisors S&P 500 Index Fund),
will not exceed a specific amount. As a result of this contractual arrangement,
the Adviser currently receives management fees of 0.005%. This arrangement has a
one-year term and is renewable.

                                                Management Fee
      Fund                                      Paid to the Adviser


      OSM - Mercury Advisors Focus Growth Fund
           For the period ended 11/30/01           $4,617,970
           For the fiscal year ended 11/30/02      $1,718,971

      OSM - Mercury Advisors S&P 500 Index Fund
           For the period ended 12/31/01           $91,454
           For the fiscal year ended 12/31/02      $93,240

      The Adviser has also entered into a subadvisory agreement (the
"Sub-Advisory Agreement") with Merrill Lynch Asset Management U.K. Limited
("MLAM U.K.") pursuant to which MLAM U.K. provides investment advisory
services to the Adviser with respect to the OSM - Mercury Advisors Focus
Growth Fund. The following entities may be considered "controlling persons"
of MLAM U.K.: Merrill Lynch Europe PLC (MLAM U.K.'s parent), a subsidiary of
Merrill Lynch International Holdings, Inc., a subsidiary of Merrill Lynch
International, Inc., a subsidiary of ML & Co. For the fiscal period ended
November 30, 2001 and for the fiscal year ended November 30, 2002, the
Adviser paid no fees to MLAM U.K. pursuant to the Sub-Advisory Agreement.


      Payment of Master Fund Expenses. The Management Agreement obligates the
Adviser to provide investment advisory services and to pay, or cause an
affiliate to pay, for maintaining its staff and personnel and to provide office
space, facilities and necessary personnel for the Master Fund. The Adviser is
also obligated to pay, or cause an affiliate to pay, the fees of all officers
and Trustees of the Master Fund who are affiliated persons of the Adviser or any
affiliate. The Master Fund pays, or causes to be paid, all other expenses
incurred in the operation of the Master Fund (except to the extent paid by its
placement agent), including, among other things, taxes, expenses for legal and
auditing services, costs of printing proxies, shareholder reports, copies of the
Registration Statement, charges of the custodian, any sub-custodian and the
transfer agent, expenses of portfolio transactions, expenses of redemption of
shares, Commission fees, expenses of registering the shares under federal, state
or non-U.S. laws, fees and actual out-of-pocket expenses of Trustees who are not
affiliated persons of the Adviser or an affiliate of the Adviser, accounting and
pricing costs (including the daily calculation of net asset value), insurance,
interest, brokerage costs, litigation and other extraordinary or non-recurring
expenses, and other expenses properly payable by the Master Fund. The Master
Fund's placement agent will pay certain of the expenses of the Master Fund
incurred in connection with the offering of its shares of beneficial interest.
Certain accounting services are provided to the Master Fund by State Street Bank
& Trust Company ("State Street") pursuant to an agreement between State Street
and the Master Fund. The Master Fund pays a fee for these services. In addition,
the Master Fund will reimburse the Adviser for the cost of certain additional
accounting services.

      Organization of the Adviser. Fund Asset Management, L.P. is a limited
partnership, the partners of which are Merrill Lynch & Co., Inc., a financial
services holding company and the parent of Merrill Lynch and Princeton
Services, Inc. Merrill Lynch & Co., Inc. and Princeton Services are
"controlling persons" of the Adviser as defined under the Investment Company
Act because of their ownership of its voting securities and their power to
exercise a controlling influence over its management or policies.

      Duration and Termination. Unless earlier terminated as described below,
each Management Agreement will remain in effect for two (2) years from its
effective date. Thereafter, it will remain in effect from year to year if
approved annually (a) by the Board of Trustees of the Master Fund or by a
majority of the outstanding shares of the Master Fund and (b) by a majority of
the Trustees who are not parties to such contract or interested persons (as
defined in the Investment Company Act) of any such party. Each contract is not
assignable, automatically terminates in the event of its assignment, and may be
terminated without penalty on sixty (60) days' written notice at the option of
either party thereto or by the vote of the majority of the outstanding voting
securities of the appropriate Master Fund.

      Investment Advisory Agreement with OppenheimerFunds, Inc. The OSM -
Mercury Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth
Fund have entered into an Investment Advisory Agreement with OppenheimerFunds,
Inc. Those Advisory Agreements are substantially similar to the Advisory
Agreements entered into with OppenheimerFunds, Inc. by the other series of the
Trust, as further described below. Those Agreements have been approved by the
Trust's Board of Trustees and OppenheimerFunds, Inc., as the sole shareholder of
each Fund, but will not become effective unless and until the Master-Feeder
Participation Agreement between OppenheimerFunds, Inc., OppenheimerFunds
Distributor, Inc., the Trust and FAM Distributors, Inc. is terminated. The fees
payable under those Advisory Agreements are discussed in the Prospectus.


      At respective meetings of the Board of Trustees of the Trust, the Board of
Trustees of the Master Fund of the OSM - S&P 500 Index Fund and the Board of
Trustees of Master Fund of the OSM - Mercury Advisors Focus Growth Fund, held on
May 8, 2002 and March 13, 2002, respectively, each Board approved the
continuation of the applicable Master Fund's Management Agreement with the
Adviser for an additional year. In connection with its consideration of the
applicable Management Agreement, each Board reviewed information derived from a
number of sources and covering a range of issues. Each Board considered the
services provided to the Master Fund by the Adviser under the applicable
Management Agreement, as well as other services provided by the Adviser and its
affiliates under other agreements, including the Subadministration Agreement,
and the personnel who provided these services. In addition to investment
advisory services, the Adviser and its affiliates provide administrative
services, oversight of Master Fund accounting, assistance in meeting legal and
regulatory requirements, and other services necessary for the operation of the
Master Funds. Each Board also considered the Adviser's costs of providing
services, and the direct and indirect benefits to the Adviser from its
relationship with the applicable Master Fund. The benefits considered by each
Board included not only the Adviser's compensation for investment advisory
services and the Adviser's profitability under the applicable Management
Agreement, but also compensation paid to the Adviser or its affiliates for
other, non-advisory, services provided to the Master Fund and the Funds. Each
Board also considered the Adviser's access to research services from brokers to
which the Adviser may have allocated Master Fund brokerage in a "soft dollar"
arrangement. In connection with its consideration of the applicable Management
Agreement, each Board also compared the advisory fee rate, expense ratios and
historical performance of the Master Fund to those of comparable funds. Based in
part on this comparison, and taking into account the various services provided
to the applicable Master Fund and Fund by the Adviser and its affiliates, each
Board concluded that the management fee rate was reasonable. Each Board also
considered whether there should be changes in the advisory fee rate or structure
in order to enable the Master Fund to participate in any economies of scale that
the Adviser may experience as a result of growth in the applicable Master Fund's
assets.


      Based on the information reviewed and the discussions, each Board
concluded that it was satisfied with the nature and quality of the services
provided by the Adviser to the Master Fund and that the management fee rate was
reasonable in relation to such services. The non-interested Trustees of each
Board were represented by independent counsel who assisted them in their
deliberations.


      |X| The Investment Advisory Agreement - OSM - QM Active Balanced Fund, OSM
- - Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore
Millennium Growth Fund II. The Manager provides investment advisory and
management services to the OSM - QM Active Balanced Fund, OSM - Jennison Growth
Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore Millennium Growth
Fund II under investment advisory agreements between the Manager and the Trust
on behalf of each such Fund. The Manager handles those Funds' day-to-day
administrative business, and the agreements permit the Manager to enter into
Subadvisory agreements with other registered investment advisers to obtain
specialized services for the Funds, as long as the Funds are not obligated to
pay any additional fees for those services. The Manager has retained the
Subadvisers pursuant to separate subadvisory agreements, described below, under
which each Subadviser buys and sells portfolio securities for the respective
Fund. The portfolio manager of each of the Funds is employed by the Subadviser
and is the person who is principally responsible for the day-to-day management
of each of the Fund's portfolio, as described below.


    The investment advisory agreement between the Trust on behalf of each Fund
and the Manager requires the Manager, at its expense, to provide the Fund with
adequate office space, facilities and equipment. It also requires the Manager to
provide and supervise the activities of all administrative and clerical
personnel required to provide effective administration for the Fund. Those
responsibilities include the compilation and maintenance of records with respect
to its operations, the preparation and filing of specified reports, and
composition of proxy materials and registration statements for continuous public
sale of shares of the Fund.


    Each of the Funds pays expenses not expressly assumed by the Manager under
the advisory agreement. Expenses for the Trust's QM Active Balanced Fund, OSM -
Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore
Millennium Growth Fund II are allocated to those Funds in proportion to their
net assets, unless allocations of expenses can be made directly to a Fund. The
advisory agreements list examples of expenses paid by those Funds. The major
categories relate to calculation of each of the Fund's net asset values per
share, interest, taxes, brokerage commissions, fees to certain Trustees, legal
and audit expenses, custodian and transfer agent expenses, share issuance costs,
certain printing and registration costs and non-recurring expenses, including
litigation costs. The management fees paid by the Funds to the Manager are
calculated at the rates described in the Prospectus, which are applied to the
assets of the Funds as a whole. The fees are allocated to each class of shares
based upon the relative proportion of each of the Fund's net assets represented
by that class. The management fees paid by the Funds to the Manager during their
last two fiscal years are listed below.


- ----------------------------------------------------------------

Fund                                 Management Fee Paid to
                                     OppenheimerFunds, Inc.

- ----------------------------------------------------------------
- ----------------------------------------------------------------

                                     For the        For the
                                  fiscal period      fiscal
                                  ended 11/30/01   year ended
                                                    11/30/02

- ----------------------------------------------------------------
- ----------------------------------------------------------------

QM Active Balanced Fund              $36,322        $53,310

- ----------------------------------------------------------------
- ----------------------------------------------------------------

Jennison Growth Fund                 $39,198        $76,321

- ----------------------------------------------------------------
- ----------------------------------------------------------------

Salomon Brothers All Cap Fund        $77,987        $238,043

- ----------------------------------------------------------------
- ----------------------------------------------------------------

Gartmore Millennium Growth Fund      $41,736        $46,707

- ----------------------------------------------------------------

    The investment advisory agreement states that in the absence of willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss resulting from a good faith
error or omission on its part with respect to any of its duties under the
agreement.

    The agreement permits the Manager to act as investment adviser for any other
person, firm or corporation and to use the name "Oppenheimer" in connection with
other investment companies for which it may act as investment adviser or general
distributor. If the Manager shall no longer act as investment adviser to the
Fund, the Manager may withdraw the right of the Funds to use the name
"Oppenheimer" as part of its name.


      |X| Advisory Agreement Approvals - OSM - Mercury Advisors S&P 500 Index
Fund and OSM - Mercury Advisors Focus Growth Fund. The Trust and each Fund
commenced the public sale of its shares in February of 2001. As explained in the
Prospectus and in other parts of this Statement of Additional Information,
investment advisory and portfolio management services for the OSM - Mercury
Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth Fund are
provided by the Advisor and the investment advisory fees for those services are
paid by each Master Fund to the Advisor. The OSM Mercury Advisers S&P 500 Index
Fund and OSM - Mercury Advisors Focus Growth Fund do not pay an investment
advisory fee other than its proportionate share of the amounts paid by the
Master Fund to the Advisor. The investment advisory agreements for these two
Funds are approved by the Board of Trustees of the respective Master Fund.

      |X| Annual Approval of Investment Advisory Agreement - OSM - QM Active
Balanced Fund, OSM - Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund
and OSM - Gartmore Millennium Growth Fund II. Each year, the Board of Trustees,
including a majority of the Independent Trustees, is required to approve the
renewal of the investment advisory agreement. The Investment Company Act
requires that the Board request and evaluate and the Manager provide such
information as may be reasonably necessary to evaluate the terms of the
investment advisory agreement. The Board employs an independent consultant to
prepare a report that provides such information as the Board requests for this
purpose.

      The Board also receives information about the 12b-1 distribution fees each
Fund pays. These distribution fees are reviewed and approved at a different time
of the year.

      The Board reviewed the foregoing information in arriving at its decision
to renew the investment advisory agreements. Among other factors, the Board
considered: o The nature, cost, and
         quality of the
         services provided to
         the Fund and its
         shareholders;
o     The profitability of the
         Fund to the Manager;
o     The investment
         performance of the
         Fund in comparison to
         regular market indices
o     Economies of scale that
         may be available to
         the Fund from the
         Manager;
o     Fees paid by other
         mutual funds for
         similar services;
o     The value and quality of
         any other benefits or
         services received by
         the Fund from its
         relationship with the
         Manager, and
o     The direct and indirect
         benefits the Manager
         received from its
         relationship with the
         Fund. These included
         services provided by
         the Distributor and
         the Transfer Agent,
         and brokerage and
         soft dollar
         arrangements
         permissible under
         Section 28(e) of the
         Securities Exchange
         Act.

      The Board considered that the Manager must be able to pay and retain high
quality personnel at competitive rates to provide services to the Funds. The
Board also considered that maintaining the financial viability of the Manager is
important so that the Manager will be able to continue to provide quality
services to the Funds and its shareholders in adverse times. The Board also
considered the investment performance of other mutual funds advised by the
Manager. The Board is aware that there are alternatives to the use of the
Manager.

      These matters were also considered by the Independent Trustees, meeting
separately from the full Board with experienced Counsel to the Independent
Trustees who assisted the Board in its deliberations. The Counsel to the
Independent Trustees is independent of the Manager within the meaning and intent
of the SEC Rules regarding the independence of counsel.

      After careful deliberation, the Board of concluded that it was in the best
interest of shareholders to continue the investment advisory agreement for
another year. In arriving at a decision, the Board did not single out any one
factor or group of factors as being more important than other factors, but
considered all factors together. The Board judged the terms and conditions of
the investment advisory agreement, including the investment advisory fee, in
light of all of the surrounding circumstances.

      |X| The Administration and Subadministration Agreements - OSM - Mercury
Advisors S&P 500 Index Fund and OSM - Mercury Advisors Focus Growth Fund. The
Trust, on behalf of the OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Mercury Advisors Focus Growth Fund, has entered into an Administration Agreement
with the Manager. The Agreement states that the Manager, at its own expense,
shall provide assistance in the supervision of all administrative and clerical
personnel as shall be required to provide effective corporate administration for
the Trust, including the compilation and maintenance of such records with
respect to the Trust's operations as may be reasonably required; the preparation
and filing of such reports as shall be required by the Securities and Exchange
Commission; composition of periodic reports with respect to its operation of
each Fund for the shareholders of the Fund; composition of proxy materials for
meetings of the Fund's shareholders and the composition of such registration
statements as may be required by federal securities laws and preparation of
required filings in each state for continuous public sale of the Fund; provide
the Trust and the Fund with adequate office space, facilities and equipment;
compensate all officers of the Trust and all Trustees of the Trust who are
affiliated persons of the Manager; and compensate any Subadministrator that the
Manager might retain.


      The Trust assumes and pays or causes to be paid all other expenses of the
Trust, on behalf of the OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Mercury Advisors Focus Growth Fund under the Administration Agreement,
including, without limitation: (i) interest and taxes; (ii) insurance premiums
for fidelity and other coverage requisite to its operations; (iii) compensation
and expenses of its trustees other than those associated or affiliated with the
Manager; (iv) legal and audit expenses; (v) custodian and transfer agent fees
and expenses; (vi) expenses incident to the redemption of its shares; (vii)
expenses incident to the issuance of its shares against payment therefor by or
on behalf of the subscribers thereto; (viii) fees and expenses, other than as
described above, incident to the registration under federal and state securities
laws of shares of each Fund for public sale; (ix) expenses of printing and
mailing reports, prospectuses, notices and proxy materials to shareholders of
each Fund; (x) except as noted above, all other expenses incidental to holding
meetings of the Funds' shareholders; and (xi) such extraordinary non-recurring
expenses as may arise, including litigation, affecting a Fund and any legal
obligation which the Trust may have on behalf of a Fund to indemnify its
officers and trustees with respect thereto.

      The Administration Agreement states that in the absence of willful
misfeasance, bad faith or gross negligence in the performance of its duties, or
reckless disregard of its obligations and duties under the Administration
Agreement, the Manager shall not be liable for any loss resulting from any error
of judgement or mistake of law or for any loss arising out of any act or
omission in the management and administration of the Trust and any Fund.

       Each Fund pays the Manager an annual Administration fee of 0.50% of
average daily net assets. That fee is included in the "Annual Fund Operating
Expenses" table in the Prospectus under "Other Expenses." The Manager has
entered into a Subadministration Agreement with FAM whereby FAM will maintain
records of share purchases of the applicable Master Fund by each feeder fund,
maintain tax records relating to the Master Funds, maintaining, preparing or
providing records relating to the operation of the Master Funds that the Manager
may reasonably request in connection with reports to be made to the Board of
Trustees of the Trust, periodic information reporting regarding the Master Fund
to the Manager as the Manager may reasonably require in order to provide
information relating to the performance or holdings of the Mercury Advisors S&P
500 Index Fund or Mercury Advisors Focus Growth Fund, as applicable, fund to
shareholders of such fund, and preparation of reports relating to the Master
Fund that the Manager may reasonably request be made to third-party reporting
services.


       In consideration for providing these services, the Manager pays FAM an
annual subadministration fee of 0.045% of average daily net assets of the S&P
500 Master Fund and 0.0% of the average daily net assets of the Focus Master
Fund.

      The Subadvisory Agreement - OSM - QM Active Balanced Fund, OSM -
Jennison Growth Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore
Millennium Growth Fund II. Under the Subadvisory Agreement between the Manager
and each Subadviser, the Subadviser shall regularly provide investment advice
with respect to the applicable Fund and invest and reinvest cash, securities and
the property comprising the assets of the Fund. Under the Subadvisory Agreement,
the Subadviser agrees to provide reasonable assistance in the distribution and
marketing of the Fund.


      Under the subadvisory agreement, the Manager pays the Subadviser an annual
fee in monthly installments, based on the average daily net assets of the Fund.
The fee paid to the Subadviser under the subadvisory agreement is paid by the
Manager, not by the Funds. The subadvisory fee paid by the Manager to each
Subadviser is as follows:

                                                      Subadvisory Fee
Fund                          Subadviser              as % of average net assets

OSM - Jennison Growth Fund    Jennison Associates LLC 0.45% of the first $300
                                                      million of average  annual
                                                      net assets of the
                                                      Fund, and 0.40% of average
                                                      annual net assets in
                                                      excess of $300 million.

OSM - QM Active              Prudential               0.45% of  the  first $300
Balanced Fund                Investment               million of average  annual
                                                      net assets of the Fund,
                                                      and 0.40% of average
                                                      annual net assets in
                                                      excess  of  $300 million.

OSM - Salomon Brothers      Salomon Brothers Asset     0.60%  of  the  first
All Cap Fund                 Management Inc.           $100 million of
                                                       average  annual  net
                                                       assets of the Fund, and
                                                       0.50% of average annual
                                                       net assets  in  excess
                                                       of $100 million.

OSM - Gartmore Millennium   Gartmore Mutual            0.70% of the first $400
Growth Fund II              Fund Capital Trust         million of average annual
                                                       net assets of the Fund.
                                                       0.60% of the next $400
                                                       million, and 0.50% of
                                                       average  annual  net
                                                       assets in excess of
                                                       $800 million.

      The Subadvisory Agreement states that in the absence of willful
misfeasance, bad faith, negligence or reckless disregard of its duties or
obligations, the Subadviser shall not be liable for any error of judgement or
mistake of law and shall not be subject to any expenses or liability to the
Manager, the Trust or the Fund or any of the Fund's shareholders in connection
with rendering services under the Subadvisory Agreement.

Brokerage Policies of the Funds

Transactions in Portfolio
Securities - OSM - Mercury
Advisors S&P 500 Index Fund and
Mercury Advisors Focus Growth
Fund

      Because each Fund will invest exclusively in beneficial interests in a
Master Fund, it is expected that all transactions in portfolio securities will
be entered into by the Master Fund. Subject to policies established by the Board
of Trustees of the Master Fund, the Adviser is primarily responsible for the
execution of the Master Fund's portfolio transactions and the allocation of
brokerage. The Master Fund does not execute transactions through any particular
broker or dealer, but seeks to obtain the best net results for the Master Fund,
taking into account such factors as price (including the applicable brokerage
commissions or dealer spread), size of order, difficulty of execution and
operational facilities of the firm and the firm's risk and skill in positioning
blocks of securities. While the Adviser generally seeks reasonable trade
execution costs, the Master Fund does not necessarily pay the lowest spread or
commission available. Subject to applicable legal requirements, the Adviser may
select a broker based partly upon brokerage or research services provided to the
Adviser and its clients, including the Master Fund. In return for such services
the Adviser may pay a higher commission that other brokers would charge if the
Adviser determines in good faith that the commission is reasonable in relation
to the services provided.

      Section 28(e) of the Securities Exchange Act of 1934 ("Section 28(e)")
permits an investment adviser, such as the Adviser, under certain circumstances,
to cause an account to pay a broker a commission for effecting a transaction
that exceeds the amount of commission another broker would have charged for
effecting the same transaction in recognition of the value of brokerage and
research services provided by that broker. Brokerage and research services
include (1) furnishing advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the available of securities
or purchasers or sellers of securities; (2) furnishing analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and the performance of accounts; and (3) effecting
securities transactions and performing functions incidental to securities
transactions (such as clearance, settlement, and custody). The Adviser believes
that access to independent investment research is beneficial to its investment
decision-making processes and, therefore, to the Master Fund and the Fund.

      To the extent research services may be a factor in selecting brokers, such
services may be in written form or through direct contact with individuals and
may include information as to particular companies and securities as well as
market, economic, or institutional areas and information that assists in the
valuation of investments. Examples of research-oriented services for which the
Adviser might use Master Fund commissions include research reports and other
information on the economy, industries, groups of securities, individual
companies, statistical information, political developments, technical market
action, pricing and appraisal services, credit analysis, risk measurement
analysis, performance and other analysis. Except as noted immediately below,
research services furnished by brokers may be used in servicing some or all
client accounts and not all services may be used in connection with the account
that paid commissions to the broker providing such services. In some cases,
research information received from brokers by mutual fund management personnel
or personnel principally responsible for the Advisor's individually managed
portfolios is not necessarily shared by and between such personnel. Any
investment advisory or other fees paid by the Master Fund to the Adviser are not
reduced as a result of the Adviser's receipt of research services.

      In some cases the Adviser may receive a service from a broker that has
both a "research" and a "non-research" use. When this occurs the Adviser makes a
good faith allocation under all the circumstances between the research and
non-research uses of the service. The percentage of the service that is used for
research purposes may be paid for with client commissions, while the Adviser
will use its own funds to pay for the percentage of the service that is used for
non-research purposes. In making this good faith allocation, the Adviser faces a
potential conflict of interest, but the Adviser believes that its allocation
procedures are reasonably designed to ensure that it appropriately allocates the
anticipated use of such services to their research and non-research uses.

      From time to time, the Master Fund may purchase new issues of securities
in a fixed price offering. In these situations, the broker may be a member of
the selling group that will, in addition to selling securities, provide the
Adviser with research services. The NASD has adopted rules expressly permitting
these types of arrangements under certain circumstances. Generally, the broker
will provide research "credits" in these situations at a rate that is higher
than that which is available for typical secondary market transactions. These
arrangements may not fall within the safe harbor of Section 28(e).

      In addition, consistent with the Conduct Rules of the NASD and policies
established by the Boards of Trustees of the Master Funds and subject to best
execution, the Adviser may consider sales of shares of feeder funds as a factor
in the selection of brokers and dealers to execute portfolio transactions for
the Master Fund, however, whether or not a particular broker or dealer sells
shares of a feeder fund neither fund neither qualifies nor disqualifies such
broker or dealer to execute transactions for the Master Fund.

      The Master Fund anticipates that its brokerage transactions involving
securities of issuers domiciled in countries other than the United States
generally will be conducted primarily on the principal stock exchanges of such
countries. Brokerage commissions and other transaction costs on foreign stock
exchange transactions generally are higher than in the United States, although
the Master Fund will endeavor to achieve the best net results in effecting its
portfolio transactions. There generally is less governmental supervision and
regulation of foreign stock exchanges and brokers than in the United States.

      Foreign equity securities may be held by the Master Fund in the form of
Depository Receipts, or other securities convertible into foreign equity
securities. Depository Receipts may be listed on stock exchanges or traded in
over-the-counter markets in the United States or Europe, as the case may be.
American Depository Receipts, like other securities traded in the United States,
will be subject to negotiated commission rates. Because the shares of each
feeder fund are redeemable on a daily basis in U.S. dollars, the Master Fund
intends to manage its portfolio so as to give reasonable assurance that it will
be able to obtain U.S. dollars to the extent necessary to meet anticipated
redemptions. Under present conditions, it is not believed that these
considerations will have significant effect on the Master Fund's portfolio
strategies.

      Information about the brokerage commissions paid by the Master Fund of
OSM- Mercury Advisors Focus Growth Fund including commissions paid to Merrill
Lynch, is set forth in the following table:

                                 Aggregate Brokerage      Commissions Paid
                                 Commissions Paid         To Merrill Lynch

Fiscal period ended November
30, 2001                          $1,695,995              $75,819

Fiscal year ended November 30,
2002                              $2,421,919             $161,190

      For the fiscal period ended November 30, 2002 the brokerage commissions
paid to Merrill Lynch represented 6.66% of the aggregate brokerage commissions
paid by the Master Fund and involved 6.92% of the Master Fund's dollar amount of
transactions involving payment of commissions.


      Information about the brokerage commissions paid by the Master Fund of
OSM- Mercury Advisors S&P 500 Index Fund including commissions paid to Merrill
Lynch, is set forth in the following table:

                                Aggregate Brokerage      Commissions Paid
                                Commissions Paid         to Merrill Lynch

Fiscal period ended December
31, 2001                         $90,754                   $0

Fiscal year ended December 31,
2002                             $165,899                  $862

      For the fiscal period ended December 31, 2002 the brokerage commissions
paid to Merrill Lynch represented 0.52% of the aggregate brokerage commissions
paid by the Trust and involved 0.29% of the Trust's dollar amount of
transactions involving payment of commissions.

      Because of the affiliation of Merrill Lynch with Mercury Advisors, the
Master Funds are prohibited from engaging in certain transactions involving
Merrill Lynch, or its affiliates except for brokerage transactions permitted
under the Investment Company Act involving only usual and customary commissions
or transactions pursuant to an exemptive order under the Investment Company Act.
Each Master Fund may invest in certain securities traded in the OTC market and
intends to deal directly with the dealers who make a market in securities
involved, except in those circumstances in which better prices and execution are
available elsewhere. Under the Investment Company Act, persons affiliated with
the Master Fund and persons who are affiliated with such affiliated persons are
prohibited from dealing with the Master Fund as principal in the purchase and
sale of securities unless a permissive order allowing such transactions is
obtained from the Commission. Since transactions in the OTC market usually
involve transactions with the dealers acting as principal for their own
accounts, the Master Fund will not deal with affiliated persons, including
Merrill Lynch and its affiliates, in connection with such transactions. However,
an affiliated person of the Master Fund may serve as its broker in OTC
transactions conducted on an agency basis provided that, among other things, the
fee or commission received by such affiliated broker is reasonable and fair
compared to the fee or commission received by non-affiliated brokers in
connection with comparable transactions. In addition, the Master Fund may not
purchase securities during the existence of any underwriting syndicate for such
securities of which Merrill Lynch is a member or in a private placement in which
Merrill Lynch serves as placement agent except pursuant to procedures approved
by the Board of Trustees of the Master Fund that either comply with rules
adopted by the Commission or with interpretations of the Commission staff. The
Master Fund(s) have received an exemptive order from the Commission permitting
them to lend portfolio securities to Merrill Lynch or its affiliates. Pursuant
to that order, the Master Funds also have retained an affiliated entity of the
Adviser as the securities lending agent for a fee, including a fee based on a
share of the returns on investment of cash collateral. For the fiscal period
ended November 30, 2001 and for the fiscal year ended November 30, 2002, that
affiliated entity received $1,260 and $44,826, respectively in securities
lending agent fees from the respective Master Fund. That entity may, on behalf
of a Master Fund, invest cash collateral received by that Master Fund for such
loans, among other things, in a private investment company managed by that
entity or in registered money market funds advised by the Adviser or its
affiliates.

      Section 11(a) of the Exchange Act generally prohibits members of the U.S.
national securities exchanges from executing exchange transactions for their
affiliates and institutional accounts that they manage unless the member (i) has
obtained prior express authorization from the account to effect such
transactions, (ii) at least annually furnishes the account with a statement
setting forth the aggregate compensation received by the member in effecting
such transactions, and (iii) complies with any rules the Commission has
prescribed with respect to the requirements of clauses (i) and (ii). To the
extent Section 11(a) would apply to Merrill Lynch acting as a broker for the
Master Fund in any of its portfolio transactions executed on any such securities
exchange of which it is a member, appropriate consents have been obtained from
the Master Fund and annual statements as to aggregate compensation will be
provided to the Master Fund. Securities may be held by, or be appropriate
investments for, the Master Fund as well as other funds or investment advisory
clients of the Adviser or its affiliates.

      The Board of Trustees of each Master Fund has considered the possibility
of seeking to recapture for the benefit of the Master Fund brokerage commissions
and other expenses of possible portfolio transactions by conducting portfolio
transactions through affiliated entities. For example, brokerage commissions
received by affiliated brokers could be offset against the advisory fee paid by
the Master Fund to the Adviser. After considering all factors deemed relevant,
the Board of Trustees of the Master Fund made a determination not to seek such
recapture. The Board of Trustees of the Master Fund will reconsider this matter
from time to time.

      Because of different objectives or other factors, a particular security
may be bought for one or more clients of the Adviser or its affiliates when one
or more clients of the Adviser or its affiliates are selling the same security.
If purchases or sales of securities arise for consideration at or about the same
time that would involve a Master Fund or other clients or funds for which the
Adviser or an affiliate act as investment adviser, transactions in such
securities will be made, insofar as feasible, for the respective funds and
clients in a manner deemed equitable to all. To the extent that transactions on
behalf of more than one client of the Adviser or its affiliates during the same
period may increase the demand for securities being purchased or the supply of
securities being sold, there may be an adverse effect on price.

Brokerage Provisions of the Investment Advisory Agreements and the Subadvisory
Agreements - OSM - Jennison Growth Fund, OSM - QM Active Balanced Fund, OSM -
Salomon Brothers All Cap Fund and OSM - Gartmore Millennium Growth Fund II.


    One of the duties of the Subadviser under the Subadvisory Agreement is to
arrange the portfolio transactions for the Funds. Each Fund's investment
advisory agreement with the Manager and the Subadvisory Agreement contain
provisions relating to the selection of broker-dealers to effect each Fund's
portfolio transactions. The Manager and the Subadviser are authorized to select
broker-dealers, including "affiliated" brokers, as that term is defined in the
Investment Company Act. They may employ broker-dealers that the Manager or the
Subadviser thinks, in its best judgment based on all relevant factors, will
implement the policy of the Funds to obtain, at reasonable expense, the "best
execution" of each of the Fund's portfolio transactions. "Best execution" means
prompt and reliable execution at the most favorable price obtainable.

    The Manager and the Subadviser need not seek competitive commission bidding.
However, they are expected to be aware of the current rates of eligible brokers
and to minimize the commissions paid to the extent consistent with the interests
and policies of the Funds as established by their Board of Trustees.

    The Manager and the Subadviser may select brokers (other than affiliates)
that provide brokerage and/or research services for the Funds and/or the other
accounts over which the Manager, the Subadviser or their respective affiliates
have investment discretion. The commissions paid to such brokers may be higher
than another qualified broker would charge, if the Manager or Subadviser, as
applicable, makes a good faith determination that the commission is fair and
reasonable in relation to the services provided. Subject to those
considerations, as a factor in selecting brokers for each of the Fund's
portfolio transactions, the Manager and the Subadviser may also consider sales
of shares of each of the Funds and other investment companies for which the
Manager or an affiliate serves as investment adviser.

    The Subadvisory Agreement permits the Subadviser to enter into "soft-dollar"
arrangements through the agency of third parties to obtain services for the
Funds. Pursuant to these arrangements, the Subadviser will undertake to place
brokerage business with broker-dealers who pay third parties that provide
services. Any such "soft-dollar" arrangements will be made in compliance with
applicable law.

Brokerage Practices. Brokerage for the Funds is allocated subject to the
provisions of the Investment Advisory Agreement and the Subadvisory Agreement
and the procedures and rules described above. Generally, the Subadviser's
portfolio traders allocate brokerage based upon recommendations from the Fund's
portfolio manager. In certain instances, portfolio managers may directly place
trades and allocate brokerage. In either case, the Subadviser's executive
officers supervise the allocation of brokerage.

    Transactions in securities other than those for which an exchange is the
primary market are generally done with principals or market makers. In
transactions on foreign exchanges, the Funds may be required to pay fixed
brokerage commissions and therefore would not have the benefit of negotiated
commissions available in U.S. markets. Brokerage commissions are paid primarily
for transactions in listed securities or for certain fixed-income agency
transactions in the secondary market. Otherwise brokerage commissions are paid
only if it appears likely that a better price or execution can be obtained by
doing so.

     Each Subadviser serves as investment manager to a number of clients,
including other investment companies, and may in the future act as investment
manager or advisor to others. It is the practice of the Subadviser to allocate
purchase or sale transactions among the Fund it manages and other clients whose
assets it manages in a manner it deems equitable. In making those allocations,
the Subadviser considers several main factors, including the respective
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held and the opinions of the persons
responsible for managing the portfolios of the Fund and each other client's
accounts.

     When orders to purchase or sell the same security on identical terms are
placed by more than one of the funds and/or other advisory accounts managed by
the Subadviser or its affiliates, the transactions are generally executed as
received, although a fund or advisory account that does not direct trades to a
specific broker (these are called "free trades") usually will have its order
executed first. Orders placed by accounts that direct trades to a specific broker
will generally be executed after the free trades. All orders placed on behalf of
a Fund are considered free trades. However, having an order placed first in the
market does not necessarily guarantee the most favorable price. Purchases are
combined where possible for the purpose of negotiating brokerage commissions. In
some cases that practice might have a detrimental effect on the price or volume
of the security in a particular transaction for the Fund.

    Most purchases of debt obligations are principal transactions at net prices.
Instead of using a broker for those transactions, a Fund will normally deal
directly with the selling or purchasing principal or market maker unless the
Subadviser determines that a better price or execution can be obtained by using
the services of a broker. Purchases of portfolio securities from underwriters
include a commission or concession paid by the issuer to the underwriter.
Purchases from dealers include a spread between the bid and asked prices. The
Funds seek to obtain prompt execution of these orders at the most favorable net
price.

    The Investment Advisory Agreement and the Subadvisory Agreement permit the
Manager and the Subadviser to allocate brokerage for research services. The
research services provided by a particular broker may be useful only to one or
more of the advisory accounts of the Subadviser and its affiliates. The
investment research received for the commissions of those other accounts may be
useful both to the respective Fund and one or more of the Subadviser's other
accounts. Investment research may be supplied to the Subadviser by a third party
at the instance of a broker through which trades are placed.

    Investment research services include information and analysis on particular
companies and industries as well as market or economic trends and portfolio
strategy, market quotations for portfolio evaluations, information systems,
computer hardware and similar products and services. If a research service also
assists the Subadviser in a non-research capacity (such as bookkeeping or other
administrative functions), then only the percentage or component that provides
assistance to the Subadviser in the investment decision-making process may be
paid in commission dollars.

    The research services provided by brokers broadens the scope and supplements
the research activities of the Subadviser. That research provides additional
views and comparisons for consideration, and helps the Subadviser to obtain
market information for the valuation of securities that are either held in the
Fund's portfolio or are being considered for purchase. The Subadviser provides
information to the Manager and the Board about the commissions paid to brokers
furnishing such services, together with the Subadviser's representation that the
amount of such commissions was reasonably related to the value or benefit of
such services.

  Total Brokerage Commissions
      Paid by the Funds1
- -------------------------------------------------------------------------------
- --------------------------------------------------------------

                                Fiscal Period                Fiscal Year Ended
Fund                            Ended 11/30/01                11/30/022

- --------------------------------------------------------------
- --------------------------------------------------------------

QM Active Balanced Fund             $1,475                      $5,454

- --------------------------------------------------------------
- --------------------------------------------------------------

Jennison Growth Fund                $5,832                      $22,425

- --------------------------------------------------------------
- --------------------------------------------------------------

Salomon Brothers All Cap Fund      $19,495                      $356,961

- --------------------------------------------------------------
- --------------------------------------------------------------

Gartmore Millennium Growth         $11,810                      $57,264
Fund II

- --------------------------------------------------------------

1. Amounts do not include spreads or commissions on principal transactions on a
net trade basis. 2. In the fiscal year ended 11/30/02, the amount of
transactions directed to brokers for research services and the amount of the
commissions paid to broker-dealers for those services were as follows:

- ----------------------------------------------------
                               Amount of Amount of
Fund                          TransactionCommissions
- ----------------------------------------------------
- ----------------------------------------------------
QM Active Balanced Fund           $0         $0
- ----------------------------------------------------
- ----------------------------------------------------

Jennison Growth Fund           $120,448     $249

- ----------------------------------------------------
- ----------------------------------------------------

Salomon Brothers All Cap Fund  $699,824    $1,594

- ----------------------------------------------------
- ----------------------------------------------------

Gartmore Millennium Growth     $141,908     $293
Fund II

- ----------------------------------------------------


Distribution and Service Plans

The Distributor.  Under its General  Distributor's  Agreement with each of the
Funds, the Distributor  acts as  each  Fund's  principal  underwriter  in the
continuous public offering of each Fund's different  classes of shares.  The
Distributor  bears the expenses normally attributable to  sales,  including
advertising  and  the  cost  of  printing  and  mailing prospectuses, other than
those furnished to existing  shareholders.  The Distributor is not obligated to
sell a specific number of shares. Expenses normally attributable to sales are
borne by the Distributor.

   The sales charges and concessions paid to, or retained by, the Distributor
from the sale of shares during the Funds' most recent fiscal year, and the
contingent deferred sales charges retained by the Distributor on the redemption
of shares for the most recent fiscal year are shown in the tables below.

- --------------------------------------------------------------

                                      Aggregate   Class A
                               Fiscal Front-End   Front-End
                               Year   Sales       Sales
                               Ended  Charges     Charges

Fund                           11/30  on Class A  Retained by
                                      Shares      Distributor*
- --------------------------------------------------------------
- --------------------------------------------------------------

Mercury Advisors S&P 500       2002*  $71,413     $23,220
Index Fund

- --------------------------------------------------------------
- --------------------------------------------------------------

Mercury Advisors Focus Growth  2002   $7,624      $4,188
Fund

- --------------------------------------------------------------
- --------------------------------------------------------------

QM Active Balanced Fund        2002   $6,890      $1,094

- --------------------------------------------------------------
- --------------------------------------------------------------

Jennison Growth Fund           2002   $34,373     $10,966

- --------------------------------------------------------------
- --------------------------------------------------------------

Salomon Brothers All Cap Fund  2002   $62,590     $21,424

- --------------------------------------------------------------
- --------------------------------------------------------------

Gartmore Millennium Growth     2002   $2,876      $1,899
Fund II

- --------------------------------------------------------------

Includes amounts retained by a broker-dealer that is an affiliate or a parent of
the distributor. *For fiscal year ended 12/31.


- ----------------------------------------------------------------------------
                               ConcessionsConcessionConcessions Concessions

                               Fiscal on Class A on Class  on Class C  on Class
                               Year   Shares     B Shares  Shares      N
                               Ended  Advanced   Advance   Advance by  Shares

Fund                           11/30  by         by        Distributor1Advance
                                      DistributorDistributor1          by
                                                                   Distributor1
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Mercury Advisors S&P 500   2002*  $11,364    $130,765  $48,663    $130,233
Index Fund

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Mercury Advisors Focus Growth  2002   $93        $9,049    $5,678      $1,055
Fund

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

QM Active Balanced Fund        2002   $121       $14,392   $3,011      $2,750

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Jennison Growth Fund           2002   $1,016     $38,831   $15,462     $12,938

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Salomon Brothers All Cap Fund  2002   $7,615     $91,244   $48,537     $49,699

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Gartmore Millennium Growth     2002   $7         $4,524    $926        $279
Fund II

- ---------------------------------------------------------------------------------

*For fiscal year ended 12/31.

1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.

- ---------------------------------------------------------------------------------
                                      Class A    Class B   Class C     Class N
                                      Contingent ContingentContingent  Contingent
                                      Deferred   Deferred  Deferred    Deferred
                               Fiscal Sales      Sales     Sales       Sales
                               Year   Charges    Charges   Charges     Charges
                               Ended  Retained   Retained  Retained by Retained
Fund                           11/30  by         by        Distributor by
                                      DistributorDistributor           Distributor
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Mercury Advisors S&P 500   2002*  $0         $4,358    $2,608      $27,006
Index Fund

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Mercury Advisors Focus Growth  2002   $0         $2,930    $118        $3
Fund

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

QM Active Balanced Fund        2002   $0         $2,303    $168        $27

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Jennison Growth Fund           2002   $0         $3,447    $546        $530

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Salomon Brothers All Cap Fund  2002   $0         $8,641    $2,017      $3,541

- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------

Gartmore Millennium Growth     2002   $0         $2,142    $8          $4
Fund II

- ---------------------------------------------------------------------------------

*For fiscal year ended 12/31.


Distribution and Service Plans. Each Fund has adopted a Service Plan for Class A
shares and Distribution and Service Plans for Class B, Class C and Class N
shares under Rule 12b-1 of the Investment Company Act. Under those plans a Fund
pays the Distributor for all or a portion of its costs incurred in connection
with the distribution and/or servicing of the shares of the particular class.

      Each plan has been approved by a vote of the Board of Trustees, including
a majority of the Independent Trustees1, cast in person at a meeting called for
the purpose of voting on that plan. The shareholder votes for the plans were
cast by the Manager as the sole initial holder of the shares of each class of
shares of each Fund.

      Under the plans, OppenheimerFunds, Inc. and the Distributor may make
payments to affiliates and in their sole discretion, from time to time, may use
their own resources (at no direct cost to the Fund) to make payments to brokers,
dealers or other financial institutions for distribution and administrative
services they perform. The Manager may use its profits from the advisory fee it
receives from each Fund. In their sole discretion, the Distributor and the
Manager may increase or decrease the amount of payments they make from their own
resources to plan recipients.

      Unless a plan is terminated as described below, the plan continues in
effect from year to year but only if each Fund's Board of Trustees and its
Independent Trustees specifically vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting called for the purpose of
voting on continuing the plan. A plan may be terminated at any time by the vote
of a majority of the Independent Trustees or by the vote of the holders of a
"majority" (as defined in the Investment Company Act) of the outstanding shares
of that class.


      The Board of Trustees and the Independent Trustees must approve all
material amendments to a plan. An amendment to increase materially the amount of
payments to be made under a plan must be approved by shareholders of the class
affected by the amendment. Because Class B shares of each of the Funds
automatically convert into Class A shares 72 months after purchase, each Fund
must obtain the approval of both Class A and Class B shareholders for a proposed
material amendment to the Class A plan that would materially increase payments
under the plan. That approval must be by a "majority" (as defined in the
Investment Company Act) of the shares of each Class, voting separately by class.


      While the plans are in effect, the Treasurer of each Fund shall provide
separate written reports on the plans to the Board of Trustees at least
quarterly for its review. The Reports shall detail the amount of all payments
made under a plan and the purpose for which the payments were made. Those
reports are subject to the review and approval of the Independent Trustees.

      Each plan states that while it is in effect, the selection and nomination
of those Trustees of each Fund who are not "interested persons" of a Fund is
committed to the discretion of the Independent Trustees. This does not prevent
the involvement of others in the selection and nomination process as long as the
final decision as to selection or nomination is approved by a majority of the
Independent Trustees.

      Under the plan for a class, no payment will be made to any recipient in
any quarter in which the aggregate net asset value of all Fund shares of that
class held by the recipient for itself and its customers does not exceed a
minimum amount, if any, that may be set from time to time by a majority of the
Independent Trustees. The Board of Trustees has set no minimum amount of assets
to qualify for payments under the plans.


      |X| Class A Service Plan Fees. Under the Class A service plan, the
Distributor currently uses the fees it receives from the Fund to pay brokers,
dealers and other financial institutions (they are referred to as "recipients")
for personal services and account maintenance services they provide for their
customers who hold Class A shares. The services include, among others, answering
customer inquiries about the Funds, assisting in establishing and maintaining
accounts in the Funds, making the Funds' investment plans available and
providing other services at the request of the Funds or the Distributor. While
the plan permits the Board to authorize payments to the Distributor to reimburse
itself for services under the plan, the Board has not yet done so except in the
case of the special arrangement described below. The Distributor makes payments
to plan recipients quarterly at an annual rate not to exceed 0.25% of the
average annual net assets consisting of Class A shares held in the accounts of
the recipients or their customers. With respect to purchases of Class A shares
subject to a contingent deferred sales charge by certain retirement plans that
purchased such shares prior to March 1, 2001 ("grandfathered retirement
accounts"), the Distributor currently intends to pay the service fee to
Recipients in advance for the first year after the shares are purchased. After
the first year shares are outstanding, the Distributor makes service fee
payments to Recipients quarterly on those shares. The advance payment is based
on the net asset value of shares sold. Shares purchased by exchange do not
qualify for the advance service fee payment. If Class A shares purchased by
grandfathered retirement accounts are redeemed during the first year after their
purchase, the Recipient of the service fees on those shares will be obligated to
repay the Distributor a pro rata portion of the advance payment of the service
fee made on those shares.

      During the first year the shares are sold, the Distributor retains the
service fee to reimburse itself for the cost of distributing the shares. For the
fiscal year ended November 30, 2002 (December 31, 2002 for the Mercury Advisors
S&P 500 Index Fund), payments under the Class A Plan paid by the Distributor to
recipients and to an affiliate of the Distributor were as follows:


- --------------------------------------------------------------------------

                                  Payments   Retained by         Payments
Fund                              to         Distributor        to an Affiliate
                                 Recipients

- --------------------------------------------------------------------------
- --------------------------------------------------------------------------

Mercury Advisors S&P 500 Index        $12,489       $191         $540
Fund

- --------------------------------------------------------------------------
- --------------------------------------------------------------------------

Mercury Advisors Focus Growth Fund    $3,383        $0           $282

- --------------------------------------------------------------------------
- --------------------------------------------------------------------------

QM Active Balanced Fund               $281          $0           $60

- --------------------------------------------------------------------------
- --------------------------------------------------------------------------

Jennison Growth Fund                  $2,332        $2           $349

- --------------------------------------------------------------------------
- --------------------------------------------------------------------------

Salomon Brothers All Cap Fund         $12,376       $10          $814

- --------------------------------------------------------------------------
- --------------------------------------------------------------------------

Gartmore Millennium Growth Fund II    $593          $0           $167

- --------------------------------------------------------------------------

      Any unreimbursed expenses the Distributor incurs with respect to Class A
shares in any fiscal year cannot be recovered in subsequent years. The
Distributor may not use payments received under the Class A Plan to pay any of
its interest expenses, carrying charges, or other financial costs, or allocation
of overhead.

      |X| Class B, Class C and Class N Service and Distribution Plan Fees. Under
each plan, service fees and distribution fees are computed on the average of the
net asset value of shares in the respective class, determined as of the close of
each regular business day during the period. The Class B, Class C and Class N
plans provide for the Distributor to be compensated at a flat rate, whether the
Distributor's distribution expenses are more or less than the amounts paid by
the Funds under the plan during the period for which the fee is paid. The types
of services that recipients provide are similar to the services provided under
the Class A service plan, described above.

      The Class B, Class C and Class N Plans permit the Distributor to retain
both the asset-based sales charges and the service fees or to pay recipients the
service fee on a quarterly basis, without payment in advance. However, the
Distributor currently intends to pay the service fee to recipients in advance
for the first year after the shares are purchased. After the first year shares
are outstanding, the Distributor makes service fee payments quarterly on those
shares. The advance payment is based on the net asset value of shares sold.
Shares purchased by exchange do not qualify for the advance service fee payment.
If Class B, Class C or Class N shares are redeemed during the first year after
their purchase, the recipient of the service fees on those shares will be
obligated to repay the Distributor a pro rata portion of the advance payment of
the service fee made on those shares.

      The Distributor retains the asset-based sales charge on Class B and Class
N shares. The Distributor retains the asset-based sales charge on Class C shares
during the first year the shares are outstanding. It pays the asset-based sales
charge as an ongoing concession to the recipient on Class C shares outstanding
for a year or more. If a dealer has a special agreement with the Distributor,
the Distributor will pay the Class B, Class C and/or Class N service fee and the
asset-based sales charge to the dealer quarterly in lieu of paying the sales
concessions and service fee in advance at the time of purchase.

      The asset-based sales charges on Class B, Class C and Class N shares allow
investors to buy shares without a front-end sales charge while allowing the
Distributor to compensate dealers that sell those shares. Each Fund pays the
asset-based sales charges to the Distributor for its services rendered in
distributing Class B, Class C and Class N shares. The payments are made to the
Distributor in recognition that the Distributor:

o     pays sales concessions to authorized brokers and dealers at the time of
         sale and pays service fees as described above,
o        may finance payment of sales concessions and/or the advance of the
         service fee payment to recipients under the plans, or may provide such
         financing from its own resources or from the resources of an affiliate,
o     employs personnel to support distribution of Class B, Class C and Class
         N shares, and
o        bears the costs of sales literature, advertising and prospectuses
         (other than those furnished to current shareholders) and state "blue
         sky" registration fees and certain other distribution expenses.
o        may not be able to adequately compensate dealers that sell Class B,
         Class C and Class N shares without receiving payment under the plans
         and therefore may not be able to offer such Classes for sale absent the
         plans,
o        receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o        may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o        may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor funds
         have plans that pay dealers for rendering distribution services as much
         or more than the amounts currently being paid by the Fund, and
o        may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to obtain
         such services from brokers and dealers, if the plan payments were to be
         discontinued.

   When Class B, Class C or Class N shares are sold without the designation of a
   broker-dealer, the Distributor is automatically designated as the
   broker-dealer of record. In those cases, the Distributor retains the service
   fee and asset-based sales charge paid on Class B, Class C and Class N shares.

      All payments under the Class B, Class C and Class N plans are subject to
the limitations imposed by the Conduct Rules of the National Association of
Securities Dealers, Inc. on payments of asset-based sales charges and service
fees.

- -------------------------------------------------------------------------------------

    Distribution Fees Paid to the Distributor in the Fiscal Year Ended 11/30/02*

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
                                                           Distributor'sDistributor's
                                        Total    Amount    Aggregate    Unreimbursed
                                        Payments Retained  Unreimbursed Expenses as
                                        Under    By        Expenses     %
Fund                         Class Plan Plan     DistributoUnder Plan   of Net
                                                                          Assets
                                                                        of Class
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Mercury Advisors S&P 500     Class B    $29,212  $26,9021  $181,893     4.35%

Index Fund                   Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class C    $35,829  $30,5782  $106,844     2.16%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class N    $49,775  $48,1893  $392,192     3.00%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Mercury Advisors Focus       Class B    $8,635   $6,8844   $60,326      7.65%

Growth Fund                  Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class C    $4,529   $3,156    $81,033      12.31%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class N    $257     $230      $48,561      67.66%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

QM Active Balanced Fund      Class B    $2,536   $2,3345   $40,973      9.00%

                             Plan
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class C    $4,667   $3,858    $26,366      5.06%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class N    $731     $561      $14,271      4.44%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Jennison Growth Fund         Class B    $6,176   $5,5966   $64,956      5.01%

                             Plan
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class C    $15,244  $12,2587  $315,521     14.38%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class N    $5,143   $4,763    $111,848     8.52%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Salomon   Brothers  All  Cap Class B    $34,095  $30,7158  $163,386     3.78%
Fund                         Plan


- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class C    $57,794  $38,4659  $121,309     1.77%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class N    $15,207  $5,77010  $99,503      1.75%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

Gartmore Millennium Growth   Class B    $1,479   $1,33911  $41,203      21.29%
Fund II                      Plan


- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class C    $1,309   $1,025    $41,624      26.67%
                             Plan

- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------

                             Class N    $251     $23612    $5,037       7.40%
                             Plan

- -------------------------------------------------------------------------------------

*For Mercury Advisors S&P 500 Index Fund this information is for the fiscal
year ended 12/31/02.
1.  Includes $49 paid to an affiliate of the Distributor's parent company.
2.:  Includes$130 paid to an affiliate of the Distributor's parent company.
3.  Includes $35 paid to an affiliate of the Distributor's parent company.
4.  Includes $9 paid to an affiliate of the Distributor's parent company.
5.  Includes $4 paid to an affiliate of the Distributor's parent company.
6.  Includes $4 paid to an affiliate of the Distributor's parent company.
7.  Includes $170 paid to an affiliate of the Distributor's parent company.
8.  Includes $208 paid to an affiliate of the Distributor's parent company.
9.  Includes $120 paid to an affiliate of the Distributor's parent company.
10. Includes $1 paid to an affiliate of the Distributor's parent company.
11. Includes $2 paid to an affiliate of the Distributor's parent company.
12. Includes $1 paid to an affiliate of the Distributor's parent company.


Performance of the Funds

Explanation of Performance Terminology. Each Fund uses a variety of terms to
illustrate its investment performance. Those terms include "cumulative total
return," "average annual total return," "average annual total return at net
asset value" and "total return at net asset value." An explanation of how total
returns are calculated is set forth below. You can obtain current performance
information by calling the Funds' Transfer Agent at 1.800.525.7048 or by
visiting the OppenheimerFunds Internet web site at www.oppenheimerfunds.com.

      Each Fund's illustrations of its performance data in advertisements must
comply with rules of the Securities and Exchange Commission. Those rules
describe the types of performance data that may be used and how it is to be
calculated. In general, any advertisement by a Fund of its performance data must
include the average annual total returns for the advertised class of shares of
the Fund. Those returns must be shown for the 1-, 5- and 10-year periods (or the
life of the class, if less) ending as of the most recently ended calendar
quarter prior to the publication of the advertisement (or its submission for
publication).

      Use of standardized performance calculations enables an investor to
compare a Fund's performance to the performance of other funds for the same
periods. However, a number of factors should be considered before using a Fund's
performance information as a basis for comparison with other investments:

      |_| Total returns measure the performance of a hypothetical account in a
Fund over various periods and do not show the performance of each shareholder's
account. Your account's performance will vary from the model performance data if
your dividends are received in cash, or you buy or sell shares during the
period, or you bought your shares at a different time and price than the shares
used in the model.

      |_| A Fund's performance returns do no reflect the effect of taxes on
dividends and capital gains distributions.

      |_| An investment in a Fund is not insured by the FDIC or any other
government agency.

      |_| The principal value of a Fund's shares and total returns are not
guaranteed and normally will fluctuate on a daily basis.

      |_| When an investor's shares are redeemed, they may be worth more or less
than their original cost.

      |_| Total returns for any given past period represent historical
performance information and are not, and should not be considered, a prediction
of future returns.

      The performance of each class of shares is shown separately, because the
performance of each class of shares will usually be different. That is because
of the different kinds of expenses each class bears. The total returns of each
class of shares of a Fund are affected by market conditions, the quality of the
Fund's investments, the maturity of debt investments, the types of investments
the Fund holds, and its operating expenses that are allocated to the particular
class.

      |X| Total Return Information. There are different types of "total returns"
to measure a Fund's performance. Total return is the change in value of a
hypothetical investment in a Fund over a given period, assuming that all
dividends and capital gains distributions are reinvested in additional shares
and that the investment is redeemed at the end of the period. Because of
differences in expenses for each class of shares, the total returns for each
class are separately measured. The cumulative total return measures the change
in value over the entire period (for example, ten (10) years). An average annual
total return shows the average rate of return for each year in a period that
would produce the cumulative total return over the entire period. However,
average annual total returns do not show actual year-by-year performance. A Fund
uses standardized calculations for its total returns as prescribed by the SEC.
The methodology is discussed below.


      In calculating total returns for Class A shares, the current maximum sales
charge of 5.75% (as a percentage of the offering price) is deducted from the
initial investment ("P") (unless the return is shown without sales charge, as
described below). For Class B shares, payment of the applicable contingent
deferred sales charge is applied, depending on the period for which the return
is shown: 5.0% in the first year, 4.0% in the second year, 3.0% in the third and
fourth years, 2.0% in the fifth year, 1.0% in the sixth year and none
thereafter. For Class C shares, the 1% contingent deferred sales charge is
deducted for returns for the 1-year period. For Class N shares, the 1%
contingent deferred sales charge is deducted for returns for the one year
period. Class N total returns may also be calculated for the periods prior to
3/1/01 (the inception of Class N shares), based on the Fund's Class A returns,
adjusted to reflect the higher Class N 12b-1 fees. There is no sales charge on
Class Y shares.


            |_| Average Annual Total Return. The "average annual total return"
of each class is an average annual compounded rate of return for each year in a
specified number of years. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below) held
for a number of years ("n" in the formula) to achieve an Ending Redeemable Value
("ERV" in the formula) of that investment, according to the following formula:

- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------

                1/n
            ERV
            ---  - 1 = Average Annual Total Return
             P



            |_| Cumulative Total Return. The "cumulative total return"
calculation measures the change in value of a hypothetical investment of $1,000
over an entire period of years. Its calculation uses some of the same factors as
average annual total return, but it does not average the rate of return on an
annual basis. Cumulative total return is determined as follows:



           ERV - P
           ------- = Total Return
              P






- ------------------------------------------------------------------------------

      |_| Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A shares
is an average annual compounded rate of return for each year in a specified
number of years, adjusted to show the effect of federal taxes (calculated using
the highest individual marginal federal income tax rates in effect on any
reinvestment date) on any distributions made by the Fund during the specified
period. It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVD" in the formula) of
that investment, after taking into account the effect of taxes on Fund
distributions, but not on the redemption of Fund shares, according to the
following formula:


ATVD        - 1 = Average Annual Total Return (After Taxes on
 /n          Distributions)
  P


      |_| Average Annual Total Return (After Taxes on Distributions and
Redemptions). The "average annual total return (after taxes on distributions and
redemptions)" of Class A shares is an average annual compounded rate of return
for each year in a specified number of years, adjusted to show the effect of
federal taxes (calculated using the highest individual marginal federal income
tax rates in effect on any reinvestment date) on any distributions made by the
Fund during the specified period and the effect of capital gains taxes or
capital loss tax benefits (each calculated using the highest federal individual
capital gains tax rate in effect on the redemption date) resulting from the
redemption of the shares at the end of the period. It is the rate of return
based on the change in value of a hypothetical initial investment of $1,000 ("P"
in the formula below) held for a number of years ("n" in the formula) to achieve
an ending value ("ATVDR" in the formula) of that investment, after taking into
account the effect of taxes on fund distributions and on the redemption of Fund
shares, according to the following formula:


ATVDR       - 1=  Average Annual Total Return (After Taxes on
1/n         Distributions and Redemptions)
  P


            |_| Total Returns at Net Asset Value. From time to time a Fund may
also quote a cumulative or an average annual total return "at net asset value"
(without deducting sales charges) for Class A, Class B, Class C or Class N
shares. There is no sales charge on Class Y shares. Each is based on the
difference in net asset value per share at the beginning and the end of the
period for a hypothetical investment in that class of shares (without
considering front-end or contingent deferred sales charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.

- --------------------------------------------------------------------------------

           The Funds' Total Returns for the Periods Ended 11/30/02*

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                                                  Average Annual Total Returns



            Class       Cumulative
                 of       Total Returns
               Shares   (10 years or Life
                       of Class)
- --------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------

                                          1-Year         5-Year
                                                        (or life-of-class)

- -----------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                         After    Without   After   Without   After    Without
                         Sales     Sales    Sales    Sales    Sales     Sales
                        Charge    Charge    Charge   Charge   Charge   Charge

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Mercury       Class A  -35.95%1  -32.04%1  -27.62%  -23.21%  -21.15%1 -18.61%1
Advisors
S&P 500 Index
Fund

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class B  -35.58%1  -32.90%1  -27.56%  -23.75%  -20.91%1 -19.17%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class C  -33.00%1  -33.00%1  -24.54%  -23.78%  -19.23%1 -19.23%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class N  -29.12%2  -29.12%2  -24.10%  -23.33%  -17.12%2 -17.12%2

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class Y  -31.52%1  -31.52%1  -23.06%  -23.06%  -18.29%1 -18.29%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Mercury       Class A  -76.25%1  -74.80%1  -39.87%  -36.20%  -55.23%1 -53.72%1
Advisors
Focus Growth
Fund

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class B  -76.10%1  -75.10%1  -39.66%  -36.48%  -55.07%1 -54.03%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class C  -75.10%1  -75.10%1  -37.12%  -36.48%  -54.03%1 -54.03%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class N  -69.57%2  -69.57%2  -36.68%  -36.04%  -49.38%2 -49.38%2

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class Y  -74.70%1  -74.70%1  -36.11%  -36.11%  -53.62%1 -53.62%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

QM Active     Class A  -18.58%1  -13.61%1  -13.75%   -8.49%  -10.85%1  -7.85%1
Balanced
Fund

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class B  -18.21%1  -14.83%1  -13.61%   -9.11%  -10.63%1  -8.58%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class C  -14.76%1  -14.76%1  -10.02%   -9.12%  -8.54%1   -8.54%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class N  -11.79%2  -11.79%2   -9.51%   -8.60%  -6.93%2   -6.93%2

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class Y  -13.22%1  -13.22%1   -8.27%   -8.27%  -7.62%1   -7.62%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Jennison      Class A  -38.83%1  -35.10%1  -28.54%  -24.18%  -24.03%1 -21.47%1
Growth Fund

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class B  -38.56%1  -36.00%1  -28.47%  -24.71%  -23.84%1 -22.08%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class C  -36.00%1  -36.00%1  -25.37%  -24.62%  -22.08%  -22.08%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class N  -31.75%2  -31.75%2  -25.05%  -24.30%  -19.64%2 -19.64%2

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class Y  -34.90%1  -34.90%1  -24.04%  -24.04%  -21.33%1 -21.33%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Salomon       Class A  -23.43%1  -18.75%1  -17.22%  -12.17%  -13.86%1 -10.96%1
Brothers
All Cap Fund

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class B  -23.08%1  -19.90%1  -17.08%  -12.75%  -13.65%1 -11.67%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class C  -19.93%1  -19.93%1  -13.65%  -12.78%  -11.69%1 -11.69%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class N  -17.91%2  -17.91%2  -13.17%  -12.30%  -10.68%2 -10.68%2

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class Y  -18.06%1  -18.06%1  -11.52%  -11.52%  -10.54%1 -10.54%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

Gartmore      Class A  -45.62%1  -42.30%1  -28.07%  -23.68%  -28.86%1 -26.46%1
Millennium
Growth Fund

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class B  -45.38%1  -43.10%1  -28.02%  -24.23%  -28.68%1 -27.04%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class C  -43.10%1  -43.10%1  -24.99%  -24.23%  -27.04%1 -27.04%1

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class N  -36.76%2  -36.76%2  -24.67%  -23.90%  -23.07%2 -23.07%2

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

              Class Y  -42.10%1  -42.10%1  -23.51%  -23.51%  -26.32%1 -26.32%1

- --------------------------------------------------------------------------------

*For  Mercury  Advisors  S&P 500 Index Fund,  this is  information  is for the
periods ended 12/31/02.
1. Inception of Class A, Class B, Class C and Class Y shares:  2/16/01
2. Inception of Class N shares:  3/1/01


- ----------------------------------------------------------------------------------

  Average Annual Total Returns for Class A Shares (After Sales Charge) For the
                             Periods Ended 11/30/02*

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

                                                          After Taxes on
                                    After Taxes on        Distributions and Sale
Fund                                Distributions         of Fund Shares

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

                                     1 Year     5 Years     1 Year     5 Years

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

Mercury Advisors S&P Index Fund   -27.73%    -21.21%1   -16.82%     -16.57%1

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

Mercury Advisors Focus Growth Fund   -39.87%    -55.23%1   -24.28%     -40.92%1

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

QM Active Balanced Fund              -14.10%    -11.05%1    -8.35%     -8.69%1

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

Jennison Growth Fund                 -28.54%    -24.03%1   -17.38%     -18.78%1

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

Salomon Brothers All Cap Fund        -17.51%    -14.03%1   -10.46%     -11.02%1

- ----------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------

Gartmore Millennium Growth Fund      -28.07%    -28.86%1   -17.09%     -22.42%1

- ----------------------------------------------------------------------------------

*For Mercury Advisors S&P 500 Index Fund, this is information is for the periods
ended 12/31/02.
1. Inception of Class A shares: 2/16/01


Other Performance Comparisons. Each Fund compares its performance annually to
that of an appropriate broadly-based market index in its Annual Report to
shareholders. You can obtain that information by contacting the Transfer Agent
at the addresses or telephone numbers shown on the cover of this Statement of
Additional Information. Each Fund may also compare its performance to that of
other investments, including other mutual funds, or use rankings of its
performance by independent ranking entities. Examples of these performance
comparisons are set forth below.


      |X| Lipper Rankings. From time to time a Fund may publish the ranking of
the performance of its classes of shares by Lipper, Inc ("Lipper"). Lipper is a
widely-recognized independent mutual fund monitoring service. Lipper monitors
the performance of regulated investment companies, including the Funds, and
ranks their performance for various periods based on categories relating to
investment objectives. Lipper currently ranks (i) the performance of the OSM -
Jennison Growth Fund and the OSM - Mercury Advisors Focus Growth Fund against
all other large cap growth funds, (ii) the performance of the OSM - Mercury
Advisors S&P 500 Index Fund against all other S&P 500 Index objective funds,
(iii) the performance of the OSM - QM Active Balanced Fund against all other
balanced funds, (iv) the performance of the OSM - Salomon Brothers All Cap Fund
against all other multi-cap value funds, and (v) the performance of the OSM -
Gartmore Millennium Growth Fund II against all other mid cap core funds. The
Lipper performance rankings are based on total returns that include the
reinvestment of capital gain distributions and income dividends but do not take
sales charges or taxes into consideration. Lipper also publishes "peer-group"
indices of the performance of all mutual funds in a category that it monitors
and averages of the performance of the funds in particular categories.

      |X| Morningstar Ratings. From time to time a Fund may publish the star
rating of the performance of its classes of shares by Morningstar, Inc., an
independent mutual fund monitoring service. Morningstar rates mutual funds in
their specialized market sector. Each Fund is rated among domestic stock funds.

            Morningstar proprietary star ratings reflect historical
risk-adjusted total investment return. For each fund with at least a three-year
history, Morningstar calculates a Morningstar Rating(TM) based on a Morningstar
Risk-Adjusted Return measure that accounts for variation in a fund's monthly
performance (including the effects of sales charges, loads, and redemption
fees), placing more emphasis on downward variations and rewarding consistent
performance. The top 10% of funds in each category receive 5 stars, the next
22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2
stars, and the bottom 10% receive 1 star. (Each share class is counted as a
fraction of one fund within this scale and rated separately, which may cause
slight variations in the distribution percentages.) The Overall Morningstar
Rating for a fund is derived from a weighted average of the performance figures
associated with its three-, five-and ten-year (if applicable) Morningstar Rating
metrics.


      |X| Performance Rankings and Comparisons by Other Entities and
Publications. From time to time a Fund may include in its advertisements and
sales literature performance information about the Fund cited in newspapers and
other periodicals such as The New York Times, The Wall Street Journal, Barron's,
or similar publications. That information may include performance quotations
from other sources, including Lipper and Morningstar. The performance of a
Fund's classes of shares may be compared in publications to the performance of
various market indices or other investments, and averages, performance rankings
or other benchmarks prepared by recognized mutual fund statistical services.

      From time to time, a Fund may publish rankings or ratings of the Manager
or Transfer Agent, and of the investor services provided by them to shareholders
of the Oppenheimer funds, other than performance rankings of the Oppenheimer
funds themselves. Those ratings or rankings of shareholder and investor services
by third parties may include comparisons of their services to those provided by
other mutual fund families selected by the rating or ranking services. They may
be based upon the opinions of the rating or ranking service itself, using its
research or judgment, or based upon surveys of investors, brokers, shareholders
or others.

       From time to time the Fund may include in its advertisements and sales
literature the total return performance of a hypothetical investment account
that includes shares of the fund and other Oppenheimer funds. The combined
account may be part of an illustration of an asset allocation model or similar
presentation. The account performance may combine total return performance of
the fund and the total return performance of other Oppenheimer funds included in
the account. Additionally, from time to time, the Fund's advertisements and
sales literature may include, for illustrative or comparative purposes,
statistical data or other information about general or specific market and
economic conditions. That may include, for example, o information about the
performance of certain securities or commodities
         markets or segments of those markets,
o     information about the performance of the economies of particular
         countries or regions,
o     the earnings of companies included in segments of particular
         industries, sectors, securities markets, countries or regions,
o     the availability of different types of securities or offerings of
         securities,
o     information relating to the gross national or gross domestic product of
         the United States or other countries or regions,
o     comparisons of various market sectors or indices to demonstrate
         performance, risk, or other characteristics of the Fund.


ABOUT YOUR ACCOUNT

How to Buy Shares

Additional information is presented below about the methods that can be used to
buy shares of a Fund. Appendix C contains more information about the special
sales charge arrangements offered by a Fund, and the circumstances in which
sales charges may be reduced or waived for certain classes of investors.


AccountLink. When shares are purchased through AccountLink, each purchase must
be at least $50 and shareholders must invest at least $500 before an Asset
Builder Plan (described below) can be established on a new account. Accounts
established prior to November 1, 2002 will remain at $25 for additional
purchases. Shares will be purchased on the regular business day the Distributor
is instructed to initiate the Automated Clearing House ("ACH") transfer to buy
the shares. Dividends will begin to accrue on shares purchased with the proceeds
of ACH transfers on the business day the Fund receives Federal Funds for the
purchase through the ACH system before the close of The New York Stock Exchange
("the Exchange"). The Exchange normally closes at 4:00 P.M., but may close
earlier on certain days. If Federal Funds are received on a business day after
the close of the Exchange, the shares will be purchased and dividends will begin
to accrue on the next regular business day. The proceeds of ACH transfers are
normally received by the Fund three days after the transfers are initiated. If
the proceeds of the ACH transfer are not received on a timely basis, the
Distributor reserves the right to cancel the purchase order. The Distributor and
the Funds are not responsible for any delays in purchasing shares resulting from
delays in ACH transmissions.


Reduced Sales Charges. As discussed in the Prospectus, a reduced sales charge
rate may be obtained for Class A shares under Right of Accumulation and Letters
of Intent because of the economies of sales efforts and reduction in expenses
realized by the Distributor, dealers and brokers making such sales. No sales
charge is imposed in certain other circumstances described in Appendix C to this
Statement of Additional Information because the Distributor or dealer or broker
incurs little or no selling expenses.

      |X| Right of Accumulation. To qualify for the lower sales charge rates
that apply to larger purchases of Class A shares, you and your spouse can add
together:
         Class A and Class B shares you purchase for your individual accounts
            (including IRAs and 403(b) plans), or for your joint accounts, or
            for trust or custodial accounts on behalf of your children who are
            minors, and

         Current purchases of Class A and Class B shares of the Fund and other
            Oppenheimer funds to reduce the sales charge rate that applies to
            current purchases of Class A shares, and

o           Class A and Class B shares of Oppenheimer funds you previously
            purchased subject to an initial or contingent deferred sales charge
            to reduce the sales charge rate for current purchases of Class A
            shares, provided that you still hold your investment in one of the
            Oppenheimer funds.

      A fiduciary can count all shares purchased for a trust, estate or other
fiduciary account (including one or more employee benefit plans of the same
employer) that has multiple accounts. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently own
to the value of current purchases to determine the sales charge rate that
applies. The reduced sales charge will apply only to current purchases. You must
request it when you buy shares.

The Oppenheimer Funds. The Oppenheimer funds are those mutual funds for which
the Distributor acts as the distributor and currently include the following:


Oppenheimer AMT-Free New York Municipals  Oppenheimer Multiple Strategies Fund
Oppenheimer Bond Fund                     Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Preservation Fund     Oppenheimer Quest Balanced Value Fund
                                          Oppenheimer  Quest  Capital Value Fund,
Oppenheimer Capital Income Fund           Inc.
                                          Oppenheimer  Quest  Global  Value Fund,

Oppenheimer Champion Income Fund          Inc.
Oppenheimer Convertible Securities Fund   Oppenheimer Quest Opportunity Value Fund
Oppenheimer Developing Markets Fund       Oppenheimer Quest Value Fund, Inc.
Oppenheimer Disciplined Allocation Fund   Oppenheimer Real Asset Fund

                                          Oppenheimer      Rochester     National
Oppenheimer Discovery Fund                Municipals
Oppenheimer Emerging Growth Fund          Oppenheimer Senior Floating Rate Fund
Oppenheimer Emerging Technologies Fund    Oppenheimer Small Cap Value Fund
Oppenheimer Enterprise Fund               Oppenheimer Strategic Income Fund
Oppenheimer Europe Fund                   Oppenheimer Total Return Bond Fund
Oppenheimer Global Fund                   Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund   Oppenheimer Trinity Core Fund
                                          Oppenheimer  Trinity  Large Cap  Growth

Oppenheimer Gold & Special Minerals Fund  Fund

Oppenheimer Growth Fund                   Oppenheimer Trinity Value Fund
Oppenheimer High Yield Fund               Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund       Oppenheimer Value Fund
Oppenheimer International Growth Fund     Limited-Term New York Municipal Fund
Oppenheimer  International  Small Company
Fund                                      Rochester Fund Municipals

                                          OSM1- Gartmore  Millennium  Growth Fund
Oppenheimer Limited-Term Government Fund  II

Oppenheimer Limited Term Municipal Fund   OSM1 - Jennison Growth Fund
Oppenheimer  Main Street  Growth & Income OSM1 - Mercury  Advisors S&P
Fund                                        500 Index Fund

                                          OSM1 - Mercury  Advisors  Focus Growth

Oppenheimer Main Street Opportunity Fund  Fund
Oppenheimer Main Street Small Cap Fund OSM1 - QM Active Balanced Fund
Oppenheimer MidCap Fund OSM1 - Salomon Brothers All Cap Fund And the following
money market funds:
Oppenheimer Cash Reserves                 Centennial Government Trust
Oppenheimer Money Market Fund, Inc.       Centennial Money Market Trust
Centennial America Fund, L. P.            Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust    Centennial Tax Exempt Trust

1 - "OSM" stands for Oppenheimer Select
Managers

      There is an initial sales charge on the purchase of Class A shares of each
of the Oppenheimer funds described above except the money market funds and
Oppenheimer Senior Floating Rate Fund. Under certain circumstances described in
this Statement of Additional Information, redemption proceeds of certain money
market fund shares may be subject to a contingent deferred sales charge.

Letters of Intent. Under a Letter of Intent, if you purchase Class A shares or
Class A and Class B shares of a Fund and other Oppenheimer funds during a
13-month period, you can reduce the sales charge rate that applies to your
purchases of Class A shares. The total amount of your intended purchases of both
Class A and Class B shares will determine the reduced sales charge rate for the
Class A shares purchased during that period. You can include purchases made up
to 90 days before the date of the Letter. Letters of Intent do not consider
Class C or Class N shares you purchase or may have purchased.

      A Letter of Intent is an investor's statement in writing to the
Distributor of the intention to purchase Class A shares or Class A and Class B
shares of a Fund (and other Oppenheimer funds) during a 13-month period (the
"Letter of Intent period"). At the investor's request, this may include
purchases made up to 90 days prior to the date of the Letter. The Letter states
the investor's intention to make the aggregate amount of purchases of shares
which, when added to the investor's holdings of shares of those funds, will
equal or exceed the amount specified in the Letter. Purchases made by
reinvestment of dividends or distributions of capital gains and purchases made
at net asset value without sales charge do not count toward satisfying the
amount of the Letter.

      A Letter enables an investor to count the Class A and Class B shares
purchased under the Letter to obtain the reduced sales charge rate on purchases
of Class A shares of a Fund (and other Oppenheimer funds) that applies under the
Right of Accumulation to current purchases of Class A shares. Each purchase of
Class A shares under the Letter will be made at the offering price (including
the sales charge) that applies to a single lump-sum purchase of shares in the
amount intended to be purchased under the Letter.

      In submitting a Letter, the investor makes no commitment to purchase
shares. However, if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the investor's
holdings of shares on the last day of that period, do not equal or exceed the
intended purchase amount, the investor agrees to pay the additional amount of
sales charge applicable to such purchases. That amount is described in "Terms of
Escrow," below (those terms may be amended by the Distributor from time to
time). The investor agrees that shares equal in value to 5% of the intended
purchase amount will be held in escrow by the Transfer Agent subject to the
Terms of Escrow. Also, the investor agrees to be bound by the terms of the
Prospectus, this Statement of Additional Information and the application used
for a Letter of Intent. If those terms are amended, as they may be from time to
time by a Fund, the investor agrees to be bound by the amended terms and that
those amendments will apply automatically to existing Letters of Intent.

      If the total eligible purchases made during the Letter of Intent period do
not equal or exceed the intended purchase amount, the concessions previously
paid to the dealer of record for the account and the amount of sales charge
retained by the Distributor will be adjusted to the rates applicable to actual
total purchases. If total eligible purchases during the Letter of Intent period
exceed the intended purchase amount and exceed the amount needed to qualify for
the next sales charge rate reduction set forth in the Prospectus, the sales
charges paid will be adjusted to the lower rate. That adjustment will be made
only if and when the dealer returns to the Distributor the excess of the amount
of concessions allowed or paid to the dealer over the amount of concessions that
apply to the actual amount of purchases. The excess concessions returned to the
Distributor will be used to purchase additional shares for the investor's
account at the net asset value per share in effect on the date of such purchase,
promptly after the Distributor's receipt thereof.

      The Transfer Agent will not hold shares in escrow for purchases of shares
of a Fund and other Oppenheimer funds by OppenheimerFunds prototype 401(k) plans
under a Letter of Intent. If the intended purchase amount under a Letter of
Intent entered into by an OppenheimerFunds prototype 401(k) plan is not
purchased by the plan by the end of the Letter of Intent period, there will be
no adjustment of concessions paid to the broker-dealer or financial institution
of record for accounts held in the name of that plan.

      In determining the total amount of purchases made under a Letter, shares
redeemed by the investor prior to the termination of the Letter of Intent period
will be deducted. It is the responsibility of the dealer of record and/or the
investor to advise the Distributor about the Letter in placing any purchase
orders for the investor during the Letter of Intent period. All of such
purchases must be made through the Distributor.

      |X| Terms of Escrow That Apply to
      Letters of Intent.

      1. Out of the initial purchase (or subsequent purchases if necessary) made
pursuant to a Letter, shares of a Fund equal in value up to 5% of the intended
purchase amount specified in the Letter shall be held in escrow by the Transfer
Agent. For example, if the intended purchase amount is $50,000, the escrow shall
be shares valued in the amount of $2,500 (computed at the offering price
adjusted for a $50,000 purchase). Any dividends and capital gains distributions
on the escrowed shares will be credited to the investor's account.

      2. If the total minimum investment specified under the Letter is completed
within the 13-month Letter of Intent period, the escrowed shares will be
promptly released to the investor.

      3. If, at the end of the 13-month Letter of Intent period the total
purchases pursuant to the Letter are less than the intended purchase amount
specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually paid
and the amount of sales charges which would have been paid if the total amount
purchased had been made at a single time. That sales charge adjustment will
apply to any shares redeemed prior to the completion of the Letter. If the
difference in sales charges is not paid within twenty days after a request from
the Distributor or the dealer, the Distributor will, within sixty days of the
expiration of the Letter, redeem the number of escrowed shares necessary to
realize such difference in sales charges. Full and fractional shares remaining
after such redemption will be released from escrow. If a request is received to
redeem escrowed shares prior to the payment of such additional sales charge, the
sales charge will be withheld from the redemption proceeds.

      4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for redemption any
or all escrowed shares.

5. The shares eligible for purchase under the Letter (or the holding of which
may be counted toward completion of a Letter) include:
(a)         Class A shares sold with a front-end sales charge or subject to a
            Class A contingent deferred sales charge,
(b)         Class B shares of other Oppenheimer funds acquired subject to a
            contingent deferred sales charge, and
(c)   Class A or Class B shares acquired
            by exchange of either (1)
            Class A shares of one of the
            other Oppenheimer funds that
            were acquired subject to a
            Class A initial or
            contingent deferred sales
            charge or (2) Class B shares
            of one of the other
            Oppenheimer funds that were
            acquired subject to a
            contingent deferred sales
            charge.

      6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in the
section of the Prospectus entitled "How to Exchange Shares" and the escrow will
be transferred to that other fund.

Asset Builder Plans. As explained in the Prospectus, you must initially
establish your account with $500. Subsequently, you can establish an Asset
Builder Plan to automatically purchase additional shares directly from a bank
account for as little as $50. For those accounts established prior to November
1, 2002 and which have previously established Asset Builder Plans, additional
purchases will remain at $25. Shares purchased by Asset Builder Plan payments
from bank accounts are subject to the redemption restrictions for recent
purchases described in the Prospectus. Asset Builder Plans are available only if
your bank is an ACH member. Asset Builder Plans may not be used to buy shares
for OppenheimerFunds employer-sponsored qualified retirement accounts. Asset
Builder Plans also enable shareholders of Oppenheimer Cash Reserves to use their
fund account to make monthly automatic purchases of shares of up to four other
Oppenheimer funds.

      If you make payments from your bank account to purchase shares of a Fund,
your bank account will be debited automatically. Normally the debit will be made
two business days prior to the investment dates you selected on your
application. Neither the Distributor, the Transfer Agent nor the Fund shall be
responsible for any delays in purchasing shares that result from delays in ACH
transmissions.

      Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor) and request an application from the Distributor. Complete the
application and return it. You may change the amount of your Asset Builder
payment or you can terminate these automatic investments at any time by writing
to the Transfer Agent. The Transfer Agent requires a reasonable period
(approximately 10 days) after receipt of your instructions to implement them. A
Fund reserves the right to amend, suspend or discontinue offering Asset Builder
plans at any time without prior notice.

Retirement Plans. Certain types of retirement plans are entitled to purchase
shares of a Fund without sales charge or at reduced sales charge rates, as
described in Appendix C to this Statement of Additional Information. Certain
special sales charge arrangements described in that Appendix apply to retirement
plans whose records are maintained on a daily valuation basis by Merrill Lynch
Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent record keeper
that has a contract or special arrangement with Merrill Lynch. If on the date
the plan sponsor signed the Merrill Lynch record keeping service agreement the
plan has less than $3 million in assets (other than assets invested in money
market funds) invested in applicable investments, then the retirement plan may
purchase only Class B shares of the Oppenheimer funds. Any retirement plans in
that category that currently invest in Class B shares of a Fund will have their
Class B shares converted to Class A shares of the Fund when the plan's
applicable investments reach $5 million. OppenheimerFunds has entered into
arrangements with certain record keepers whereby the Transfer Agent compensates
the record keeper for its record keeping and account servicing functions that it
performs on behalf of the participant level accounts of a retirement plan. While
such compensation may act to reduce the record keeping fees charged by the
retirement plan's record keeper, that compensation arrangement may be terminated
at any time, potentially affecting the record keeping fees charged by the
retirement plan's record keeper.

Cancellation of Purchase Orders. Cancellation of purchase orders for a Fund's
shares (for example, when a purchase check is returned to a Fund unpaid) causes
a loss to be incurred when the net asset values of that Fund's shares on the
cancellation date is less than on the purchase date. That loss is equal to the
amount of the decline in the net asset value per share multiplied by the number
of shares in the purchase order. The investor is responsible for that loss. If
the investor fails to compensate the Fund for the loss, the Distributor will do
so. The Fund may reimburse the Distributor for that amount by redeeming shares
from any account registered in that investor's name, or the Fund or the
Distributor may seek other redress.

Classes of Shares. Each class of shares of a Fund represents an interest in the
same portfolio of investments of a Fund. However, each class has different
shareholder privileges and features. The net income attributable to Class B,
Class C or Class N shares and the dividends payable on Class B, Class C or Class
N shares will be reduced by incremental expenses borne solely by that class.
Those expenses include the asset-based sales charges to which Class B, Class C
and Class N shares are subject.

      The availability of different classes of shares permits an investor to
choose the method of purchasing shares that is more appropriate for the
investor. That may depend on the amount of the purchase, the length of time the
investor expects to hold shares, and other relevant circumstances. Class A
shares normally are sold subject to an initial sales charge. While Class B,
Class C and Class N shares have no initial sales charge, the purpose of the
deferred sales charge and asset-based sales charge on Class B, Class C and Class
N shares is the same as that of the initial sales charge on Class A shares - to
compensate the Distributor and brokers, dealers and financial institutions that
sell shares of a Fund. A salesperson who is entitled to receive compensation
from his or her firm for selling Fund shares may receive different levels of
compensation for selling one class of shares rather than another. Class Y shares
have no sales charges.

      The Distributor will not accept any order in the amount of $500,000 or
more for Class B shares or $1 million or more for Class C shares on behalf of a
single investor (not including dealer "street name" or omnibus accounts). That
is because generally it will be more advantageous for that investor to purchase
Class A shares of a Fund.

      |X| Class A Shares Subject to a Contingent Deferred Sales Charge. For
purchases of Class A shares at net asset value whether or not subject to a
contingent deferred sales charge as described in the Prospectus, no sales
concessions will be paid to the broker-dealer of record, as described in the
Prospectus, on sales of Class A shares purchased with the redemption proceeds of
shares of another mutual fund offered as an investment option in a retirement
plan in which Oppenheimer funds are also offered as investment options under a
special arrangement with the Distributor, if the purchase occurs more than 30
days after the Oppenheimer funds are added as an investment option under that
plan. Additionally, that concession will not be paid on purchases of Class A
shares by a retirement plan made with the redemption proceeds of Class N shares
of one or more Oppenheimer funds held by the plan for more than 18 months.

      |X| Class B Conversion. Under current interpretations of applicable
federal income tax law by the Internal Revenue Service, the conversion of Class
B shares to Class A shares 72 months after purchase is not treated as a taxable
event for the shareholder. If those laws or the IRS interpretation of those laws
should change, the automatic conversion feature may be suspended. In that event,
no further conversions of Class B shares would occur while that suspension
remained in effect. Although Class B shares could then be exchanged for Class A
shares on the basis of relative net asset value of the two classes, without the
imposition of a sales charge or fee, such exchange could constitute a taxable
event for the shareholder, and absent such exchange, Class B shares might
continue to be subject to the asset-based sales charge for longer than six
years.

      |X| Availability of Class N Shares. In addition to the description of the
types of retirement plans which may purchase Class N shares contained in the
prospectus, Class N shares also are offered to the following:
o     to all rollover IRAs (including
            SEP IRAs and SIMPLE IRAs),
o     to all rollover contributions made
            to Individual 401(k) plans,
            Profit-Sharing Plans and
            Money Purchase Pension Plans,
o     to all direct rollovers from
            OppenheimerFunds-sponsored
            Pinnacle and Ascender
            retirement plans,
o     to all trustee-to-trustee IRA
            transfers,
o     to all 90-24 type 403(b) transfers,
o           to Group Retirement Plans (as defined in Appendix C to this
            Statement of Additional Information) which have entered into a
            special agreement with the Distributor for that purpose,
o     to Retirement Plans qualified
            under Sections 401(a) or
            401(k) of the Internal
            Revenue Code, the
            recordkeeper or the plan
            sponsor for which has
            entered into a special
            agreement with the
            Distributor,
o           to Retirement Plans of a plan sponsor where the aggregate assets of
            all such plans invested in the Oppenheimer funds is $500,000 or
            more,
o           to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
            purchase with the redemption proceeds of Class A shares of one or
            more Oppenheimer funds, and
o           to certain customers of broker-dealers and financial advisors that
            are identified in a special agreement between the broker-dealer or
            financial advisor and the Distributor for that purpose.

      The sales concession and the advance of the service fee, as described in
the Prospectus, will not be paid to dealers of record on sales of Class N shares
on:
o     purchases of Class N shares in
            amounts of $500,000 or more
            by a retirement plan that
            pays for the purchase with
            the redemption proceeds of
            Class A shares of one or
            more Oppenheimer funds
            (other than rollovers from
            an
            OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k)
            plan to any IRA invested in
            the Oppenheimer funds),
o     purchases of Class N shares in
            amounts of $500,000 or more
            by a retirement plan that
            pays for the purchase with
            the redemption proceeds of
            Class C shares of one or
            more Oppenheimer funds held
            by the plan for more than
            one year (other than
            rollovers from an
            OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k)
            plan to any IRA invested in
            the Oppenheimer funds), and
o     on purchases of Class N shares by
            an
            OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k)
            plan made with the
            redemption proceeds of Class
            A shares of one or more
            Oppenheimer funds.

      No sales concessions will be paid to the broker-dealer of record, as
described in the Prospectus, on sales of Class N shares purchased with the
redemption proceeds of shares of another mutual fund offered as an investment
option in a retirement plan in which Oppenheimer funds are also offered as
investment options under a special arrangement with the Distributor, if the
purchase occurs more than 30 days after the Oppenheimer funds are added as an
investment option under that plan.

      |X| Allocation of Expenses. A Fund pays expenses related to its daily
operations, such as custodian fees, Trustees' fees, transfer agency fees, legal
fees and auditing costs. Those expenses are paid out of the Fund's assets and
are not paid directly by shareholders. However, those expenses reduce the net
asset values of shares, and therefore are indirectly borne by shareholders
through their investment.

      The methodology for calculating the net asset value, dividends and
distributions of each Fund's share classes recognizes two types of expenses.
General expenses that do not pertain specifically to any one class are allocated
pro rata to the shares of all classes. The allocation is based on the percentage
of the Fund's total assets that is represented by the assets of each class, and
then equally to each outstanding share within a given class. Such general
expenses include management fees, legal, bookkeeping and audit fees, printing
and mailing costs of shareholder reports, Prospectuses, Statements of Additional
Information and other materials for current shareholders, fees to unaffiliated
Trustees, custodian expenses, share issuance costs, organization and start-up
costs, interest, taxes and brokerage commissions, and non-recurring expenses,
such as litigation costs.

      Other expenses that are directly attributable to a particular class are
allocated equally to each outstanding share within that class. Examples of such
expenses include distribution and service plan (12b-1) fees, transfer and
shareholder servicing agent fees and expenses, and shareholder meeting expenses
(to the extent that such expenses pertain only to a specific class).

Account Fees. As stated in the
Prospectus, a $12 annual fee is assessed
on any account valued at less than $500.
This fee will not be assessed on the
following accounts:
o     Accounts that have balances below $500 due to the automatic conversion of
      shares from Class B to Class A shares;
o     Accounts with an active Asset
      Builder Plan, payroll deduction
      plan or a military allotment plan;
o     OppenheimerFunds-sponsored group
      retirement accounts that are
      making continuing purchases;
o     Certain accounts held by
      broker-dealers through the
      National Securities Clearing
      Corporation; and
o     Accounts that fall below the $500 threshold due solely to market
      fluctuations within the 12-month period preceding the date the fee is
      deducted.

      The fee is automatically deducted from qualifying accounts annually on or
about the second to last business day of September. This annual fee is waived
for any shareholders who elect to access their account documents through
electronic document delivery rather than in paper copy and who elect to utilize
the Internet or PhoneLink as their primary source for their general servicing
needs. To sign up to access account documents electronically via eDocs Direct,
please visit the Service Center on our website at WWW.OPPENHEIMERFUNDS.COM or
call 1.888.470.0862 for instructions.

Determination of Net Asset Values Per Share. The net asset values per share of
each class of shares of a Fund are determined as of the close of business of the
Exchange on each day that the Exchange is open. The calculation is done by
dividing the value of the Fund's net assets attributable to a class by the
number of shares of that class that are outstanding. The Exchange normally
closes at 4:00 P.M., Eastern time, but may close earlier on some other days (for
example, in case of weather emergencies or on days falling before a U.S.
holiday). All references to time in this Statement of Additional Information
mean "Eastern time." The Exchange's most recent annual announcement (which is
subject to change) states that it will close on New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. It may also close on other days.

      Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and
holidays) or after 4:00 P.M. on a regular business day. Because a Fund's net
asset values will not be calculated on those days, the Fund's net asset values
per share may be significantly affected on such days when shareholders may not
purchase or redeem shares. Additionally, trading on European and Asian stock
exchanges and over-the-counter markets normally is completed before the close of
the Exchange.

      Changes in the values of securities traded on foreign exchanges or markets
as a result of events that occur after the prices of those securities are
determined, but before the close of the Exchange, will not be reflected in the
Fund's calculation of its net asset values that day unless the Manager or the
Adviser determines that the event is likely to effect a material change in the
value of the security. For all of the Funds, except the OSM - Mercury Advisors
S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund, if such
determination is made, the Manager, or an internal valuation committee
established by the Manager, as applicable, may establish a valuation, under
procedures established by the Board and subject to the approval, ratification
and confirmation by the Board at its next ensuing meeting. For the OSM - Mercury
Advisors S&P 500 Index Fund and the OSM - Mercury Advisors Focus Growth Fund,
securities may be valued at their fair value as determined in good faith by the
Board of Trustees of the applicable Master Fund or by the Adviser using
procedures approved by the Board of Trustees of that Master Fund.

      |X| Securities Valuation. Each of the Fund's Board of Trustees and
theBoard of Trustees of the Master Fund (in the case of the OSM - Mercury
Advisors S&P 500 Index Fund or the OSM - Mercury Advisors Focus Growth Fund)
has established procedures for the valuation of each Fund's securities. In
general those procedures are as follows: o Equity securities traded on a U.S.
securities exchange or on Nasdaq(R) are valued as follows:
(1)   if last sale information is
               regularly reported, they
               are valued at the last
               reported sale price on
               the principal exchange on
               which they are traded or
               on Nasdaq, as applicable,
               on that day, or
(2)   if last sale information is not
               available on a valuation
               date, they are valued at
               the last reported sale
               price preceding the
               valuation date if it is
               within the spread of the
               closing "bid" and "asked"
               prices on the valuation
               date or, if not,  at the
               closing "bid" price on
               the valuation date.
o Equity securities traded on a foreign securities exchange generally are valued
in one of the following ways: (1) at the last sale price available
               to the pricing service
               approved by the Board of
               Trustees, or
(2)   at the last sale price obtained by
               the Manager or Adviser from the report of the principal exchange
               on which the security is traded at its last trading session on or
               immediately before the valuation date, or
(3)   at the mean between the "bid" and
               "asked" prices obtained
               from the principal
               exchange on which the
               security is traded or, on
               the basis of reasonable
               inquiry, from two market
               makers in the security.
o Long-term debt securities having a remaining maturity in excess of 60 days are
valued based on the mean between the "bid" and "asked" prices determined by a
portfolio pricing service approved by each Fund's Board of Trustees or the Board
of Trustees of the Master Fund or obtained by the Manager from two active market
makers in the security on the basis of reasonable inquiry. o The following
securities are valued at the mean between the "bid" and "asked" prices
determined by a pricing service approved by each Fund's Board of Trustees or the
Board of Trustees of the Master Fund or obtained by the Manager or Adviser, as
the case may be, from two active market makers in the security on the basis of
reasonable inquiry: (1) debt instruments that have a
               maturity of more than 397
               days when issued,
(2)            debt instruments that had a maturity of 397 days or less when
               issued and have a remaining maturity of more than 60 days, and
(3)            non-money market debt instruments that had a maturity of 397 days
               or less when issued and which have a remaining maturity of 60
               days or less.
o The following securities are valued at cost, adjusted for amortization of
premiums and accretion of discounts:
(1)   money market debt securities held
               by a non-money market
               fund that had a maturity
               of less than 397 days
               when issued that have a
               remaining maturity of 60
               days or less, and
(2)            debt instruments held by a money market fund that have a
               remaining maturity of 397 days or less.

      However, for the OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Mercury Advisors Focus Growth Fund, obligations with remaining maturities of 60
days or less will not be valued at amortized cost if the Adviser believes that
the method no longer produces fair valuations.

      |_| For the OSM - Mercury Advisors S&P 500 Index Fund and the OSM -
Mercury Advisors Focus Growth Fund, repurchase agreements will be valued at cost
plus accrued interest.

o Securities (including restricted securities) not having readily-available
market quotations are valued at fair value determined under the Board's
procedures. If the Manager is unable to locate two market makers willing to give
quotes, a security may be priced at the mean between the "bid" and "asked"
prices provided by a single active market maker (which in certain cases may be
the "bid" price if no "asked" price is available).

      In the case of U.S. government securities, mortgage-backed securities,
corporate bonds and foreign government securities, when last sale information is
not generally available, the Manager or Adviser, as the case may be, may use
pricing services approved by the applicable Board of Trustees. The pricing
service may use "matrix" comparisons to the prices for comparable instruments on
the basis of quality, yield and maturity. Other special factors may be involved
(such as the tax-exempt status of the interest paid by municipal securities).
The Manager or Adviser, as the case may be, will monitor the accuracy of the
pricing services. That monitoring may include comparing prices used for
portfolio valuation to actual sales prices of selected securities.

      The closing prices in the London foreign exchange market on a particular
business day that are provided to the Manager or Adviser, as the case may be, by
a bank, dealer or pricing service that the Manager or Adviser has determined to
be reliable are used to value foreign currency, including forward contracts, and
to convert to U.S. dollars securities that are denominated in foreign currency.

      Puts, calls, and futures are valued at the last sale price on the
principal exchange on which they are traded or on Nasdaq, as applicable, as
determined by a pricing service approved by the applicable Board of Trustees or
by the Manager or Adviser. If there were no sales that day, they shall be valued
at the last sale price on the preceding trading day if it is within the spread
of the closing "bid" and "asked" prices on the principal exchange or on Nasdaq
on the valuation date. If not, the value shall be the closing bid price on the
principal exchange or on Nasdaq on the valuation date. If the put, call or
future is not traded on an exchange or on Nasdaq, it shall be valued by the mean
between "bid" and "asked" prices obtained by the Manager or Adviser from two
active market makers. In certain cases that may be at the "bid" price if no
"asked" price is available.

      When the Fund writes an option, an amount equal to the premium received is
included in a Fund's Statement of Assets and Liabilities as an asset. An
equivalent credit is included in the liability section. The credit is adjusted
("marked-to-market") to reflect the current market value of the option. In
determining a Fund's gain on investments, if a call or put written by the Fund
is exercised, the proceeds are increased by the premium received. If a call or
put written by a Fund expires, the Fund has a gain in the amount of the premium.
If a Fund enters into a closing purchase transaction, it will have a gain or
loss, depending on whether the premium received was more or less than the cost
of the closing transaction. If a Fund exercises a put it holds, the amount the
Fund receives on its sale of the underlying investment is reduced by the amount
of premium paid by the Fund.


How to Sell Shares

The information below supplements the terms and conditions for redeeming shares
set forth in the Prospectus.


Sending Redemption Proceeds by Federal Funds Wire. The Federal Funds wire of
redemption proceeds may be delayed if each Fund's custodian bank is not open for
business on a day when the Fund would normally authorize the wire to be made,
which is usually the Fund's next regular business day following the redemption.
In those circumstances, the wire will not be transmitted until the next bank
business day on which the Fund is open for business. No dividends will be paid
on the proceeds of redeemed shares awaiting transfer by Federal Funds wire.


Reinvestment Privilege. Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of:
      Class A shares purchased subject to an initial sales charge or Class A
         shares on which a contingent deferred sales charge was paid, or
      Class B shares that were subject to the Class B contingent deferred sales
         charge when redeemed.

      The reinvestment may be made without sales charge only in Class A shares
of a Fund or any of the other Oppenheimer funds into which shares of a Fund are
exchangeable as described in "How to Exchange Shares" below. Reinvestment will
be at the net asset value next computed after the Transfer Agent receives the
reinvestment order. The shareholder must ask the Transfer Agent for that
privilege at the time of reinvestment. This privilege does not apply to Class C,
Class N or Class Y shares. A Fund may amend, suspend or cease offering this
reinvestment privilege at any time as to shares redeemed after the date of such
amendment, suspension or cessation.

      Any capital gain that was realized when the shares were redeemed is
taxable, and reinvestment will not alter any capital gains tax payable on that
gain. If there has been a capital loss on the redemption, some or all of the
loss may not be tax deductible, depending on the timing and amount of the
reinvestment. Under the Internal Revenue Code, if the redemption proceeds of
Fund shares on which a sales charge was paid are reinvested in shares of a Fund
or another of the Oppenheimer funds within 90 days of payment of the sales
charge, the shareholder's basis in the shares of a Fund that were redeemed may
not include the amount of the sales charge paid. That would reduce the loss or
increase the gain recognized from the redemption. However, in that case the
sales charge would be added to the basis of the shares acquired by the
reinvestment of the redemption proceeds.

Payments "In Kind". The Prospectus states that payment for shares tendered for
redemption is ordinarily made in cash. However, under certain circumstances, the
Board of Trustees of a Fund may determine that it would be detrimental to the
best interests of the remaining shareholders of that Fund to make payment of a
redemption order wholly or partly in cash. In that case, the Fund may pay the
redemption proceeds in whole or in part by a distribution "in kind" of liquid
securities from the portfolio of a Fund, in lieu of cash.


      Each Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act. Under that rule, each Fund is obligated to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net assets of the Fund during any
90-day period for any one shareholder. If shares are redeemed in kind, the
redeeming shareholder might incur brokerage or other costs in selling the
securities for cash. Each Fund will value securities used to pay redemptions in
kind using the same method the Fund uses to value its portfolio securities
described above under "Determination of Net Asset Values Per Share." That
valuation will be made as of the time the redemption price is determined.

Involuntary Redemptions. Each Fund's Board of Trustees has the right to cause
the involuntary redemption of the shares held in any account if the aggregate
net asset value of those shares is less than $500 or such lesser amount as the
Board may fix. The Board will not cause the involuntary redemption of shares in
an account if the aggregate net asset value of such shares has fallen below the
stated minimum solely as a result of market fluctuations. If the Board exercises
this right, it may also fix the requirements for any notice to be given to the
shareholders in question (not less than 30 days). The Board may alternatively
set requirements for the shareholder to increase the investment, or set other
terms and conditions so that the shares would not be involuntarily redeemed.


Transfers of Shares. A transfer of shares to a different registration is not an
event that triggers the payment of sales charges. Therefore, shares are not
subject to the payment of a contingent deferred sales charge of any class at the
time of transfer to the name of another person or entity. It does not matter
whether the transfer occurs by absolute assignment, gift or bequest, as long as
it does not involve, directly or indirectly, a public sale of the shares. When
shares subject to a contingent deferred sales charge are transferred, the
transferred shares will remain subject to the contingent deferred sales charge.
It will be calculated as if the transferee shareholder had acquired the
transferred shares in the same manner and at the same time as the transferring
shareholder.


      If less than all shares held in an account are transferred, and some but
not all shares in the account would be subject to a contingent deferred sales
charge if redeemed at the time of transfer, the priorities described in the
Prospectus under "How to Buy Shares" for the imposition of the Class B, Class C
and Class N contingent deferred sales charge will be followed in determining the
order in which shares are transferred.

Distributions From Retirement Plans. Requests for distributions from
OppenheimerFunds-sponsored IRAs, SEP-IRAs, SIMPLE IRAs, 403(b)(7) custodial
plans, 401(k) plans or pension or profit-sharing plans should be addressed to
"Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its
address listed in "How To Sell Shares" in the Prospectus or on the back cover of
this Statement of Additional Information. The request must:

(1)      state the reason for the distribution;
(2)      state the owner's awareness of tax penalties if the distribution is
         premature; and
(3)      conform to the requirements of the plan and the Fund's other redemption
         requirements.


      Participants (other than self-employed plan sponsors) in
OppenheimerFunds-sponsored pension or profit-sharing plans with shares of a Fund
held in the name of the plan or its fiduciary may not directly request
redemption of their accounts. The plan administrator or fiduciary must sign the
request.


      Distributions from pension and profit sharing plans are subject to special
requirements under the Internal Revenue Code and certain documents (available
from the Transfer Agent) must be completed and submitted to the Transfer Agent
before the distribution may be made. Distributions from retirement plans are
subject to withholding requirements under the Internal Revenue Code, and IRS
Form W-4P (available from the Transfer Agent) must be submitted to the Transfer
Agent with the distribution request, or the distribution may be delayed. Unless
the shareholder has provided the Transfer Agent with a certified tax
identification number, the Internal Revenue Code requires that tax be withheld
from any distribution even if the shareholder elects not to have tax withheld.
Each Fund, the Manager, the Distributor, and the Transfer Agent assume no
responsibility to determine whether a distribution satisfies the conditions of
applicable tax laws and will not be responsible for any tax penalties assessed
in connection with a distribution.

Special Arrangements for Repurchase of Shares from Dealers and Brokers. The
Distributor is each Fund's agent to repurchase its shares from authorized
dealers or brokers on behalf of their customers. Shareholders should contact
their broker or dealer to arrange this type of redemption. The repurchase price
per share will be the net asset value next computed after the Distributor
receives an order placed by the dealer or broker. However, if the Distributor
receives a repurchase order from a dealer or broker after the close of The
Exchange on a regular business day, it will be processed at that day's net asset
value if the order was received by the dealer or broker from its customers prior
to the time the Exchange closes. Normally, the Exchange closes at 4:00 P.M., but
may do so earlier on some days. Additionally, the order must have been
transmitted to and received by the Distributor prior to its close of business
that day (normally 5:00 P.M.).


      Ordinarily, for accounts redeemed by a broker-dealer under this procedure,
payment will be made within three business days after the shares have been
redeemed upon the Distributor's receipt of the required redemption documents in
proper form. The signature(s) of the registered owners on the redemption
documents must be guaranteed as described in the Prospectus.

Automatic Withdrawal and Exchange Plans. Investors owning shares of a Fund
valued at $5,000 or more can authorize the Transfer Agent to redeem shares
(having a value of at least $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan. Shares will be
redeemed three business days prior to the date requested by the shareholder for
receipt of the payment. Automatic withdrawals of up to $1,500 per month may be
requested by telephone if payments are to be made by check payable to all
shareholders of record. Payments must also be sent to the address of record for
the account and the address must not have been changed within the prior 30 days.
Required minimum distributions from OppenheimerFunds-sponsored retirement plans
may not be arranged on this basis.

      Payments are normally made by check, but shareholders having AccountLink
privileges (see "How To Buy Shares") may arrange to have Automatic Withdrawal
Plan payments transferred to the bank account designated on the account
application or by signature-guaranteed instructions sent to the Transfer Agent.
Shares are normally redeemed pursuant to an Automatic Withdrawal Plan three
business days before the payment transmittal date you select in the account
application. If a contingent deferred sales charge applies to the redemption,
the amount of the check or payment will be reduced accordingly.

      The Fund cannot guarantee receipt of a payment on the date requested. Each
Fund reserves the right to amend, suspend or discontinue offering these plans at
any time without prior notice. Because of the sales charge assessed on Class A
share purchases, shareholders should not make regular additional Class A share
purchases while participating in an Automatic Withdrawal Plan. Class B, Class C
and Class N shareholders should not establish automatic withdrawal plans,
because of the potential imposition of the contingent deferred sales charge on
such withdrawals (except where the Class B, Class C or Class N contingent
deferred sales charge is waived as described in Appendix C to this Statement of
Additional Information).


      By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions that apply to such plans, as stated below.
These provisions may be amended from time to time by the Funds and/or the
Distributor. When adopted, any amendments will automatically apply to existing
Plans.


      |X| Automatic Exchange Plans. Shareholders can authorize the Transfer
Agent to exchange a pre-determined amount of shares of a Fund for shares (of the
same class) of other Oppenheimer funds automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Exchange Plan. The minimum amount
that may be exchanged to each other fund account is $50. Instructions should be
provided on the OppenheimerFunds Application or signature-guaranteed
instructions. Exchanges made under these plans are subject to the restrictions
that apply to exchanges as set forth in "How to Exchange Shares" in the
Prospectus and below in this Statement of Additional Information.

      |X| Automatic Withdrawal Plans. Fund shares will be redeemed as necessary
to meet withdrawal payments. Shares acquired without a sales charge will be
redeemed first. Shares acquired with reinvested dividends and capital gains
distributions will be redeemed next, followed by shares acquired with a sales
charge, to the extent necessary to make withdrawal payments. Depending upon the
amount withdrawn, the investor's principal may be depleted. Payments made under
these plans should not be considered as a yield or income on your investment.


      The Transfer Agent will administer the investor's Automatic Withdrawal
Plan as agent for the shareholder(s) (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent. Neither a Fund
nor the Transfer Agent shall incur any liability to the Planholder for any
action taken or not taken by the Transfer Agent in good faith to administer the
Plan. Share certificates will not be issued for shares of a Fund purchased for
and held under the Plan, but the Transfer Agent will credit all such shares to
the account of the Planholder on the records of the Fund. Any share certificates
held by a Planholder may be surrendered unendorsed to the Transfer Agent with
the Plan application so that the shares represented by the certificate may be
held under the Plan.

      For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of a Fund, which will be done at net
asset value without a sales charge. Dividends on shares held in the account may
be paid in cash or reinvested.

      Shares will be redeemed to make withdrawal payments at the net asset value
per share determined on the redemption date. Checks or AccountLink payments
representing the proceeds of Plan withdrawals will normally be transmitted three
business days prior to the date selected for receipt of the payment, according
to the choice specified in writing by the Planholder. Receipt of payment on the
date selected cannot be guaranteed.


      The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent. The
Planholder should allow at least two weeks' time after mailing such notification
for the requested change to be put in effect. The Planholder may, at any time,
instruct the Transfer Agent by written notice to redeem all, or any part of, the
shares held under the Plan. That notice must be in proper form in accordance
with the requirements of the then-current Prospectus of the Funds. In that case,
the Transfer Agent will redeem the number of shares requested at the net asset
value per share in effect and will mail a check for the proceeds to the
Planholder.


      The Planholder may terminate a Plan at any time by writing to the Transfer
Agent. A Fund may also give directions to the Transfer Agent to terminate a
Plan. The Transfer Agent will also terminate a Plan upon its receipt of evidence
satisfactory to it that the Planholder has died or is legally incapacitated.
Upon termination of a Plan by the Transfer Agent or a Fund, shares that have not
been redeemed will be held in uncertificated form in the name of the Planholder.
The account will continue as a dividend-reinvestment, uncertificated account
unless and until proper instructions are received from the Planholder, his or
her executor or guardian, or another authorized person.

      To use shares held under the Plan as collateral for a debt, the Planholder
may request issuance of a portion of the shares in certificated form. Upon
written request from the Planholder, the Transfer Agent will determine the
number of shares for which a certificate may be issued without causing the
withdrawal checks to stop. However, should such uncertificated shares become
exhausted, Plan withdrawals will terminate.

      If the Transfer Agent ceases to act as transfer agent for a Fund, the
Planholder will be deemed to have appointed any successor transfer agent to act
as agent in administering the Plan.

How to Exchange Shares


As stated in the Prospectus, shares of a particular class of Oppenheimer funds
having more than one class of shares may be exchanged only for shares of the
same class of other Oppenheimer funds. Shares of Oppenheimer funds that have a
single class without a class designation are deemed "Class A" shares for this
purpose. You can obtain a current list showing which funds offer which classes
of shares by calling the Distributor.

o     All of the Oppenheimer funds currently offer Class A, B, C, N and Y shares
      with the following exceptions:

      The following funds only offer Class A shares:
Centennial America Fund, L.P.             Centennial New York Tax Exempt Trust
Centennial California Tax Exempt Trust    Centennial Tax Exempt Trust
      Centennial Government Trust           Oppenheimer Money Market Fund, Inc.
      Centennial Money Market Trust

      The following funds do not offer Class N shares:
      Oppenheimer AMT-Free New York          Oppenheimer Pennsylvania Municipal
      Municipals                             Fund
      Oppenheimer California Municipal Fund  Oppenheimer Rochester National
                                             Municipals
      Oppenheimer Limited Term Municipal     Oppenheimer Senior Floating Rate
      Fund                                   Fund
      Oppenheimer Municipal Bond Fund        Limited Term New York Municipal Fund
      Oppenheimer New Jersey Municipal Fund  Rochester Fund Municipals

      The following funds do not offer Class Y shares:
      Oppenheimer AMT-Free New York           Oppenheimer Limited Term Municipal
      Municipals                              Fund
      Oppenheimer California Municipal Fund   Oppenheimer Multiple Strategies Fund
      Oppenheimer Capital Income Fund         Oppenheimer New Jersey Municipal Fund
      Oppenheimer Cash Reserves               Oppenheimer Pennsylvania Municipal
                                              Fund
      Oppenheimer Champion Income Fund        Oppenheimer Quest Capital Value
                                              Fund, Inc.
      Oppenheimer Convertible Securities Fund Oppenheimer Quest Global Value Fund,
                                              Inc.
      Oppenheimer Disciplined Allocation Fund Oppenheimer Rochester National
                                              Municipals
      Oppenheimer Developing Markets Fund Oppenheimer Senior Floating Rate Fund
      Oppenheimer Gold & Special Minerals Oppenheimer Small Cap Value Fund Fund
      Oppenheimer International Bond Fund Oppenheimer Total Return Bond Fund
      Oppenheimer International Growth Fund Limited Term New York Municipal Fund
      Oppenheimer International Small Company Fund

o     Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
      shares of any other fund.

o     Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
      generally available only by exchange from the same class of shares of
      other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
      plans.
o     Class M shares of Oppenheimer Convertible Securities Fund may be exchanged
      only for Class A shares of other Oppenheimer funds. They may not be
      acquired by exchange of shares of any class of any other Oppenheimer funds
      except Class A shares of Oppenheimer Money Market Fund or Oppenheimer Cash
      Reserves acquired by exchange of Class M shares.

o     Class X shares of Limited Term New York Municipal Fund may be exchanged
      only for Class B shares of other Oppenheimer funds and no exchanges may be
      made to Class X shares.

o     Shares of Oppenheimer Capital Preservation Fund may not be exchanged for
      shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash Reserves
      or Oppenheimer Limited-Term Government Fund. Only participants in certain
      retirement plans may purchase shares of Oppenheimer Capital Preservation
      Fund, and only those participants may exchange shares of other Oppenheimer
      funds for shares of Oppenheimer Capital Preservation Fund.
o     Class A shares of Oppenheimer Senior Floating Rate Fund are not available
      by exchange of shares of Oppenheimer Money Market Fund or Class A shares
      of Oppenheimer Cash Reserves.
   Shares of Oppenheimer Select Managers Mercury Advisors S&P 500 Index Fund
   and Oppenheimer Select Managers QM Active Balanced Fund are only available to
      retirement plans and are available only by exchange from the same class of
      shares of other Oppenheimer funds held by retirement plans.
   Class A shares of Oppenheimer funds may be exchanged at net asset value for
      shares of any money market fund offered by the Distributor. Shares of any
      money market fund purchased without a sales charge may be exchanged for
      shares of Oppenheimer funds offered with a sales charge upon payment of
      the sales charge. They may also be used to purchase shares of Oppenheimer
      funds subject to an early withdrawal charge or contingent deferred sales
      charge.
   Shares of Oppenheimer Money Market Fund, Inc. purchased with the redemption
      proceeds of shares of other mutual funds (other than funds managed by the
      Manager or its subsidiaries) redeemed within the 30 days prior to that
      purchase may subsequently be exchanged for shares of other Oppenheimer
      funds without being subject to an initial sales charge or contingent
      deferred sales charge. To qualify for that privilege, the investor or the
      investor's dealer must notify the Distributor of eligibility for this
      privilege at the time the shares of Oppenheimer Money Market Fund, Inc.
      are purchased. If requested, they must supply proof of entitlement to this
      privilege.
o     Shares of the Fund acquired by reinvestment of dividends or distributions
      from any of the other Oppenheimer funds or from any unit investment trust
      for which reinvestment arrangements have been made with the Distributor
      may be exchanged at net asset value for shares of any of the Oppenheimer
      funds.


      The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by applicable
law. It may be required to provide 60 days' notice prior to materially amending
or terminating the exchange privilege. That 60 day notice is not required in
extraordinary circumstances.

      |X| How Exchanges Affect Contingent Deferred Sales Charges. No contingent
deferred sales charge is imposed on exchanges of shares of any class purchased
subject to a contingent deferred sales charge, with the following exceptions:

o When Class A shares of any Oppenheimer fund (other than Rochester National
Municipals and Rochester Fund Municipals) acquired by exchange of Class A shares
of any Oppenheimer fund purchased subject to a Class A contingent deferred sales
charge are redeemed within 18 months measured from the beginning of the calendar
month of the initial purchase of the exchanged Class A shares, the Class A
contingent deferred sales charge is imposed on the redeemed shares.

o When Class A shares of Rochester National Municipals and Rochester Fund
Municipals acquired by exchange of Class A shares of any Oppenheimer fund
purchased subject to a Class A contingent deferred sales charge are redeemed
within 24 months of the beginning of the calendar month of the initial purchase
of the exchanged Class A shares, the Class A contingent deferred sales charge is
imposed on the redeemed shares.

o If any Class A shares of another Oppenheimer fund that are exchanged for Class
A shares of Oppenheimer Senior Floating Rate Fund are subject to the Class A
contingent deferred sales charge of the other Oppenheimer fund at the time of
exchange, the holding period for that Class A contingent deferred sales charge
will carry over to the Class A shares of Oppenheimer Senior Floating Rate Fund
acquired in the exchange. The Class A shares of Oppenheimer Senior Floating Rate
Fund acquired in that exchange will be subject to the Class A Early Withdrawal
Charge of Oppenheimer Senior Floating Rate Fund if they are repurchased before
the expiration of the holding period.

o When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money Market
Fund, Inc. acquired by exchange of Class A shares of any Oppenheimer fund
purchased subject to a Class A contingent deferred sales charge are redeemed
within the Class A holding period of the fund from which the shares were
exchanged, the Class A contingent deferred sales charge of the fund from which
the shares were exchanged is imposed on the redeemed shares.

o With respect to Class B shares, the Class B contingent deferred sales charge
is imposed on Class B shares acquired by exchange if they are redeemed within
six years of the initial purchase of the exchanged Class B shares.

o With respect to Class C shares, the Class C contingent deferred sales charge
is imposed on Class C shares acquired by exchange if they are redeemed within 12
months of the initial purchase of the exchanged Class C shares.


         With respect to Class N shares, a 1% contingent deferred sales charge
will be imposed if the retirement plan (not including IRAs and 403(b) plans) is
terminated or Class N shares of all Oppenheimer funds are terminated as an
investment option of the plan and Class N shares are redeemed within 18 months
after the plan's first purchase of Class N shares of any Oppenheimer fund or
with respect to an individual retirement plan or 403(b) plan, Class N shares are
redeemed within 18 months of the plan's first purchase of Class N shares of any
Oppenheimer fund.

o When Class B, Class C or Class N shares are redeemed to effect an exchange,
the priorities described in "How To Buy Shares" in the Prospectus for the
imposition of the Class B, Class C or Class N contingent deferred sales charge
will be followed in determining the order in which the shares are exchanged.
Before exchanging shares, shareholders should take into account how the exchange
may affect any contingent deferred sales charge that might be imposed in the
subsequent redemption of remaining shares.

      Shareholders owning shares of more than one class must specify which class
of shares they wish to exchange.

      |X| Limits on Multiple Exchange Orders. Each Fund reserves the right to
reject telephone or written exchange requests submitted in bulk by anyone on
behalf of more than one account. Each Fund may accept requests for exchanges of
up to 50 accounts per day from representatives of authorized dealers that
qualify for this privilege.


      |X| Telephone Exchange Requests. When exchanging shares by telephone, a
shareholder must have an existing account in the fund to which the exchange is
to be made. Otherwise, the investors must obtain a prospectus of that fund
before the exchange request may be submitted. If all telephone lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by telephone
and would have to submit written exchange requests.


      |X| Processing Exchange Requests. Shares to be exchanged are redeemed on
the regular business day the Transfer Agent receives an exchange request in
proper form (the "Redemption Date"). Normally, shares of the fund to be acquired
are purchased on the Redemption Date, but such purchases may be delayed by
either fund up to five business days if it determines that it would be
disadvantaged by an immediate transfer of the redemption proceeds. Each Fund
reserves the right, in its discretion, to refuse any exchange request that may
disadvantage it. For example, if the receipt of multiple exchange requests from
a dealer might require the disposition of portfolio securities at a time or at a
price that might be disadvantageous to the Fund, the Fund may refuse the
request.


      When you exchange some or all of your shares from one fund to another, any
special account feature such as an Asset Builder Plan or Automatic Withdrawal
Plan, will be switched to the new fund account unless you tell the Transfer
Agent not to do so. However, special redemption and exchange features such as
Automatic Exchange Plans and Automatic Withdrawal Plans cannot be switched to an
account in Oppenheimer Senior Floating Rate Fund.


      In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information, or would include shares covered by a share
certificate that is not tendered with the request. In those cases, only the
shares available for exchange without restriction will be exchanged.

      The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that the
fund selected is appropriate for his or her investment and should be aware of
the tax consequences of an exchange. For federal income tax purposes, an
exchange transaction is treated as a redemption of shares of one fund and a
purchase of shares of another. "Reinvestment Privilege," above, discusses some
of the tax consequences of reinvestment of redemption proceeds in such cases.
Each Fund, the Distributor, and the Transfer Agent are unable to provide
investment, tax or legal advice to a shareholder in connection with an exchange
request or any other investment transaction.

Dividends, Capital Gains and Taxes

Dividends and Distributions. Each Fund has no fixed dividend rate and there can
be no assurance as to the payment of any dividends or the realization of any
capital gains. The dividends and distributions paid by a class of shares will
vary from time to time depending on market conditions, the composition of each
Fund's portfolio, and expenses borne by a Fund or borne separately by a class.
Dividends are calculated in the same manner, at the same time, and on the same
day for each class of shares. However, dividends on Class B, Class C and Class N
shares are expected to be lower than dividends on Class A and Class Y shares.
That is because of the effect of the asset-based sales charge on Class B, Class
C and Class N shares. Those dividends will also differ in amount as a
consequence of any difference in the net asset values of the different classes
of shares.

      Dividends, distributions and proceeds of the redemption of each Fund
shares represented by checks returned to the Transfer Agent by the Postal
Service as undeliverable will be invested in shares of Oppenheimer Money Market
Fund, Inc. Reinvestment will be made as promptly as possible after the return of
such checks to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to state escheatment
laws, and each Fund and the Transfer Agent will not be liable to shareholders or
their representatives for compliance with those laws in good faith.


Tax Status of the Funds' Dividends, Distributions and Redemptions of Shares. The
federal tax treatment of the Funds' dividends and capital gains distributions is
briefly highlighted in the Prospectus. The following is only a summary of
certain additional tax considerations generally affecting each Fund and its
shareholders.


      The tax discussion in the Prospectus and this Statement of Additional
Information is based on tax law in effect on the date of the Prospectus and this
Statement of Additional Information. Those laws and regulations may be changed
by legislative, judicial, or administrative action, sometimes with retroactive
effect. State and local tax treatment of ordinary income dividends and capital
gain dividends from regulated investment companies may differ from the treatment
under the Internal Revenue Code described below. Potential purchasers of shares
of the Fund are urged to consult their tax advisers with specific reference to
their own tax circumstances as well as the consequences of federal, state and
local tax rules affecting an investment in the Fund.


      |X| Qualification as a Regulated Investment Company. Each Fund has elected
to be taxed as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. As a regulated investment company, the Fund is
not subject to federal income tax on the portion of its net investment income
(that is, taxable interest, dividends, and other taxable ordinary income, net of
expenses) and capital gain net income (that is, the excess of net long-term
capital gains over net short-term capital losses) that it distributes to
shareholders. That qualification enables the Fund to "pass through" its income
and realized capital gains to shareholders without having to pay tax on them.
This avoids a "double tax" on that income and capital gains, since shareholders
normally will be taxed on the dividends and capital gains they receive from a
Fund (unless their Fund shares are held in a retirement account or the
shareholder is otherwise exempt from tax).

      The Internal Revenue Code contains a number of complex tests relating to
qualification that a Fund might not meet in a particular year. If it did not
qualify as a regulated investment company, a Fund would be treated for tax
purposes as an ordinary corporation and would receive no tax deduction for
payments made to shareholders.

      To qualify as a regulated investment company, a Fund must distribute at
least 90% of its investment company taxable income (in brief, net investment
income and the excess of net short-term capital gain over net long-term capital
loss) for the taxable year. A Fund must also satisfy certain other requirements
of the Internal Revenue Code, some of which are described below. Distributions
by a Fund made during the taxable year or, under specified circumstances, within
12 months after the close of the taxable year, will be considered distributions
of income and gains for the taxable year and will therefore count toward
satisfaction of the above-mentioned requirement.

      To qualify as a regulated investment company, a Fund must derive at least
90% of its gross income from dividends, interest, certain payments with respect
to securities loans, gains from the sale or other disposition of stock or
securities or foreign currencies (to the extent such currency gains are directly
related to the regulated investment company's principal business of investing in
stock or securities) and certain other income.

      In addition to satisfying the requirements described above, a Fund must
satisfy an asset diversification test in order to qualify as a regulated
investment company. Under that test, at the close of each quarter of a Fund's
taxable year, at least 50% of the value of a Fund's assets must consist of cash
and cash items (including receivables), U.S. government securities, securities
of other regulated investment companies, and securities of other issuers. As to
each of those issuers, a Fund must not have invested more than 5% of the value
of a Fund's total assets in securities of each such issuer and a Fund must not
hold more than 10% of the outstanding voting securities of each such issuer. No
more than 25% of the value of its total assets may be invested in the securities
of any one issuer (other than U.S. government securities and securities of other
regulated investment companies), or in two or more issuers which the Fund
controls and which are engaged in the same or similar trades or businesses. For
purposes of this test, obligations issued or guaranteed by certain agencies or
instrumentalities of the U.S. government are treated as U.S. government
securities.

      |X| Excise Tax on Regulated Investment Companies. Under the Internal
Revenue Code, by December 31 each year, a Fund must distribute 98% of its
taxable investment income earned from January 1 through December 31 of that year
and 98% of its capital gains realized in the period from November 1 of the prior
year through October 31 of the current year. If it does not, a Fund must pay an
excise tax on the amounts not distributed. It is presently anticipated that the
Funds will meet those requirements. To meet this requirement, in certain
circumstances a Fund might be required to liquidate portfolio investments to
make sufficient distributions to avoid excise tax liability. However, the Board
of Trustees and the Manager might determine in a particular year that it would
be in the best interests of shareholders for a Fund not to make such
distributions at the required levels and to pay the excise tax on the
undistributed amounts. That would reduce the amount of income or capital gains
available for distribution to shareholders.

      |X| Taxation of Fund Distributions. A Fund anticipates distributing
substantially all of its investment company taxable income for each taxable
year. Those distributions will be taxable to shareholders as ordinary income and
treated as dividends for federal income tax purposes.

      Special provisions of the Internal Revenue Code govern the eligibility of
a Fund's dividends for the dividends-received deduction for corporate
shareholders. Long-term capital gains distributions are not eligible for the
deduction. The amount of dividends paid by a Fund that may qualify for the
deduction is limited to the aggregate amount of qualifying dividends that a Fund
derives from portfolio investments that the Fund has held for a minimum period,
usually 46 days. A corporate shareholder will not be eligible for the deduction
on dividends paid on Fund shares held for 45 days or less. To the extent a
Fund's dividends are derived from gross income from option premiums, interest
income or short-term gains from the sale of securities or dividends from foreign
corporations, those dividends will not qualify for the deduction.

      The Fund may either retain or distribute to shareholders its net capital
gain for each taxable year. The Fund currently intends to distribute any such
amounts. If net long term capital gains are distributed and designated as a
capital gain distribution, it will be taxable to shareholders as a long-term
capital gain and will be properly identified in reports sent to shareholders in
January of each year. Such treatment will apply no matter how long the
shareholder has held his or her shares or whether that gain was recognized by
the Fund before the shareholder acquired his or her shares.

      If the Fund elects to retain its net capital gain, the Fund will be
subject to tax on it at the 35% corporate tax rate. If the Fund elects to retain
its net capital gain, the Fund will provide to shareholders of record on the
last day of its taxable year information regarding their pro rata share of the
gain and tax paid. As a result, each shareholder will be required to report his
or her pro rata share of such gain on their tax return as long-term capital
gain, will receive a refundable tax credit for his/her pro rata share of tax
paid by the Fund on the gain, and will increase the tax basis for his/her shares
by an amount equal to the deemed distribution less the tax credit.


      Investment income that may be received by the Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries which
entitle the Fund to a reduced rate of, or exemption from, taxes on such income.

      Distributions by the Fund that do not constitute ordinary income dividends
or capital gain distributions will be treated as a return of capital to the
extent of the shareholder's tax basis in their shares. Any excess will be
treated as gain from the sale of those shares, as discussed below. Shareholders
will be advised annually as to the U.S. federal income tax consequences of
distributions made (or deemed made) during the year. If prior distributions made
by the Fund must be re-characterized as a non-taxable return of capital at the
end of the fiscal year as a result of the effect of the Fund's investment
policies, they will be identified as such in notices sent to shareholders.

      Distributions by the Fund will be treated in the manner described above
regardless of whether the distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares received,
determined as of the reinvestment date.


      The Fund will be required in certain cases to withhold 30% (29% for
payments after December 31, 2003) of ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any
shareholder (1) who has failed to provide a correct taxpayer identification
number or to properly certify that number when required, (2) who is subject to
backup withholding for failure to report the receipt of interest or dividend
income properly, or (3) who has failed to certify to the Fund that the
shareholder is not subject to backup withholding or is an "exempt recipient"
(such as a corporation). All income and any tax withheld by the Fund is remitted
by the Fund to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.

      |X| Tax Effects of Redemptions of Shares. If a shareholder redeems all or
a portion of his/her shares, the shareholder will recognize a gain or loss on
the redeemed shares in an amount equal to the difference between the proceeds of
the redeemed shares and the shareholder's adjusted tax basis in the shares. All
or a portion of any loss recognized in that manner may be disallowed if the
shareholder purchases other shares of the Fund within 30 days before or after
the redemption.


      In general, any gain or loss arising from the redemption of shares of the
Fund will be considered capital gain or loss, if the shares were held as a
capital asset. It will be long-term capital gain or loss if the shares were held
for more than one year. However, any capital loss arising from the redemption of
shares held for six months or less will be treated as a long-term capital loss
to the extent of the amount of capital gain dividends received on those shares.
Special holding period rules under the Internal Revenue Code apply in this case
to determine the holding period of shares and there are limits on the
deductibility of capital losses in any year.


      |X| Foreign Shareholders. Under U.S. tax law, taxation of a shareholder
who is a foreign person (to include, but not limited to, a nonresident alien
individual, a foreign trust, a foreign estate, a foreign corporation, or a
foreign partnership) primarily depends on whether the foreign person's income
from the Fund is effectively connected with the conduct of a U.S. trade or
business. Typically, ordinary income dividends paid from a mutual fund are not
considered "effectively connected" income.

      Ordinary income dividends that are paid by the Fund (and are deemed not
"effectively connected income") to foreign persons will be subject to a U.S. tax
withheld by the Fund at a rate of 30%, provided the Fund obtains a properly
completed and signed Certificate of Foreign Status. The tax rate may be reduced
if the foreign person's country of residence has a tax treaty with the U.S.
allowing for a reduced tax rate on ordinary income dividends paid by the Fund.
All income and any tax withheld by the Fund is remitted by the Fund to the U.S.
Treasury and is identified in reports mailed to shareholders in March of each
year.

      If the ordinary income dividends from the Fund are effectively connected
with the conduct of a U.S. trade or business, then the foreign person may claim
an exemption from the U.S. tax described above provided the Fund obtains a
properly completed and signed Certificate of Foreign Status.

      If the foreign person fails to provide a certification of his/her foreign
status, the Fund will be required to withhold U.S. tax at a rate of 30% (29% for
payments after December 31, 2003) on ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any foreign
person. All income and any tax withheld (in this situation) by the Fund is
remitted by the Fund to the U.S. Treasury and is identified in reports mailed to
shareholders in January of each year.

      The tax consequences to foreign persons entitled to claim the benefits of
an applicable tax treaty may be different from those described herein. Foreign
shareholders are urged to consult their own tax advisors or the U.S. Internal
Revenue Service with respect to the particular tax consequences to them of an
investment in the Funds, including the applicability of the U.S. withholding
taxes described above.


Dividend Reinvestment in Another Fund. Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the same
class of any of the other Oppenheimer funds listed above. Reinvestment will be
made without sales charge at the net asset value per share in effect at the
close of business on the payable date of the dividend or distribution. To elect
this option, the shareholder must notify the Transfer Agent in writing and must
have an existing account in the fund selected for reinvestment. Otherwise the
shareholder first must obtain a prospectus for that fund and an application from
the Distributor to establish an account. Dividends and/or distributions from
shares of certain other Oppenheimer funds (other than Oppenheimer Cash Reserves)
may be invested in shares of these Funds on the same basis.

Additional Information About the Fund


The Distributor. Each Fund's shares are sold through dealers, brokers and other
financial institutions that have a sales agreement with OppenheimerFunds
Distributor, Inc., a subsidiary of the Manager that acts as the Funds'
Distributor. The Distributor also distributes shares of the other Oppenheimer
funds and is sub-distributor for funds managed by a subsidiary of the Manager.

The Transfer Agent. OppenheimerFunds Services, the Funds' Transfer Agent, is a
division of the Manager. It is responsible for maintaining the Funds'
shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders. It also handles shareholder
servicing and administrative functions. It serves as the Transfer Agent for an
annual per account fee. It also acts as shareholder servicing agent for the
other Oppenheimer funds. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free numbers shown on the
back cover.

The Custodian. Citibank, N.A. is the custodian of each Fund's assets. The
custodian's responsibilities include safeguarding and controlling each Fund's
portfolio securities and handling the delivery of such securities to and from
each Fund. It is the practice of each Fund to deal with the custodian in a
manner uninfluenced by any banking relationship the custodian may have with the
Manager and its affiliates. Each Fund's cash balances with the custodian in
excess of $100,000 are not protected by federal deposit insurance. Those
uninsured balances at times may be substantial.

Independent Auditors. Deloitte & Touche, LLP are the independent auditors of
each Fund. They audit each Fund's financial statements and perform other related
audit services. They also act as auditors for [the Manager and for certain other
funds advised by the Manager and its affiliates.


License Agreement. Under a separate agreement, Merrill Lynch affiliates have
granted the Trust, on behalf of the OSM - Mercury Advisors S&P 500 Index Fund
and the OSM - Mercury Advisors Focus Growth Fund, the right to use the "Mercury"
name and has reserved the right to withdraw its consent to the use of such name
by either Fund under certain circumstances or to grant the use of such name to
any other company.


Financial Statements. The audited financial statements for the Master Focus
Twenty Trust are incorporated in this Statement of Additional Information by
reference to the 2002 annual report to shareholders of Mercury Focus Twenty
Fund, Inc. You may request a copy of that annual report at no charge by calling
888.763.2260 between 8:00 a.m. and 8:00 p.m. Eastern time on any business day.
The audited financial statements for the Quantitative Master Series Trust -
Master S&P 500 Index Series are incorporated in this Statement of Additional
Information by reference to the 2002 annual report to shareholders of the
Quantitative Master Series Trust - Master S&P 500 Index Series, and the
unaudited financial statements for the Quantitative Master Series Trust - Master
S&P 500 Index Series are incorporated in this Statement of Additional
Information by reference to the June 30, 2002 semi-annual report to shareholders
of the Quantitative Master Series Trust - Master S&P 500 Index Series. You
may request a copy of that annual and semi-annual report at no charge by calling
888.763.2260 between 8:00 a.m. and 8:00 p.m. Eastern time on any business day.





INDEPENDENT AUDITORS' REPORT

================================================================================
 To the Board of Trustees and Shareholders of Oppenheimer Select Managers
 Mercury Advisors Focus Growth Fund: We have audited the accompanying statement
 of assets and liabilities of Oppenheimer Select Managers Mercury Advisors Focus
 Growth Fund, which is a series of Oppenheimer Select Managers, as of November
 30, 2002, and the related statement of operations for the year then ended, the
 statements of changes in net assets and the financial highlights for the
 periods indicated. These financial statements and financial highlights are the
 responsibility of the Fund's management. Our responsibility is to express an
 opinion on these financial statements and financial highlights based on our
 audits.
    We conducted our audits in accordance with auditing standards generally
 accepted in the United States of America. Those standards require that we plan
 and perform the audit to obtain reasonable assurance about whether the
 financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence supporting
 the amounts and disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates made by
 management, as well as evaluating the overall financial statement presentation.
 We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the financial statements and financial highlights referred
 to above present fairly, in all material respects, the financial position of
 Oppenheimer Select Managers Mercury Advisors Focus Growth Fund as of November
 30, 2002, the results of its operations for the year then ended, the changes in
 its net assets and the financial highlights for the periods indicated, in
 conformity with accounting principles generally accepted in the United States
 of America.



 /s/ Deloitte & Touche LLP
 -------------------------
 Deloitte & Touche LLP

 Denver, Colorado
 January 22, 2003



       16 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND


STATEMENT OF ASSETS AND LIABILITIES  November 30, 2002

=============================================================================
 Assets
 Investment in Master Focus Twenty Trust                         $ 3,125,102
- -----------------------------------------------------------------------------
 Receivables and other assets:
 Shares of beneficial interest sold                                   1,513
 Other                                                                7,683
                                                                 ------------
 Total assets                                                     3,134,298

=============================================================================
 Liabilities Payables and other liabilities:
 Shares of beneficial interest redeemed                              12,093
 Legal, auditing and other professional fees                          8,781
 Transfer and shareholder servicing agent fees                        1,231
 Distribution and service plan fees                                   1,167
 Trustees' compensation                                                 324
 Other                                                                1,129
                                                                 ------------
 Total liabilities                                                   24,725

=============================================================================
 Net Assets                                                      $3,109,573
                                                                 ============

=============================================================================
 Composition of Net Assets
 Paid-in capital                                                 $4,818,511
- -----------------------------------------------------------------------------
 Accumulated net realized loss on investment transactions        (1,866,551)
- -----------------------------------------------------------------------------
 Net unrealized appreciation on investments                         157,613
                                                                 ------------
 Net Assets                                                      $3,109,573
                                                                 ============



       6 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND



================================================================================
 Net Asset Value Per Share
  Class A Shares: Net asset value and redemption price per share (based on
 net assets of $1,591,147 and 630,670 shares of beneficial interest outstanding)
 $2.52 Maximum offering price per share (net asset value plus sales charge of
 5.75% of offering price) $2.67
- --------------------------------------------------------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price
 per share (based on net assets of $788,283 and 316,640 shares of beneficial interest outstanding)                        $2.49
- --------------------------------------------------------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price
 per share (based on net assets of $658,117 and 264,479 shares of beneficial interest outstanding)                        $2.49
- --------------------------------------------------------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price
 per share (based on net assets of $71,773 and 28,511 shares of beneficial interest outstanding)                          $2.52
- --------------------------------------------------------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share (based on net assets of $253 and
 100 shares of beneficial interest outstanding)                                                                           $2.53




 See accompanying Notes to Financial Statements.




       7 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND

STATEMENT OF OPERATIONS  For the Year Ended November 30, 2002

============================================================================
 Net Investment Loss Allocated from Master Focus Twenty Trust

============================================================================
 Investment Income                                              $     7,718

============================================================================
 Expenses                                                            21,049

============================================================================
 Net Investment Loss Allocated from Master Focus Twenty Trust       (13,331)

 Fund Income and Expenses
============================================================================
 Investment Income
 Interest income from short-term obligations                             11

============================================================================
 Expenses
 Distribution and service plan fees:
 Class A                                                              3,383
 Class B                                                              8,635
 Class C                                                              4,529
 Class N                                                                257
- ----------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                              6,797
 Class B                                                              4,485
 Class C                                                              2,205
 Class N                                                                339
 Class Y                                                                865
- ----------------------------------------------------------------------------
 Administrative fees                                                 13,841
- ----------------------------------------------------------------------------
 Legal, auditing and other professional fees                          9,624
- ----------------------------------------------------------------------------
 Shareholder reports                                                  5,193
- ----------------------------------------------------------------------------
 Trustees' compensation                                               4,036
- ----------------------------------------------------------------------------
 Custodian fees and expenses                                              6
- ----------------------------------------------------------------------------
 Other                                                                2,693
                                                                ------------
 Total expenses                                                      66,888
 Less voluntary reimbursement of expenses                           (25,297)
 Less voluntary waiver of transfer and shareholder servicing
    agent fees--Classes A, B, C and N                                (3,353)
 Less voluntary waiver of transfer and shareholder
    servicing agent fees--Class Y                                      (865)
                                                                ------------
 Net expenses                                                        37,373

============================================================================
 Net Investment Loss                                                (50,693)

============================================================================
 Realized and Unrealized Loss Allocated from Master Focus Twenty Trust
 Net realized loss on investments                                (1,359,626)
- ----------------------------------------------------------------------------
 Net change in unrealized appreciation on investments               146,859
                                                                ------------
 Net realized and unrealized loss                                (1,212,767)

============================================================================
 Net Decrease in Net Assets Resulting from Operations           $(1,263,460)
                                                                ============



 See accompanying Notes to Financial Statements.








       8 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND

STATEMENTS OF CHANGES IN NET ASSETS




 Year Ended November 30,                                                                       2002          2001 1
======================================================================================================================
 Operations

 Net investment loss                                                                     $  (50,693)     $  (12,445)
- ----------------------------------------------------------------------------------------------------------------------
 Net realized loss                                                                       (1,359,626)       (506,925)
- ----------------------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation                                                      146,859          10,754
                                                                                         -----------------------------
 Net decrease in net assets resulting from operations                                    (1,263,460)       (508,616)

======================================================================================================================
 Beneficial Interest Transactions
 Net increase in net assets resulting from beneficial interest transactions:
 Class A                                                                                  1,177,797       1,301,825
 Class B                                                                                    541,064         841,255
 Class C                                                                                    542,491         363,914
 Class N                                                                                     95,080           1,223
 Class Y                                                                                         --              --

======================================================================================================================
 Net Assets
 Total increase                                                                           1,092,972       1,999,601
- ----------------------------------------------------------------------------------------------------------------------
 Beginning of period                                                                      2,016,601          17,000 2
                                                                                         -----------------------------
 End of period                                                                           $3,109,573      $2,016,601
                                                                                         =============================




1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Reflects the value of the Manager's initial seed money investment at
December 22, 2000.



 See accompanying Notes to Financial Statements.





       9 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND

FINANCIAL HIGHLIGHTS



                                                                   Class A                     Class B                   Class C
                                                                Year Ended                  Year Ended                Year Ended
                                                                  Nov. 30,                    Nov. 30,                  Nov. 30,
                                                         2002       2001 1           2002       2001 1          2002      2001 1
====================================================================================================================================
 Per Share Operating Data

 Net asset value, beginning of period                  $ 3.95        $10.00         $3.92       $10.00         $3.92      $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                     (.04)         (.02)         (.06)        (.03)         (.04)       (.03)
 Net realized and unrealized loss                       (1.39)        (6.03)        (1.37)       (6.05)        (1.39)      (6.05)
                                                       -----------------------------------------------------------------------------
 Total from investment operations                       (1.43)        (6.05)        (1.43)       (6.08)        (1.43)      (6.08)
- ------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                        $ 2.52        $ 3.95         $2.49       $ 3.92         $2.49      $ 3.92
                                                       =============================================================================

====================================================================================================================================
 Total Return, at Net Asset Value 2                    (36.20)%      (60.50)%      (36.48)%     (60.80)%      (36.48)%    (60.80)%

====================================================================================================================================
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)              $1,591        $1,048          $788         $667          $658        $300
- ------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                     $1,402        $  444          $864         $305          $454        $114
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                    (1.47)%       (1.45)%       (2.22)%      (2.21)%       (2.21)%     (2.23)%
 Expenses                                                2.76%         3.99%         3.56%        4.78%         3.53%       4.79%
 Expenses, net of voluntary reimbursement of
 expenses and/or waiver of transfer agent fees           1.74%         1.84%         2.53%        2.46%         2.47%       2.18%
- ------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                             275.69%       137.66%       275.69%      137.66%       275.69%     137.66%




1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.

See accompanying Notes to Financial Statements.




       10 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND




                                                                                  CLASS N                     CLASS Y
                                                                               YEAR ENDED                  YEAR ENDED
                                                                                 NOV. 30,                    NOV. 30,
                                                                       2002        2001 1          2002        2001 2
========================================================================================================================
 Per Share Operating Data

 Net asset value, beginning of period                                 $3.94         $8.28         $3.96        $10.00
- ------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                                   (.01)         (.04)         (.04)         (.05)
 Net realized and unrealized loss                                     (1.41)        (4.30)        (1.39)        (5.99)
                                                                      --------------------------------------------------
 Total from investment operations                                     (1.42)        (4.34)        (1.43)        (6.04)
- ------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                                       $2.52         $3.94         $2.53        $ 3.96
                                                                      ==================================================

========================================================================================================================
 Total Return, at Net Asset Value 3                                  (36.04)%      (52.42)%      (36.11)%      (60.40)%

========================================================================================================================
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                               $72            $1            $1 4          $1 4
- ------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                      $52            $1            $1 4          $1
- ------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 5
 Net investment loss                                                  (1.70)%       (1.06)%       (0.40)%       (0.63)%
 Expenses                                                              3.18%         4.01%        88.54%       503.44%
 Expenses, net of voluntary reimbursement of
 expenses and/or waiver of transfer agent fees                         2.12%         3.07%         1.21%         2.83%
- ------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 6                                           275.69%       137.66%       275.69%       137.66%




1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Less than $1,000.
5. Annualized for periods of less than one full year.
6. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master Focus Twenty Trust included elsewhere in this report.


See accompanying Notes to Financial Statements.




       11 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND

NOTES TO FINANCIAL STATEMENTS


================================================================================
 1. Significant Accounting Policies
 Oppenheimer Select Managers Mercury Advisors Focus Growth Fund (the Fund) is a
 separate series of Oppenheimer Select Managers, a non-diversified, open-end
 management investment company registered under the Investment Company Act of
 1940, as amended. The Fund invests substantially all of its assets in the
 Master Focus Twenty Trust (the Trust), a registered open-end investment company
 that has the same goals as the Fund. The financial statements of the Trust are
 included elsewhere in this report and should be read with the Fund's financial
 statements. The percentage of the Trust owned by the Fund at November 30, 2002
 was 1.57%. As of December 31, 2002, the total return for the Master Focus
 Twenty Fund was (34.07)%. The Fund's investment objective is to seek long-term
 capital appreciation. The Fund's administrator is OppenheimerFunds, Inc. (the
 Manager).
    The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
 A shares are sold at their offering price, which is normally net asset value
 plus a front-end sales charge. Class B, Class C and Class N shares are sold
 without a front-end sales charge but may be subject to a contingent deferred
 sales charge (CDSC). Class N shares are sold only through retirement plans.
 Retirement plans that offer Class N shares may impose charges on those
 accounts. Class Y shares are sold to certain institutional investors without
 either a front-end sales charge or a CDSC. All classes of shares have identical
 rights and voting privileges. Earnings, net assets and net asset value per
 share may differ by minor amounts due to each class having its own expenses
 directly attributable to that class. Classes A, B, C and N have separate
 distribution and/or service plans. No such plan has been adopted for Class Y
 shares. Class B shares will automatically convert to Class A shares six years
 after the date of purchase.
    The following is a summary of significant accounting policies consistently
 followed by the Fund.
- --------------------------------------------------------------------------------
 Securities Valuation. The Fund's investment in the Trust is valued based on the
 daily reported net asset value of the Trust. Valuation of securities held by
 the Trust is discussed in the notes to Master Focus Twenty Trust included
 elsewhere in this report.
- --------------------------------------------------------------------------------
 Allocation of Income, Expenses, Gains and Losses. The Fund records daily its
 proportionate share of the Trust's income, expenses and realized and unrealized
 gains and losses. In addition, the Fund accrues its own expenses. Income,
 expenses (other than those attributable to a specific class), gains and losses
 are allocated daily to each class of shares based upon the relative proportion
 of net assets represented by such class. Operating expenses directly
 attributable to a specific class are charged against the operations of that
 class.
- --------------------------------------------------------------------------------
 Federal Taxes. The Fund intends to continue to comply with provisions of the
 Internal Revenue Code applicable to regulated investment companies and to
 distribute all of its taxable income to shareholders. Therefore, no federal
 income or excise tax provision is required.
    During the fiscal year ended November 30, 2002, the Fund did not utilize any
 capital loss carryforward.

 As of November 30, 2002, the Fund had available for federal income tax purposes
 unused capital loss carryovers as follows:

                              Expiring
                              -------------------------
                              2009           $  468,169
                              2010            1,297,925
                                             ----------
                              Total          $1,766,094
                                             ==========

 As of December 31, 2002, the Fund had approximately $59,538 of post-October
 losses available to offset future capital gains, if any. Such losses, if
 unutilized, will expire in 2011.
- --------------------------------------------------------------------------------
 Dividends and Distributions to Shareholders. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
 Classification of Dividends and Distributions to Shareholders. Net investment
 income (loss) and net realized gain (loss) may differ for financial statement
 and tax purposes. The character of dividends and distributions made during the
 fiscal year from net investment income or net realized gains may differ from
 their ultimate characterization for




       12 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND




 federal income tax purposes. Also, due to timing of dividends and
 distributions, the fiscal year in which amounts are distributed may differ from
 the fiscal year in which the income or realized gain was recorded by the Fund.
    The Fund adjusts the classification of distributions to shareholders to
 reflect the differences between financial statement amounts and distributions
 determined in accordance with income tax regulations. Accordingly, during the
 year ended November 30, 2002, amounts have been reclassified to reflect a
 decrease in paid-in capital of $50,693. Accumulated net investment loss was
 decreased by the same amount. Net assets of the Fund were unaffected by the
 reclassifications.
    No distributions were paid during the year ended November 30, 2002 and the
 period ended November 30, 2001.

 As of November 30, 2002, the components of distributable earnings on a tax
 basis were as follows:

                 Accumulated net realized loss        $(1,866,551)
                 Net unrealized appreciation              157,613
                                                      -----------
                 Total                                $(1,708,938)
                                                      ===========
- --------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with generally
 accepted accounting principles in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial statements and the reported amounts of income and
 expenses during the reporting period. Actual results could differ from those
 estimates.
================================================================================
 2. Shares of Beneficial Interest
 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:



                                              Year Ended November 30, 2002      Period Ended November 30, 2001 1
                                                  Shares            Amount              Shares            Amount
- -----------------------------------------------------------------------------------------------------------------
 Class A

 Sold                                            545,912        $1,705,805             317,853        $1,545,075
 Redeemed                                       (180,980)         (528,008)            (53,515)         (243,250)
                                                -----------------------------------------------------------------
 Net increase                                    364,932        $1,177,797             264,338        $1,301,825
                                                =================================================================

- -----------------------------------------------------------------------------------------------------------------
 Class B
 Sold                                            340,922        $1,107,732             185,529        $  898,904
 Redeemed                                       (194,498)         (566,668)            (15,413)          (57,649)
                                                -----------------------------------------------------------------
 Net increase                                    146,424        $  541,064             170,116        $  841,255
                                                =================================================================

- -----------------------------------------------------------------------------------------------------------------
 Class C
 Sold                                            287,759        $  836,915              94,725        $  436,597
 Redeemed                                        (99,749)         (294,424)            (18,356)          (72,683)
                                                -----------------------------------------------------------------
 Net increase                                    188,010        $  542,491              76,369        $  363,914
                                                =================================================================

- -----------------------------------------------------------------------------------------------------------------
 Class N
 Sold                                             33,236        $  109,548                 180        $    1,223
 Redeemed                                         (4,905)          (14,468)                 --                --
                                                -----------------------------------------------------------------
 Net increase                                     28,331        $   95,080                 180        $    1,223
                                                =================================================================

- -----------------------------------------------------------------------------------------------------------------
 Class Y
 Sold                                                 --        $       --                  --        $       --
 Redeemed                                             --                --                  --                --
                                                -----------------------------------------------------------------
 Net increase (decrease)                              --        $       --                  --        $       --
                                                =================================================================

1. For the period from February 16, 2001 (inception of offering) to November 30,
2001, for Class A, B, C and Y shares and for the period from March 1, 2001
(inception of offering) to November 30, 2001, for Class N shares.


       13 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND

NOTES TO FINANCIAL STATEMENTS  Continued


================================================================================
 3. Increases and Decreases of Investments in the Trust Increases and decreases
 in the Fund's investment in the Trust for the year ended November 30, 2002,
 were $2,985,810 and $667,386, respectively.

================================================================================
 4. Fees and Other Transactions With Affiliates
 Administration Fees. Administration fees paid to the Manager were in accordance
 with the administration agreement with the Fund which provides for a fee of
 0.50% of the average annual net assets of the Fund. During the year ended
 November 30, 2002, the Fund paid $13,841 to the Manager for administrative
 services.
- --------------------------------------------------------------------------------
 Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
 Manager, acts as the transfer and shareholder servicing agent for the Fund. The
 Fund pays OFS a $19.75 per account fee.
    Additionally, Class Y shares are subject to minimum fees of $5,000 for
 assets of less than $10 million and $10,000 for assets of $10 million or more.
 The Class Y shares are subject to the minimum fees in the event that the per
 account fee does not equal or exceed the applicable minimum fees. OFS may
 voluntarily waive the minimum fees.
    OFS has voluntarily agreed to limit transfer and shareholder servicing agent
 fees up to an annual rate of 0.35% for all classes. Effective November 1, 2002,
 Class Y shares were changed from 0.25% to 0.35%. This undertaking may be
 amended or withdrawn at any time.
- --------------------------------------------------------------------------------
 Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
 Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
 Distributor) acts as the Fund's principal underwriter in the continuous public
 offering of the different classes of shares of the Fund.

 The compensation paid to (or retained by) the Distributor from the sale of
 shares or on the redemption of shares is shown in the table below for the
 period indicated.



                          Aggregate          Class A       Concessions       Concessions      Concessions       Concessions
                          Front-End        Front-End        on Class A        on Class B       on Class C        on Class N
                      Sales Charges    Sales Charges            Shares            Shares           Shares            Shares
                         on Class A      Retained by       Advanced by       Advanced by      Advanced by       Advanced by
 Year Ended                  Shares      Distributor     Distributor 1     Distributor 1    Distributor 1     Distributor 1
- ----------------------------------------------------------------------------------------------------------------------------

 November 30, 2002           $7,624           $4,188               $93            $9,049           $5,678            $1,055


1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.



                                             Class A                   Class B                   Class C                    Class N
                                 Contingent Deferred       Contingent Deferred       Contingent Deferred        Contingent Deferred
                                       Sales Charges             Sales Charges             Sales Charges              Sales Charges
                                         Retained by               Retained by               Retained by                Retained by
 Year Ended                              Distributor               Distributor               Distributor                Distributor
- ------------------------------------------------------------------------------------------------------------------------------------

 November 30, 2002                              $--                   $2,930                      $118                         $3


- --------------------------------------------------------------------------------
 Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
 A shares. It reimburses the Distributor for a portion of its costs incurred for
 services provided to accounts that hold Class A shares. Reimbursement is made
 quarterly at an annual rate of up to 0.25% of the average annual net assets of
 Class A shares of the Fund. For the year ended November 30, 2002, payments
 under the Class A Plan totaled $3,383, all of which were paid by the
 Distributor to recipients, and included $282 paid to an affiliate of the
 Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
 A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
 Distribution and Service Plans for Class B, Class C and Class N Shares. The
 Fund has adopted Distribution and Service Plans for Class B, Class C and Class
 N shares. Under the plans, the Fund pays the Distributor an annual asset-based
 sales charge of 0.75% per year on Class B shares and on Class C shares and the
 Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
 on Class N shares. The Distributor also receives a service fee of 0.25% per
 year under each plan.




       14 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS FOCUS GROWTH FUND


 Distribution fees paid to the Distributor for the year ended November 30, 2002,
 were as follows:



                                                                                                           Distributor's Aggregate
                                                                                 Distributor's Aggregate              Unreimbursed
                                      Total Payments           Amount Retained     Unreimbursed Expenses          Expenses as % of
                                          Under Plan            by Distributor                Under Plan       Net Assets of Class
- ------------------------------------------------------------------------------------------------------------------------------------

 Class B Plan                                 $8,635                    $6,884                   $60,326                      7.65%
 Class C Plan                                  4,529                     3,156                    81,033                     12.31
 Class N Plan                                    257                       230                    48,561                     67.66


================================================================================
 5. Borrowing and Lending Arrangements
 Bank Borrowings. Until November 12, 2002, the Fund had the ability to borrow
 from a bank for temporary or emergency purposes provided asset coverage for
 borrowings exceeded 300%. The Fund and other Oppenheimer funds participated in
 a $400 million unsecured line of credit with a bank. Under that unsecured line
 of credit, interest was charged to each fund, based on its borrowings, at a
 rate equal to the Federal Funds Rate plus 0.45%. Under that credit facility,
 the Fund paid a commitment fee equal to its pro rata share of the average
 unutilized amount of the credit facility at a rate of 0.08% per annum.
- --------------------------------------------------------------------------------
 Interfund Borrowing and Lending Arrangements. Effective November 12, 2002, the
 following interfund borrowing and lending arrangements went into effect.
 Consistent with its fundamental policies and pursuant to an exemptive order
 issued by the Securities and Exchange Commission ("SEC"), the Fund may engage
 in borrowing and lending activities with other funds in the OppenheimerFunds
 complex. Borrowing money from affiliated funds may afford the Fund the
 flexibility to use the most cost-effective alternative to satisfy its borrowing
 requirements. Lending money to an affiliated fund may allow the Fund to obtain
 a higher rate of return than it could from interest rates on alternative
 short-term investments. Implementation of interfund lending will be
 accomplished consistent with applicable regulatory requirements, including the
 provisions of the SEC order. There is a risk that a borrowing fund could have a
 loan called on one day's notice. In that circumstance, the Fund might have to
 borrow from a bank at a higher interest cost if money to lend were not
 available from another Oppenheimer fund. When the Fund lends assets to another
 affiliated fund, the Fund is subject to the risk that the borrowing fund fails
 to repay the loan.
    The Fund had no borrowings and/or lending arrangements outstanding during
the year ended or at November 30, 2002.



Financial
Statements
for the
Master Focus
Twenty Trust



November 30, 2002



SCHEDULE OF INVESTMENTS                                                                           Master Focus Twenty Trust


                       Shares                                                                                    Percent of
Industry*               Held                         Common Stocks                                     Value     Net Assets

United States

Automobiles            188,300  Harley-Davidson, Inc.                                              $     9,140,082     4.6%

Biotechnology          166,100  ++Genentech, Inc.                                                        5,481,300      2.8

Commercial             144,300  ++Career Education Corporation                                           5,614,713      2.8
Services &             176,900  ++CheckFree Corp.                                                        3,465,471      1.8
Supplies               197,100  ++Corinthian Colleges, Inc.                                              7,686,900      3.9
                       294,600  Manpower Inc.                                                           10,979,742      5.5
                                                                                                   ---------------   ------
                                                                                                        27,746,826     14.0

Communications         961,000  ++Cisco Systems, Inc.                                                   14,338,120      7.2
Equipment

Computers &            364,600  Hewlett-Packard Company                                                  7,102,408      3.6
Peripherals

Diversified            391,000  ++Nasdaq-100 Shares (a)                                                 10,799,420      5.4
Financials

Health Care            178,900  Medtronic, Inc.                                                          8,363,575      4.2
Equipment &            111,300  ++Zimmer Holdings, Inc.                                                  4,189,332      2.1
Supplies                                                                                           ---------------   ------
                                                                                                        12,552,907      6.3

Health Care             98,200  ++Accredo Health, Incorporated                                           5,229,150      2.7
Providers &            189,100  HCA Inc.                                                                 7,598,038      3.8
Services                77,600  ++LifePoint Hospitals, Inc.                                              2,444,400      1.2
                        72,900  ++Quest Diagnostics Incorporated                                         4,067,091      2.1
                                                                                                   ---------------   ------
                                                                                                        19,338,679      9.8

Media                  317,100  ++Clear Channel Communications, Inc.                                    13,781,166      6.9
                             1  ++Comcast Corporation (Class A)                                                  5      0.0
                       155,400  ++Fox Entertainment Group, Inc. (Class A)                                4,142,964      2.1
                       247,300  ++Viacom, Inc. (Class B)                                                11,625,573      5.9
                                                                                                   ---------------   ------
                                                                                                        29,549,708     14.9

Oil & Gas              133,700  Devon Energy Corporation                                                 6,122,123      3.1

Pharmaceuticals        105,950  ++Forest Laboratories, Inc.                                             11,371,613      5.7
                       302,500  Pfizer Inc.                                                              9,540,850      4.8
                                                                                                   ---------------   ------
                                                                                                        20,912,463     10.5

Software               361,400  ++BEA Systems, Inc.                                                      3,993,470      2.0
                        59,000  ++Electronic Arts Inc.                                                   4,001,970      2.0
                       336,100  ++Microsoft Corporation                                                 19,433,302      9.8
                                                                                                   ---------------   ------
                                                                                                        27,428,742     13.8

Specialty Retail       114,400  ++Bed Bath & Beyond Inc.                                                 3,984,552      2.0

Wireless               523,500  ++AT&T Wireless Services Inc.                                            3,952,425      2.0
Telecommunication
Services


                                Total Investments in Common Stocks
                                (Cost--$182,376,213)                                                   198,449,755    100.0




Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



SCHEDULE OF INVESTMENTS (concluded)                                                               Master Focus Twenty Trust


                       Shares                                                                                    Percent of
                        Held                     Short-Term Securities                                 Value     Net Assets

United States (concluded)

Common Stock         3,981,307  Merrill Lynch Liquidity Series, LLC Cash Sweep Series I (b)        $     3,981,307     2.0%

                                Total Investments in Short-Term Securities
                                (Cost--$3,981,307)                                                       3,981,307      2.0

                                Total Investments (Cost--$186,357,520)                                 202,431,062    102.0
                                Liabilities in Excess of Other Assets                                  (4,025,250)    (2.0)
                                                                                                   ---------------   ------
                                Net Assets                                                         $   198,405,812   100.0%
                                                                                                   ===============   ======

*For Fund compliance purposes, "Industry" means any one or more of the industry
sub-classifications used by one or more widely recognized market indexes or
ratings group indexes, and/or as defined by Fund management. This definition may
not apply for purposes of this report, which may combine such industry sub-
classifications for reporting ease.
++Non-income producing security.
(a)Represents ownership in the Nasdaq-100 Trust, a registered unit investment
trust. The investment objective of the Nasdaq-100 Trust is to provide investment
results that generally correspond to the price performance and dividend yield of
the component. (b)Investments in companies considered to be an affiliate of the
Trust (such companies are defined as "Affiliated Companies" in Section 2 (a)(3)
of the Investment Company Act of 1940) are as follows:


                                    Net Share       Net      Dividend
Affiliate                            Activity       Cost      Income
Merrill Lynch Liquidity Series,
LLC Cash Sweep Series I             3,981,307    $3,981,307   $1,744


See Notes to Financial Statements.




Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



FINANCIAL INFORMATION



Statement of Assets and Liabilities                                                               Master Focus Twenty Trust


                  As of November 30, 2002

Assets:           Investments, at value (including securities loaned of $41,284,767)
                  (identified cost--$186,357,520)                                                           $   202,431,062
                  Investments held as collateral for loaned securities, at value                                 42,715,852
                  Receivables:
                     Securities sold                                                      $     2,787,677
                     Contributions                                                                178,746
                     Dividends                                                                     75,294
                     Loaned securities income                                                       6,097         3,047,814
                                                                                          ---------------
                  Prepaid expenses and other assets                                                                   2,608
                                                                                                            ---------------
                  Total assets                                                                                  248,197,336
                                                                                                            ---------------

Liabilities:      Collateral on securities loaned, at value                                                      42,715,852
                  Payables:
                     Securities purchased                                                       6,021,454
                     Withdrawals                                                                  887,305
                     Investment adviser                                                            90,641         6,999,400
                                                                                          ---------------
                  Accrued expenses                                                                                   76,272
                                                                                                            ---------------
                  Total liabilities                                                                              49,791,524
                                                                                                            ---------------

Net Assets:       Net assets                                                                                $   198,405,812
                                                                                                            ===============

Net Assets        Investors' capital                                                                        $   182,332,270
Consist of:       Unrealized appreciation on investments                                                         16,073,542
                                                                                                            ---------------
                  Net assets                                                                                $   198,405,812
                                                                                                            ===============

See Notes to Financial Statements.




Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



FINANCIAL INFORMATION (continued)



Statement of Operations                                                                           Master Focus Twenty Trust


                      For the Year Ended November 30, 2002

Investment        Dividends                                                                                 $       404,473
Income:           Interest                                                                                          228,473
                  Securities lending--net                                                                           113,888
                                                                                                            ---------------
                  Total income                                                                                      746,834
                                                                                                            ---------------

Expenses:         Investment advisory fees                                                $     1,718,971
                  Accounting services                                                             174,143
                  Professional fees                                                               121,702
                  Custodian fees                                                                   58,672
                  Trustees' fees and expenses                                                      39,670
                  Offering costs                                                                    9,903
                  Pricing fees                                                                        921
                  Other                                                                            15,956
                                                                                          ---------------
                  Total expenses                                                                                  2,139,938
                                                                                                            ---------------
                  Investment loss--net                                                                          (1,393,104)
                                                                                                            ---------------

Realized &        Realized loss on investments--net                                                           (154,513,735)
Unrealized        Change in unrealized appreciation/depreciation on investments--net                             21,047,177
Gain (Loss) on                                                                                              ---------------
Investments--Net: Total realized and unrealized loss on investments--net                                      (133,466,558)
                                                                                                            ---------------
                  Net Decrease in Net Assets Resulting from Operations                                      $ (134,859,662)
                                                                                                            ===============

See Notes to Financial Statements.




Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



FINANCIAL INFORMATION (concluded)



Statements of Changes in Net Assets                                                               Master Focus Twenty Trust


                                                                                                      For the
                                                                                                     Year Ended
                                                                                                    November 30,
Increase (Decrease) in Net Assets:                                                             2002               2001

Operations:       Investment loss--net                                                    $   (1,393,104)   $   (1,870,504)
                  Realized loss on investments--net                                         (154,513,735)   (1,204,513,199)
                  Change in unrealized appreciation/depreciation on investments--net           21,047,177       331,418,796
                                                                                          ---------------   ---------------
                  Net decrease in net assets resulting from operations                      (134,859,662)     (874,964,907)
                                                                                          ---------------   ---------------

Capital           Proceeds from contributions                                                   5,360,875       404,613,481
Transactions:     Fair value of withdrawals                                                 (102,048,536)     (288,410,915)
                                                                                          ---------------   ---------------
                  Net increase (decrease) in net assets derived from
                  capital transactions                                                       (96,687,661)       116,202,566
                                                                                          ---------------   ---------------
Net Assets:       Total decrease in net assets                                              (231,547,323)     (758,762,341)
                  Beginning of year                                                           429,953,135     1,188,715,476
                                                                                          ---------------   ---------------
                  End of year                                                             $   198,405,812   $   429,953,135
                                                                                          ===============   ===============

See Notes to Financial Statements.





Financial Highlights                                                                              Master Focus Twenty Trust


                                                                                       For the               For the Period
                                                                                      Year Ended           March 20, 2000++
The following ratios have been derived from information                              November 30,           to November 30,
provided in the financial statements.                                             2002             2001            2000

Total Investment                                                                  (34.70%)              --               --
Return:**                                                                    =============   =============    =============

Ratios to         Expenses                                                            .75%            .68%            .90%*
Average                                                                      =============   =============    =============
Net Assets:       Investment loss--net                                              (.49%)          (.25%)          (.33%)*
                                                                             =============   =============    =============

Supplemental      Net assets, end of period (in thousands)                   $     198,406   $     429,953    $   1,188,715
Data:                                                                        =============   =============    =============
                  Portfolio turnover                                               275.69%         137.66%           62.85%
                                                                             =============   =============    =============

*Annualized.
**Total return is required to be disclosed for fiscal years beginning after
December 15, 2000. ++Commencement of operations.

See Notes to Financial Statements.




Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



NOTES TO FINANCIAL STATEMENTS


Master Focus Twenty Trust

1. Significant Accounting Policies:
Master Focus Twenty Trust (the "Trust") is registered under the Investment
Company Act of 1940 and is organized as a Delaware business trust. The
Declaration of Trust permits the Trustees to issue nontransferable interest in
the Trust, subject to certain limitations. The Trust's financial statements are
prepared in conformity with accounting principles generally accepted in the
United States of America, which may require the use of management accruals and
estimates. The following is a summary of significant accounting policies
followed by the Trust.

(a) Valuation of investments--Portfolio securities that are traded on stock
exchanges are valued at the last sale price on the exchange on which such
securities are traded, as of the close of business on the day the securities are
being valued or, lacking any sales, at the last available bid price. Securities
that are traded in the over- the-counter market are valued at the last available
bid price prior to the time of valuation. In cases where securities are traded
on more than one exchange, the securities are valued on the exchange designated
by or under the authority of the Board of Trustees as the primary market.
Securities that are traded both in the over-the- counter market and on a stock
exchange are valued according to the broadest and most representative market.
Options written or purchased are valued at the last sale price in the case of
exchange- traded options. In the case of options traded in the over-the- counter
market, valuation is the last asked price (options written) or the last bid
price (options purchased). Short-term securities are valued at amortized cost,
which approximates market value. Other investments, including futures contracts
and related options, are stated at market value. Securities and assets for which
market quotations are not readily available are valued at fair market value, as
determined in good faith by or under the direction of the Trust's Board of
Trustees.

(b) Derivative financial instruments--The Trust may engage in various portfolio
investment techniques to increase or decrease the level of risk to which the
Trust is exposed more quickly and efficiently than transactions in other types
of investments. Losses may arise due to changes in the value of the contract or
if the counterparty does not perform under the contract.

* Financial futures contracts--The Trust may purchase or sell financial futures
contracts and options on such futures contracts for the purpose of hedging the
market risk on existing securities or the intended purchase of securities. Upon
entering into a contract, the Trust deposits and maintains as collateral such
initial margin as required by the exchange on which the transaction is effected.
Pursuant to the contract, the Trust agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract.
Such receipts or payments are known as variation margin and are recorded by the
Trust as unrealized gains or losses. When the contract is closed, the Trust
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.

* Options--The Trust is authorized to purchase and write call and put options.
When the Trust writes an option, an amount equal to the premium received by the
Trust is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked to market to reflect the current market value
of the option written. When a security is purchased or sold through an exercise
of an option, the related premium paid (or received) is added to (or deducted
from) the basis of the security acquired or deducted from (or added to) the
proceeds of the security sold. When an option expires (or the Trust enters into
a closing transaction), the Trust realizes a gain or loss on the option to the
extent of the premiums received or paid (or a gain or loss to the extent that
the cost of the closing transaction exceeds the premium paid or received).

Written and purchased options are non-income producing investments.

* Forward foreign exchange contracts--The Trust is authorized to enter into
forward foreign exchange contracts as a hedge against either specific
transactions or portfolio positions. The contract is marked-to-market daily and
the change in market value is recorded by the Trust as an unrealized gain or
loss. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed.



Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



NOTES TO FINANCIAL STATEMENTS (concluded)


Master Focus Twenty Trust

* Foreign currency options and futures--The Trust may also purchase or sell
listed or over-the-counter foreign currency options, foreign currency futures
and related options on foreign currency futures as a short or long hedge against
possible variations in foreign exchange rates. Such transactions may be effected
with respect to hedges on non-U.S. dollar denominated securities owned by the
Trust, sold by the Trust but not yet delivered, or committed or anticipated to
be purchased by the Trust.

(c) Foreign currency transactions--Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into U.S. dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on investments.

(d) Income taxes--The Trust is classified as a partnership for Federal income
tax purposes. As a partnership for Federal income tax purposes, the Trust will
not incur Federal income tax liability. Items of partnership income, gain, loss
and deduction will pass through to investors as partners in the Trust.
Therefore, no Federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates.

(e) Security transactions and investment income--Security transactions are
accounted for on the date the securities are purchased or sold (the trade
dates). Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Dividends from foreign securities where the ex-dividend date may have passed are
subsequently recorded when the Trust has determined the ex-dividend date.
Interest income is recognized on the accrual basis.

(f) Securities lending--The Trust may lend securities to financial institutions
that provide cash or securities issued or guaranteed by the U.S. government as
collateral, which will be maintained at all times in an amount equal to at least
100% of the current market value of the loaned securities. Where the Trust
receives securities as collateral for the loaned securities, it collects a fee
from the borrower. The Trust typically receives the income on the loaned
securities but does not receive income on the collateral. Where the Trust
receives cash collateral, it may invest such collateral and retain the amount
earned on such investment, net of any amount rebated to the borrower. Loans of
securities are terminable at any time and the borrower, after notice, is
required to return borrowed securities within five business days. The Trust may
pay reasonable finder's, lending agent, administrative and custodial fees in
connection with its loans. In the event that the borrower defaults on its
obligation to return borrowed securities because of insolvency or for any other
reason, the Trust could experience delays and costs in gaining access to the
collateral. The Trust also could suffer a loss where the value of the collateral
falls below the market value of the borrowed securities, in the event of
borrower default or in the event of losses on investments made with cash
collateral.


2. Investment Advisory Agreement and Transactions with Affiliates: The Trust has
entered into an Investment Advisory Agreement with Fund Asset Management, L.P.
("FAM"). The general partner of FAM is Princeton Services, Inc. ("PSI"), an
indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."),
which is the limited partner.

FAM is responsible for the management of the Trust's investments and provides
the necessary personnel, facilities, equipment and certain other services
necessary to the operations of the Trust. For such services, the Trust pays a
monthly fee at an annual rate of .60% of the average daily value of the Trust's
net assets.

The Trust has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML & Co., or its
affiliates. As of November 30, 2002, the Trust lent securities with a value of
$11,013,528 to MLPF&S or its affiliates. Pursuant to that order, the Trust also
has retained QA Advisors, LLC ("QA Advisors"), an affiliate of FAM, as the
securities lending agent for a fee based on a share of the returns on investment
of cash collateral. QA Advisors may, on behalf of the Trust, invest cash
collateral received by the Trust for such loans, among other things, in a
private investment company managed by QA Advisors or in registered money market
funds advised by FAM or its affiliates. As of November 30, 2002, cash collateral
of $19,222,135 was invested in the Money Market Series of the Merrill Lynch
Liquidity Series, LLC and $23,493,717 was invested in the Merrill Lynch Premier
Institutional Fund. For the year ended November 30, 2002, QA Advisors received
$44,826 in securities lending agent fees.



Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



In addition, MLPF&S received $161,190 in commissions on the execution of
portfolio security transactions for the Trust for the year ended November 30,
2002.

For the year ended November 30, 2002, the Trust reimbursed FAM $23,452 for
certain accounting services.

Certain officers and/or trustees of the Trust are officers and/or directors of
FAM, PSI, and/or ML & Co.


3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended November 30, 2002 were $757,219,940 and $822,668,782, respectively.

Net realized gains (losses) for the year ended November 30, 2002 and net
unrealized gains as of November 30, 2002 were as follows:


                                     Realized          Unrealized
                                  Gains (Losses)         Gains

Long-term investments            $ (154,141,729)     $   16,073,542
Short-term investments                     (218)                 --
Options purchased                      (506,361)                 --
Options written                          134,573                 --
                                 ---------------     --------------
Total investments                $ (154,513,735)     $   16,073,542
                                 ===============     ==============


As of November 30, 2002, net unrealized apprecia-tion for Federal income tax
purposes aggregated $8,409,259, of which $14,877,950 related to appreciated
securities and $6,468,691 related to depreciated securities. At November 30,
2002, the aggregate cost of investments for Federal income tax purposes was
$194,021,803.

Transactions in call options written for the year ended November 30, 2002 were
as follows:


                                       Nominal
                                        Value           Premiums
                                       Covered          Received

Outstanding call options
written, beginning of year               798,500     $    1,057,029
Options written                          814,000          1,535,300
Options closed                       (1,612,500)        (2,592,329)
                                 ---------------     --------------
Outstanding call options
written, end of year                          --     $           --
                                 ===============     ==============


Transactions in put options written for the year ended November 30, 2002 were as
follows:


                                       Nominal
                                        Value           Premiums
                                       Covered          Received

Outstanding put options
written, beginning of year               111,000     $      134,065
Options written                          172,000            326,957
Options closed                         (283,000)          (461,022)
                                 ---------------     --------------
Outstanding put options
written, end of year                          --     $           --
                                 ===============     ==============



4. Short-Term Borrowings:
The Trust, along with certain other funds managed by FAM and its affiliates, is
a party to a credit agreement with Bank One, N.A. and certain other lenders.
Effective November 29, 2002, in conjunction with the renewal for one year at the
same terms, the total commitment was reduced from $1,000,000,000 to
$500,000,000. The Trust may borrow under the credit agreement to fund investor
withdrawals and for other lawful purposes other than for leverage. The Trust may
borrow up to the maximum amount allowable under the Trust's current prospectus
and statement of additional information, subject to various other legal,
regulatory or contractual limits. The Trust pays a commitment fee of .09% per
annum based on the Trust's pro rata share of the unused portion of the credit
agreement. Amounts borrowed under the credit agreement bear interest at a rate
equal to, at each fund's election, the Federal Funds rate plus .50% or a base
rate as determined by Bank One, N.A. The Trust did not borrow under the credit
agreement during the year ended November 30, 2002.



Merrill Lynch Focus Twenty Fund, Inc., November 30, 2002



INDEPENDENT AUDITORS' REPORT


To The Board of Trustees and Investors,
Master Focus Twenty Trust:

We have audited the accompanying statement of assets and liabilities of Master
Focus Twenty Trust, including the schedule of investments as of November 30,
2002, the related statements of operations for the year then ended and changes
in net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the periods presented. These financial
statements and the financial highlights are the responsibility of the
Portfolio's management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at November 30, 2002 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Master Focus Twenty
Trust as of November 30, 2002, the results of its operations, the changes in its
net assets and the financial highlights for the respective stated periods in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Princeton, New Jersey
January 21, 2003



INDEPENDENT AUDITORS' REPORT

- --------------------------------------------------------------------------------
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF OPPENHEIMER SELECT MANAGERS QM
ACTIVE BALANCED FUND:
We have audited the accompanying statement of assets and liabilities of
Oppenheimer Select Managers QM Active Balanced Fund, which is a series of
Oppenheimer Select Managers, including the statement of investments, as of
November 30, 2002, and the related statement of operations for the year then
ended, the statements of changes in net assets and the financial highlights for
the periods indicated. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
     We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 2002, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
     In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Select Managers QM Active Balanced Fund as of November 30, 2002, the
results of its operations for the year then ended, the changes in its net assets
and the financial highlights for the periods indicated, in conformity with
accounting principles generally accepted in the United States of America.


/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP

Denver, Colorado
December 20, 2002




STATEMENT OF INVESTMENTS  November 30, 2002
- --------------------------------------------------------------------------------

                                                                    Market Value
                                                             Shares   See Note 1
- --------------------------------------------------------------------------------
Common Stocks--67.2%
- --------------------------------------------------------------------------------
Consumer Discretionary--9.7%
- --------------------------------------------------------------------------------
Auto Components--0.4%
American Axle & Manufacturing  Holdings, Inc. 1                400      $ 9,592
- --------------------------------------------------------------------------------
Cooper Tire & Rubber Co.                                       300        4,770
- --------------------------------------------------------------------------------
Lear Corp. 1                                                   200        7,338
- --------------------------------------------------------------------------------
Stoneridge, Inc. 1                                             100          983
                                                                        --------
                                                                          22,683

- --------------------------------------------------------------------------------
Automobiles--0.5%
General Motors Corp.                                           600       23,820
- --------------------------------------------------------------------------------
Harley-Davidson, Inc.                                          100        4,854
                                                                        --------
                                                                          28,674

- --------------------------------------------------------------------------------
Distributors--0.0%
Handleman Co. 1                                                200        2,250
- --------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--1.0%
Harrah's Entertainment, Inc. 1                                 500       20,000
- --------------------------------------------------------------------------------
Jack in the Box, Inc. 1                                        200        4,024
- --------------------------------------------------------------------------------
Marriott International, Inc., Cl. A                            300       10,725
- --------------------------------------------------------------------------------
McDonald's Corp.                                               800       14,800
- --------------------------------------------------------------------------------
Papa John's International, Inc. 1                              100        2,714
- --------------------------------------------------------------------------------
Park Place Entertainment Corp. 1                               800        6,624
- --------------------------------------------------------------------------------
Ryan's Family Steak Houses, Inc. 1                             400        4,348
- --------------------------------------------------------------------------------
Yum! Brands, Inc. 1                                            100        2,391
                                                                        --------
                                                                          65,626

- --------------------------------------------------------------------------------
Household Durables--0.4%
Lancaster Colony Corp.                                         100        3,619
- --------------------------------------------------------------------------------
Lennar Corp.                                                   100        5,302
- --------------------------------------------------------------------------------
Maytag Corp.                                                   500       15,455
                                                                        --------
                                                                          24,376

- --------------------------------------------------------------------------------
Internet & Catalog Retail--0.5%
Amazon.com, Inc. 1                                             600       14,010
- --------------------------------------------------------------------------------
USA Interactive, Inc. 1                                        600       16,680
                                                                        --------
                                                                          30,690

- --------------------------------------------------------------------------------
Leisure Equipment & Products--0.3%
Eastman Kodak Co.                                              200        7,384
- --------------------------------------------------------------------------------
SCP Pool Corp. 1                                               300        9,453
                                                                        --------
                                                                          16,837


- --------------------------------------------------------------------------------
Media--2.5%
AOL Time Warner, Inc. 1                                      1,200       19,644
- --------------------------------------------------------------------------------
Clear Channel Communications, Inc. 1                           400       17,384
- --------------------------------------------------------------------------------
Comcast Corp., Cl. A 1                                         226        5,297
- --------------------------------------------------------------------------------
Comcast Corp., Cl. A Special, Non-Vtg. 1                       200        4,560

                                                                    Market Value
                                                             Shares   See Note 1
- --------------------------------------------------------------------------------
Media Continued
Disney (Walt) Co.                                              700     $ 13,874
- --------------------------------------------------------------------------------
E.W. Scripps Co. (The), Cl. A                                  100        7,928
- --------------------------------------------------------------------------------
Gannett Co., Inc.                                              300       21,375
- --------------------------------------------------------------------------------
Liberty Media Corp., Cl. A 1                                   700        7,392
- --------------------------------------------------------------------------------
McGraw-Hill Cos., Inc. (The)                                   100        5,929
- --------------------------------------------------------------------------------
Pulitzer, Inc.                                                 100        4,396
- --------------------------------------------------------------------------------
Tribune Co.                                                    200        9,160
- --------------------------------------------------------------------------------
Viacom, Inc., Cl. B 1                                          800       37,608
                                                                       ---------
                                                                         154,547

- --------------------------------------------------------------------------------
Multiline Retail--1.4%
Federated Department Stores, Inc. 1                            700       22,876
- --------------------------------------------------------------------------------
May Department Stores Co.                                      200        4,892
- --------------------------------------------------------------------------------
Sears Roebuck & Co.                                            500       13,850
- --------------------------------------------------------------------------------
Wal-Mart Stores, Inc.                                          800       43,328
                                                                       ---------
                                                                          84,946

- --------------------------------------------------------------------------------
Specialty Retail--2.2%
Abercrombie & Fitch Co., Cl. A 1                               500       12,435
- --------------------------------------------------------------------------------
AnnTaylor Stores Corp. 1                                       200        4,750
- --------------------------------------------------------------------------------
AutoNation, Inc. 1                                           1,200       14,808
- --------------------------------------------------------------------------------
AutoZone, Inc. 1                                               100        8,170
- --------------------------------------------------------------------------------
Home Depot, Inc.                                             1,100       29,062
- --------------------------------------------------------------------------------
Lowe's Cos., Inc.                                              800       33,200
- --------------------------------------------------------------------------------
Payless ShoeSource, Inc. 1                                     100        5,669
- --------------------------------------------------------------------------------
PetsMart, Inc. 1                                               700       12,915
- --------------------------------------------------------------------------------
Sherwin-Williams Co.                                           300        8,649
- --------------------------------------------------------------------------------
TJX Cos., Inc. (The)                                           200        3,914
- --------------------------------------------------------------------------------
Too, Inc. 1                                                    100        2,935
- --------------------------------------------------------------------------------
United Auto Group, Inc. 1                                      100        1,351
                                                                       ---------
                                                                         137,858

- --------------------------------------------------------------------------------
Textiles & Apparel--0.5%
Jones Apparel Group, Inc. 1                                    400       14,720
- --------------------------------------------------------------------------------
Nike, Inc., Cl. B                                              100        4,478
- --------------------------------------------------------------------------------
Phillips-Van Heusen Corp.                                      500        6,575
- --------------------------------------------------------------------------------
Timberland Co., Cl. A 1                                        200        7,304
                                                                       ---------
                                                                          33,077

- --------------------------------------------------------------------------------
Consumer Staples--5.9%
- --------------------------------------------------------------------------------
Beverages--1.6%
Anheuser-Busch Cos., Inc.                                      800       39,296
- --------------------------------------------------------------------------------
Coca-Cola Co. (The)                                            500       22,820
- --------------------------------------------------------------------------------
Pepsi Bottling Group, Inc. (The)                               300        8,616
- --------------------------------------------------------------------------------
PepsiAmericas, Inc.                                            200        3,046
- --------------------------------------------------------------------------------
PepsiCo, Inc.                                                  600       25,488
                                                                       ---------
                                                                          99,266



            6 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


                                                                    Market Value
                                                            Shares    See Note 1
- --------------------------------------------------------------------------------
Food & Drug Retailing--0.8%
Albertson's, Inc.                                              400     $  9,336
- --------------------------------------------------------------------------------
Kroger Co. (The) 1                                           1,100       17,303
- --------------------------------------------------------------------------------
Safeway, Inc. 1                                                600       14,268
- --------------------------------------------------------------------------------
Winn-Dixie Stores, Inc.                                        400        5,968
                                                                       ---------
                                                                          46,875

- --------------------------------------------------------------------------------
Food Products--0.9%
ConAgra Foods, Inc.                                            100        2,437
- --------------------------------------------------------------------------------
International Multifoods Corp. 1                               300        5,994
- --------------------------------------------------------------------------------
Interstate Bakeries Corp.                                      200        4,610
- --------------------------------------------------------------------------------
Kraft Foods, Inc., Cl. A                                       200        7,512
- --------------------------------------------------------------------------------
Sara Lee Corp.                                                 500       11,665
- --------------------------------------------------------------------------------
Tyson Foods, Inc., Cl. A                                       700        8,260
- --------------------------------------------------------------------------------
Unilever NV, NY Shares                                         300       17,445
                                                                       ---------
                                                                          57,923

- --------------------------------------------------------------------------------
Household Products--1.7%
Clorox Co. (The)                                               600       26,304
- --------------------------------------------------------------------------------
Colgate-Palmolive Co.                                          100        5,139
- --------------------------------------------------------------------------------
Dial Corp. (The)                                               400        8,328
- --------------------------------------------------------------------------------
Kimberly-Clark Corp.                                           500       25,160
- --------------------------------------------------------------------------------
Procter & Gamble Corp. (The)                                   500       42,000
                                                                       ---------
                                                                         106,931

- --------------------------------------------------------------------------------
Personal Products--0.4%
Avon Products, Inc.                                            100        5,135
- --------------------------------------------------------------------------------
Gillette Co.                                                   600       18,192
                                                                       ---------
                                                                          23,327

- --------------------------------------------------------------------------------
Tobacco--0.5%
Philip Morris Cos., Inc.                                       800       30,176
- --------------------------------------------------------------------------------
Energy--3.3%
- --------------------------------------------------------------------------------
Oil & Gas--3.3%
Anadarko Petroleum Corp.                                       500       23,600
- --------------------------------------------------------------------------------
Ashland, Inc.                                                  100        2,917
- --------------------------------------------------------------------------------
ChevronTexaco Corp.                                            431       28,890
- --------------------------------------------------------------------------------
ConocoPhillips                                                 400       19,124
- --------------------------------------------------------------------------------
Devon Energy Corp.                                             100        4,579
- --------------------------------------------------------------------------------
Exxon Mobil Corp.                                            2,800       97,440
- --------------------------------------------------------------------------------
Occidental Petroleum Corp.                                     700       19,495
- --------------------------------------------------------------------------------
Patina Oil & Gas Corp.                                         375       11,280
                                                                       ---------
                                                                         207,325

- --------------------------------------------------------------------------------
Financials--14.2%
- --------------------------------------------------------------------------------
Banks--6.2%
AmSouth Bancorp                                                300        5,721
- --------------------------------------------------------------------------------
Associated Banc-Corp                                           110        3,688


                                                                    Market Value
                                                           Shares     See Note 1
- --------------------------------------------------------------------------------
 Banks Continued
 Astoria Financial Corp.                                  500          $ 13,140
- --------------------------------------------------------------------------------
 Bank of America Corp.                                    800            56,064
- --------------------------------------------------------------------------------
 Bank One Corp.                                           300            11,847
- --------------------------------------------------------------------------------
 Banknorth Group, Inc.                                    400             8,812
- --------------------------------------------------------------------------------
 Charter One Financial, Inc.                              800            24,080
- --------------------------------------------------------------------------------
 Comerica, Inc.                                           200             9,466
- --------------------------------------------------------------------------------
 Commercial Federal Corp.                                 200             4,490
- --------------------------------------------------------------------------------
 FleetBoston Financial Corp.                              700            18,991
- --------------------------------------------------------------------------------
 Flushing Financial Corp.                                 200             3,446
- --------------------------------------------------------------------------------
 Golden West Financial Corp.                              300            20,760
- --------------------------------------------------------------------------------
 Greater Bay Bancorp                                      600            10,776
- --------------------------------------------------------------------------------
 Greenpoint Financial Corp.                               200             8,540
- --------------------------------------------------------------------------------
 Independence Community Bank Corp.                        100             2,571
- --------------------------------------------------------------------------------
 KeyCorp                                                  300             7,827
- --------------------------------------------------------------------------------
 National City Corp.                                      900            25,020
- --------------------------------------------------------------------------------
 New York Community Bancorp, Inc.                         200             5,576
- --------------------------------------------------------------------------------
 PNC Financial Services Group                             200             8,440
- --------------------------------------------------------------------------------
 Popular, Inc.                                            200             6,726
- --------------------------------------------------------------------------------
 Sky Financial Group, Inc.                                100             1,910
- --------------------------------------------------------------------------------
 Staten Island Bancorp, Inc.                              200             3,932
- --------------------------------------------------------------------------------
 TCF Financial Corp.                                      100             4,265
- --------------------------------------------------------------------------------
 Trustmark Corp.                                          100             2,297
- --------------------------------------------------------------------------------
 U.S. Bancorp                                             606            13,272
- --------------------------------------------------------------------------------
 Union Planters Corp.                                     300             8,850
- --------------------------------------------------------------------------------
 Wachovia Corp.                                           600            21,090
- --------------------------------------------------------------------------------
 Washington Mutual, Inc.                                  850            30,583
- --------------------------------------------------------------------------------
 Webster Financial Corp.                                  100             3,260
- --------------------------------------------------------------------------------
 Wells Fargo Co.                                          400            18,484
- --------------------------------------------------------------------------------
 WSFS Financial Corp.                                     600            19,794
                                                                       --------
                                                                         383,718

- --------------------------------------------------------------------------------
 Diversified Financials--4.6%
 Capital One Financial Corp.                              600            20,280
- --------------------------------------------------------------------------------
 Citigroup, Inc.                                        2,200            85,536
- --------------------------------------------------------------------------------
 Countrywide Financial Corp.                              400            19,720
- --------------------------------------------------------------------------------
 Doral Financial Corp.                                    100             2,695
- --------------------------------------------------------------------------------
 DVI, Inc. 1                                              400             3,536
- --------------------------------------------------------------------------------
 Fannie Mae                                               600            37,830
- --------------------------------------------------------------------------------
 Freddie Mac                                              500            28,820
- --------------------------------------------------------------------------------
 Household International, Inc.                          1,000            28,700
- --------------------------------------------------------------------------------
 J.P. Morgan Chase & Co.                                1,700            42,789
- --------------------------------------------------------------------------------
 Principal Financial Group, Inc. (The)                    400            11,600
- --------------------------------------------------------------------------------
 Walter Industries, Inc.                                  500             5,225
                                                                       --------
                                                                         286,731


                   7 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------

                                                                    Market Value
                                                            Shares    See Note 1
- --------------------------------------------------------------------------------
Insurance--2.9%
American Financial Group, Inc.                               400       $  9,500
- --------------------------------------------------------------------------------
American International Group, Inc.                           615         40,067
- --------------------------------------------------------------------------------
AmerUs Group Co.                                             500         16,025
- --------------------------------------------------------------------------------
Fidelity National Financial, Inc.                            450         14,558
- --------------------------------------------------------------------------------
John Hancock Financial Services, Inc.                        600         18,342
- --------------------------------------------------------------------------------
Loews Corp.                                                  200          8,096
- --------------------------------------------------------------------------------
MBIA, Inc.                                                   100          4,548
- --------------------------------------------------------------------------------
MetLife, Inc.                                                900         24,156
- --------------------------------------------------------------------------------
MGIC Investment Corp.                                        100          4,667
- --------------------------------------------------------------------------------
Stewart Information Services Corp. 1                         100          2,070
- --------------------------------------------------------------------------------
Travelers Property Casualty  Corp., Cl. A 1                1,277         20,368
- --------------------------------------------------------------------------------
Travelers Property Casualty Corp., Cl. B 1                   559          8,944
- --------------------------------------------------------------------------------
UnumProvident Corp.                                          400          6,820
                                                                        --------
                                                                         178,161

- --------------------------------------------------------------------------------
Real Estate--0.5%
Boykin Lodging Co.                                           300          2,730
- --------------------------------------------------------------------------------
CarrAmerica Realty Corp.                                     100          2,532
- --------------------------------------------------------------------------------
Equity Inns, Inc.                                            100            576
- --------------------------------------------------------------------------------
Equity Office Properties Trust                               200          5,142
- --------------------------------------------------------------------------------
FBR Asset Investment Corp.                                   100          3,280
- --------------------------------------------------------------------------------
Impac Mortgage Holdings, Inc.                                800          9,352
- --------------------------------------------------------------------------------
LNR Property Corp.                                           100          3,640
- --------------------------------------------------------------------------------
National Health Investors, Inc.                              200          3,388
                                                                        --------
                                                                          30,640

- --------------------------------------------------------------------------------
Health Care--10.3%
- --------------------------------------------------------------------------------
Biotechnology--1.6%
Amgen, Inc. 1                                                820         38,704
- --------------------------------------------------------------------------------
Chiron Corp. 1                                               500         20,100
- --------------------------------------------------------------------------------
Genentech, Inc. 1                                            800         26,400
- --------------------------------------------------------------------------------
Wyeth                                                        300         11,529
                                                                        --------
                                                                          96,733

- --------------------------------------------------------------------------------
Health Care Equipment & Supplies--1.6%
Bard (C.R.), Inc.                                            300         16,650
- --------------------------------------------------------------------------------
Becton, Dickinson & Co.                                      600         17,802
- --------------------------------------------------------------------------------
Guidant Corp. 1                                              400         11,972
- --------------------------------------------------------------------------------
Hillenbrand Industries, Inc.                                 100          4,821
- --------------------------------------------------------------------------------
Medtronic, Inc.                                              100          4,675
- --------------------------------------------------------------------------------
Mentor Corp.                                                 200          8,650
- --------------------------------------------------------------------------------
Possis Medical, Inc. 1                                       100          1,618
- --------------------------------------------------------------------------------
St. Jude Medical, Inc. 1                                     200          6,964
- --------------------------------------------------------------------------------
Steris Corp. 1                                               400          9,092
- --------------------------------------------------------------------------------
Stryker Corp.                                                300         18,555
                                                                        --------
                                                                         100,799


                                                                   Market Value
                                                          Shares     See Note 1
 -------------------------------------------------------------------------------
 Health Care Providers & Services--1.6%
 AdvancePCS, Inc. 1                                         100        $  2,468
- --------------------------------------------------------------------------------
 Anthem, Inc. 1                                             100           5,925
- --------------------------------------------------------------------------------
 Cardinal Health, Inc.                                      300          18,462
- --------------------------------------------------------------------------------
 Cigna Corp.                                                300          13,059
- --------------------------------------------------------------------------------
 DaVita, Inc. 1                                             100           2,565
- --------------------------------------------------------------------------------
 Express Scripts, Inc. 1                                    300          15,183
- --------------------------------------------------------------------------------
 Five Star Quality Care, Inc. 1                              40              67
- --------------------------------------------------------------------------------
 PacifiCare Health Systems, Inc. 1                          100           2,675
- --------------------------------------------------------------------------------
 Tenet Healthcare Corp. 1                                   200           3,690
- --------------------------------------------------------------------------------
 UnitedHealth Group, Inc.                                   300          24,435
- --------------------------------------------------------------------------------
 US Oncology, Inc. 1                                        700           6,041
- --------------------------------------------------------------------------------
 WebMD Corp. 1                                              900           7,704
                                                                        --------
                                                                         102,274

- --------------------------------------------------------------------------------
 Pharmaceuticals--5.5%
 Abbott Laboratories                                        500          21,890
- --------------------------------------------------------------------------------
 Allergan, Inc.                                             400          23,516
- --------------------------------------------------------------------------------
 Bristol-Myers Squibb Co.                                   700          18,550
- --------------------------------------------------------------------------------
 Forest Laboratories, Inc. 1                                100          10,733
- --------------------------------------------------------------------------------
 Johnson & Johnson                                        1,496          85,302
- --------------------------------------------------------------------------------
 Merck & Co., Inc.                                        1,000          59,410
- --------------------------------------------------------------------------------
 Mylan Laboratories, Inc.                                   500          16,865
- --------------------------------------------------------------------------------
 Pfizer, Inc.                                             3,100          97,774
- --------------------------------------------------------------------------------
 Pharmacia Corp.                                            100           4,230
                                                                        --------
                                                                         338,270
- --------------------------------------------------------------------------------
 Industrials--6.9%
- --------------------------------------------------------------------------------
 Aerospace & Defense--1.0%
 Boeing Co.                                                 500          17,000
- --------------------------------------------------------------------------------
 Goodrich Corp.                                             300           5,520
- --------------------------------------------------------------------------------
 Honeywell International, Inc.                              300           7,761
- --------------------------------------------------------------------------------
 Mercury Computer Systems, Inc. 1                           300           9,369
- --------------------------------------------------------------------------------
 United Technologies Corp.                                  400          24,988
                                                                        --------
                                                                          64,638

- --------------------------------------------------------------------------------
 Air Freight & Couriers--0.2%
 FedEx Corp.                                                200          10,514
- --------------------------------------------------------------------------------
 Building Products--0.2%
 NCI Building Systems, Inc. 1                               500           9,600
- --------------------------------------------------------------------------------
 Commercial Services & Supplies--1.8%
 Allied Waste Industries, Inc. 1                            600           6,408
- --------------------------------------------------------------------------------
 Apollo Group, Inc., Cl. A 1                                300          12,375
- --------------------------------------------------------------------------------
 Automatic Data Processing, Inc.                            200           8,694
- --------------------------------------------------------------------------------
 Cendant Corp. 1                                          1,700          21,386
- --------------------------------------------------------------------------------
 Deluxe Corp.                                               200           8,680
- --------------------------------------------------------------------------------
 Education Management Corp. 1                               100           3,864
- --------------------------------------------------------------------------------
 First Data Corp.                                           300          10,392


             8 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND

                                                                   Market Value
                                                          Shares     See Note 1
- --------------------------------------------------------------------------------
Commercial Services & Supplies Continued
H&R Block, Inc.                                             500        $ 19,165
- --------------------------------------------------------------------------------
MemberWorks, Inc. 1                                         500           9,525
- --------------------------------------------------------------------------------
Republic Services, Inc. 1                                   400           8,600
- --------------------------------------------------------------------------------
Right Management Consultants, Inc. 1                        150           1,837
- --------------------------------------------------------------------------------
Sabre Holdings Corp. 1                                      100           2,176
                                                                        --------
                                                                         113,102

- --------------------------------------------------------------------------------
Construction & Engineering--0.2%
Shaw Group, Inc. (The) 1                                    600          10,380
- --------------------------------------------------------------------------------
Electrical Equipment--0.7%
Acuity Brands, Inc.                                         400           5,432
- --------------------------------------------------------------------------------
Emerson Electric Co.                                        100           5,215
- --------------------------------------------------------------------------------
Energizer Holdings, Inc. 1                                  700          20,727
- --------------------------------------------------------------------------------
Genlyte Group, Inc. (The) 1                                 200           6,600
- --------------------------------------------------------------------------------
Paxar Corp. 1                                               300           4,239
                                                                        --------
                                                                          42,213

- --------------------------------------------------------------------------------
Industrial Conglomerates--2.0%
3M Co.                                                      100          12,985
- --------------------------------------------------------------------------------
General Electric Co.                                      3,200          86,720
- --------------------------------------------------------------------------------
Tyco International Ltd.                                   1,400          24,976
                                                                        --------
                                                                         124,681

- --------------------------------------------------------------------------------
Machinery--0.4%
Cascade Corp.                                               100           1,400
- --------------------------------------------------------------------------------
Harsco Corp.                                                200           6,182
- --------------------------------------------------------------------------------
ITT Industries, Inc.                                        100           6,028
- --------------------------------------------------------------------------------
Pentair, Inc.                                               100           3,576
- --------------------------------------------------------------------------------
Timken Co.                                                  200           3,970
- --------------------------------------------------------------------------------
Trinity Industries, Inc.                                    100           1,953
                                                                        --------
                                                                          23,109

- --------------------------------------------------------------------------------
Road & Rail--0.4%
Burlington Northern Santa Fe Corp.                          300           7,599
- --------------------------------------------------------------------------------
CSX Corp.                                                   100           2,765
- --------------------------------------------------------------------------------
Union Pacific Corp.                                         300          17,370
                                                                        --------
                                                                          27,734
- --------------------------------------------------------------------------------
Information Technology--10.8%
- --------------------------------------------------------------------------------
Communications Equipment--2.1%
Cisco Systems, Inc. 1                                     4,600          68,632
- --------------------------------------------------------------------------------
Inter-Tel, Inc.                                             100           2,511
- --------------------------------------------------------------------------------
McData Corp., Cl. A 1                                       500           4,360
- --------------------------------------------------------------------------------
Motorola, Inc.                                              500           5,690
- --------------------------------------------------------------------------------
NetScreen Technologies, Inc. 1                              500           8,625
- --------------------------------------------------------------------------------
QUALCOMM, Inc. 1                                            900          37,098
                                                                        --------
                                                                         126,916

                                                                    Market Value
                                                          Shares      See Note 1
- --------------------------------------------------------------------------------
Computers & Peripherals--2.7%
Dell Computer Corp. 1                                      1,600       $ 45,760
- --------------------------------------------------------------------------------
Hewlett-Packard Co.                                        1,479         28,811
- --------------------------------------------------------------------------------
Intergraph Corp. 1                                           200          3,620
- --------------------------------------------------------------------------------
International Business Machines Corp.                        700         60,970
- --------------------------------------------------------------------------------
Iomega Corp. 1                                               500          4,275
- --------------------------------------------------------------------------------
Lexmark International, Inc., Cl. A 1                         400         26,456
                                                                        --------
                                                                         169,892

- --------------------------------------------------------------------------------
Electronic Equipment & Instruments--0.0%
Intermagnetics General Corp. 1                               100          2,171
- --------------------------------------------------------------------------------
Internet Software & Services--0.2%
WebEx Communications, Inc. 1                                 500          9,730
- --------------------------------------------------------------------------------
IT Consulting & Services--0.1%
Acxiom Corp. 1                                               500          7,675
- --------------------------------------------------------------------------------
Semiconductor Equipment & Products--2.1%
Altera Corp. 1                                               300          4,359
- --------------------------------------------------------------------------------
Intel Corp.                                                2,500         52,200
- --------------------------------------------------------------------------------
LSI Logic Corp. 1                                            500          4,145
- --------------------------------------------------------------------------------
Maxim Integrated Products, Inc.                              300         12,615
- --------------------------------------------------------------------------------
QLogic Corp. 1                                               600         26,064
- --------------------------------------------------------------------------------
RF Micro Devices, Inc. 1                                     600          7,314
- --------------------------------------------------------------------------------
Texas Instruments, Inc.                                    1,200         24,132
                                                                        --------
                                                                         130,829

- --------------------------------------------------------------------------------
Software--3.6%
Cerner Corp. 1                                               200          6,582
- --------------------------------------------------------------------------------
Citrix Systems, Inc. 1                                       200          2,350
- --------------------------------------------------------------------------------
Electronic Arts, Inc. 1                                      200         13,572
- --------------------------------------------------------------------------------
Fair, Isaac & Co., Inc.                                      500         21,900
- --------------------------------------------------------------------------------
Microsoft Corp. 1                                          2,000        115,360
- --------------------------------------------------------------------------------
Oracle Corp. 1                                               900         10,935
- --------------------------------------------------------------------------------
Reynolds & Reynolds Co., Cl. A                               400         10,668
- --------------------------------------------------------------------------------
Sybase, Inc. 1                                               500          6,660
- --------------------------------------------------------------------------------
Symantec Corp. 1                                             600         26,238
- --------------------------------------------------------------------------------
Take-Two Interactive Software, Inc. 1                        200          5,986
                                                                        --------
                                                                         220,251

- --------------------------------------------------------------------------------
Materials--1.4%
- --------------------------------------------------------------------------------
Chemicals--0.5%
Du Pont (E.I.) de Nemours & Co.                              300         13,386
- --------------------------------------------------------------------------------
Engelhard Corp.                                              100          2,424
- --------------------------------------------------------------------------------
Hercules, Inc. 1                                             900          8,478
- --------------------------------------------------------------------------------
Monsanto Co.                                                  17            299
- --------------------------------------------------------------------------------
PolyOne Corp.                                                500          3,900
- --------------------------------------------------------------------------------
PPG Industries, Inc.                                         100          5,008
                                                                        --------
                                                                          33,495

             9 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND

STATEMENT OF INVESTMENTS  Continued
- --------------------------------------------------------------------------------

                                                                    Market Value
                                                             Shares   See Note 1
- --------------------------------------------------------------------------------
 Construction Materials--0.1%
 Lafarge North America, Inc.                                  200      $  6,420
- --------------------------------------------------------------------------------
 Containers & Packaging--0.2%
 Ball Corp.                                                   200         9,896
- --------------------------------------------------------------------------------
 Owens-Illinois, Inc. 1                                       200         3,140
                                                                     -----------
                                                                          13,036

- --------------------------------------------------------------------------------
 Metals & Mining--0.3%
 Steel Dynamics, Inc. 1                                       900        12,780
- --------------------------------------------------------------------------------
 United States Steel Corp.                                    600         8,688
                                                                     -----------
                                                                          21,468

- --------------------------------------------------------------------------------
 Paper & Forest Products--0.3%
 Georgia-Pacific Corp.                                        600        12,438
- --------------------------------------------------------------------------------
 International Paper Co.                                      100         3,925
                                                                     -----------
                                                                          16,363
- --------------------------------------------------------------------------------
 Telecommunication Services--3.2%
- --------------------------------------------------------------------------------
 Diversified Telecommunication Services--2.5%
 Alltel Corp.                                                 100         5,508
- --------------------------------------------------------------------------------
 BellSouth Corp.                                              900        25,020
- --------------------------------------------------------------------------------
 CenturyTel, Inc.                                             200         6,176
- --------------------------------------------------------------------------------
 SBC Communications, Inc.                                   1,500        42,750
- --------------------------------------------------------------------------------
 Sprint Corp. (Fon Group)                                   2,000        29,160
- --------------------------------------------------------------------------------
 Verizon Communications, Inc.                               1,100        46,068
                                                                     -----------
                                                                         154,682

- --------------------------------------------------------------------------------
 Wireless Telecommunication Services--0.7%
 AT&T Corp.                                                   140         3,926
- --------------------------------------------------------------------------------
 AT&T Wireless Services, Inc. 1                             2,486        18,769
- --------------------------------------------------------------------------------
 Nextel Communications, Inc., Cl. A 1                       1,600        22,000
                                                                     -----------
                                                                          44,695

- --------------------------------------------------------------------------------
 Utilities--1.5%
- --------------------------------------------------------------------------------
 Electric Utilities--1.2%
 Alliant Energy Corp.                                         700        11,396
- --------------------------------------------------------------------------------
 CenterPoint Energy, Inc.                                     500         3,825
- --------------------------------------------------------------------------------
 Cleco Corp.                                                  100         1,358
- --------------------------------------------------------------------------------
 Dominion Resources, Inc.                                     100         5,095
- --------------------------------------------------------------------------------
 Duke Energy Corp.                                            400         7,896
- --------------------------------------------------------------------------------
 Edison International 1                                     1,000        11,090
- --------------------------------------------------------------------------------
 Exelon Corp.                                                 200        10,038
- --------------------------------------------------------------------------------
 PG&E Corp. 1                                                 700         9,667
- --------------------------------------------------------------------------------
 Public Service Enterprise Group, Inc.                        300         8,982
- --------------------------------------------------------------------------------
 TXU Corp.                                                    200         3,084
                                                                     -----------
                                                                          72,431

                                                                    Market Value
                                                       Shares         See Note 1
- --------------------------------------------------------------------------------
 Gas Utilities--0.3%
 Nicor, Inc.                                                  200    $    6,302
- --------------------------------------------------------------------------------
 NiSource, Inc.                                               200         3,898
- --------------------------------------------------------------------------------
 Sempra Energy                                                400         9,268
                                                                     -----------
                                                                          19,468
                                                                     -----------
 Total Common Stocks (Cost $4,476,250)                                4,166,206
                                                                           Units
- --------------------------------------------------------------------------------
 Rights, Warrants and Certificates--0.0%

 Liberty Media Corp., Cl. A Rts.,
 Exp. 12/2/02 1 (Cost $0)                                      28           129

                                                        Principal
                                                                          Amount
- --------------------------------------------------------------------------------
 U.s. Government Obligations--22.9%
 U.S. Treasury Bonds, 6.50%, 11/15/26                 $    50,000        58,600
- --------------------------------------------------------------------------------
 U.S. Treasury Nts.:
 3.50%, 11/15/06                                          175,000       178,534
 5%, 2/15/11                                               50,000        53,227
 5.25%, 5/15/04                                           185,000       194,337
 5.75%, 11/15/05                                          855,000       933,153
                                                                     -----------
 Total U.S. Government Obligations (Cost $1,360,970)                  1,417,851

- --------------------------------------------------------------------------------
 Short-Term Notes--1.2%
 U.S. Treasury Bills, 1.66%, 12/19/02 2
 (Cost $74,938)                                            75,000        74,938

- --------------------------------------------------------------------------------
 Joint Repurchase Agreements--8.7%
 Undivided interest of 0.12% in joint repurchase agreement
 (Market Value $453,323,000) with Banc One Capital Markets, Inc.,
 1.29%, dated 11/29/02, to be repurchased at $538,058 on 12/2/02,
 collateralized by U.S. Treasury Nts., 1.875%--7%, 3/31/03--8/15/11,
 with a value of $408,234,710 and U.S. Treasury Bonds, 6.25%
 --10.625%, 8/15/15--8/15/23, with a value of $55,304,803
 (Cost $538,000)                                          538,000       538,000

- --------------------------------------------------------------------------------
 Total Investments, at Value
 (Cost $6,450,158)                                          100.0%    6,197,124
- --------------------------------------------------------------------------------
 Other Assets Net of Liabilities                              0.0           233
                                                      --------------------------
 Net Assets                                                 100.0%   $6,197,357
                                                      ==========================


Footnotes to Statement of Investments
1. Non-income producing security.
2. Securities with an aggregate market value of $74,938 are held in
collateralized accounts to cover initial margin requirements on open futures
sales contracts. See Note 5 of Notes to Financial Statements.

See accompanying Notes to Financial Statements.

            10 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


STATEMENT OF ASSETS AND LIABILITIES  November 30, 2002
- --------------------------------------------------------------------------------



Assets
Investments, at value (cost $6,450,158)--see accompanying statement           $6,197,124
- -----------------------------------------------------------------------------------------
Receivables and other assets:
Daily variation on futures contracts                                              14,728
Interest and dividends                                                            10,604
Shares of beneficial interest sold                                                 1,633
Other                                                                              1,024
                                                                              -----------
Total assets                                                                   6,225,113

- -----------------------------------------------------------------------------------------
Liabilities
Bank overdraft                                                                    13,006
- -----------------------------------------------------------------------------------------
Payables and other liabilities:
Legal, auditing and other professional fees                                        7,424
Shareholder reports                                                                5,305
Transfer and shareholder servicing agent fees                                        451
Distribution and service plan fees                                                   388
Trustees' compensation                                                               323
Other                                                                                859
                                                                              -----------
Total liabilities                                                                 27,756

- -----------------------------------------------------------------------------------------
Net Assets                                                                    $6,197,357
                                                                              ===========

- -----------------------------------------------------------------------------------------
Composition of Net Assets
Paid-in Capital                                                               $7,015,039
- -----------------------------------------------------------------------------------------
Undistributed net investment income                                               47,740
- -----------------------------------------------------------------------------------------
Accumulated net realized loss on investment transactions                        (651,350)
- -----------------------------------------------------------------------------------------
Net unrealized depreciation on investments                                      (214,072)
                                                                              -----------
Net Assets                                                                    $6,197,357
                                                                              ===========



            11 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


STATEMENT OF ASSETS AND LIABILITIES  Continued
- --------------------------------------------------------------------------------



- -----------------------------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share (based on net assets of
$4,898,145 and  572,702 shares of beneficial interest outstanding)
Maximum offering price per share (net asset value plus sales charge of             $8.55
5.75% of offering price)                                                           $9.07
- -----------------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $455,259 and 53,951
shares of beneficial interest outstanding) $8.44
- -----------------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $521,465 and 61,789
shares of beneficial interest outstanding) $8.44
- -----------------------------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $321,631 and 37,765
shares of beneficial interest outstanding) $8.52
- -----------------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on
net assets of $857 and  100 shares of beneficial interest outstanding)             $8.57



See accompanying Notes to Financial Statements.


            12 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


STATEMENT OF OPERATIONS  FOR THE YEAR ENDED NOVEMBER 30, 2002
- --------------------------------------------------------------------------------




- --------------------------------------------------------------------------------------------------------------------------

Investment Income
Interest                                                                                                       $  89,161
- --------------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign withholding taxes of $96)                                                               53,691
                                                                                                               -----------
Total investment income                                                                                          142,852

- --------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees                                                                                                   53,310
- --------------------------------------------------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                                                                              281
Class B                                                                                                            2,536
Class C                                                                                                            4,667
Class N                                                                                                              731
- --------------------------------------------------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                                                                            3,288
Class B                                                                                                              827
Class C                                                                                                            1,100
Class N                                                                                                              423
Class Y                                                                                                              866
- --------------------------------------------------------------------------------------------------------------------------
Shareholder reports                                                                                               14,249
- --------------------------------------------------------------------------------------------------------------------------
Legal, auditing and other professional fees                                                                        6,878
- --------------------------------------------------------------------------------------------------------------------------
Trustees' compensation                                                                                             3,963
- --------------------------------------------------------------------------------------------------------------------------
Custodian fees and expenses                                                                                           23
- --------------------------------------------------------------------------------------------------------------------------
Other                                                                                                              1,674
                                                                                                               -----------
Total expenses                                                                                                    94,816
Less voluntary reimbursement of expenses                                                                          (5,116)
Less voluntary waiver of transfer and shareholder servicing agent fees--Classes A, B, C and N                       (545)
Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y                                     (863)
                                                                                                               -----------
Net expenses                                                                                                      88,292

- --------------------------------------------------------------------------------------------------------------------------
Net Investment Income                                                                                             54,560

- --------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Loss Net realized loss on:
Investments                                                                                                     (283,951)
Closing of futures contracts                                                                                    (134,425)
                                                                                                               -----------
Net realized loss                                                                                               (418,376)

- --------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation on investments                                                            (118,544)
                                                                                                               -----------
Net realized and unrealized loss                                                                                (536,920)

- --------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations                                                           $(482,360)
                                                                                                               ===========




See accompanying Notes to Financial Statements.


            13 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------




Year Ended November 30,                                                                                       2002          2001 1
- ------------------------------------------------------------------------------------------------------------------------------------

Operations
Net investment income                                                                                   $   54,560    $     44,954
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized loss                                                                                         (418,376)       (232,974)
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized depreciation                                                                     (118,544)        (95,528)
                                                                                                        ----------------------------
Net decrease in net assets resulting from operations                                                      (482,360)       (283,548)

- ------------------------------------------------------------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders Dividends from net investment
income:
Class A                                                                                                    (49,625)             --
Class B                                                                                                       (947)             --
Class C                                                                                                     (3,716)             --
Class N                                                                                                       (358)             --
Class Y                                                                                                        (12)             --

- ------------------------------------------------------------------------------------------------------------------------------------

Beneficial Interest Transactions
Net increase in net assets resulting from beneficial interest transactions:
Class A                                                                                                    534,329       5,098,701
Class B                                                                                                    376,649          98,964
Class C                                                                                                    207,640         358,757
Class N                                                                                                    284,637          40,246
Class Y                                                                                                         --              --

- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets
Total increase                                                                                             866,237       5,313,120
- ------------------------------------------------------------------------------------------------------------------------------------
Beginning of period                                                                                      5,331,120          18,000 2
                                                                                                        ----------------------------
End of period [including undistributed net investment income of $47,740 and $47,838, respectively]      $6,197,357      $5,331,120


1. For the period from February 16, 2001 (inception of offering) to November 30,
   2001.
2. Reflects the value of the Manager's initial seed money investment at December
   22, 2000.


See accompanying Notes to Financial Statements.


            14 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------


                                                                 Class A               Class B               Class C
                                                              Year Ended            Year Ended            Year Ended
                                                                Nov. 30,              Nov. 30,              Nov. 30,
                                                         2002     2001 1       2002     2001 1       2002     2001 1
- ----------------------------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                   $ 9.44     $10.00     $ 9.37     $10.00     $ 9.38     $10.00
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                     .09        .09        .07        .01        .05        .01
Net realized and unrealized loss                         (.88)      (.65)      (.92)      (.64)      (.90)      (.63)
                                                       ---------------------------------------------------------------
Total from investment operations                         (.79)      (.56)      (.85)      (.63)      (.85)      (.62)
- ----------------------------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                     (.10)        --       (.08)        --       (.09)        --
- ----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period                         $ 8.55     $ 9.44     $ 8.44     $ 9.37     $ 8.44     $ 9.38
                                                       ===============================================================

- ----------------------------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2                      (8.49)%    (5.60)%    (9.11)%    (6.30)%    (9.12)%    (6.20)%

- ----------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)               $4,898     $4,829     $  455     $  100     $  521     $  363
- ----------------------------------------------------------------------------------------------------------------------
Average net assets (in thousands)                      $4,744     $4,739     $  255     $   32     $  467     $   68
- ----------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets: 3
Net investment income                                    1.08%      1.19%      0.28%      0.50%      0.29%      0.46%
Expenses                                                 1.51%      1.53%      2.75%      2.44%      2.67%      2.43%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees           1.41%      1.51%      2.64%      2.17%      2.56%      2.04%
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate                                    73%        32%        73%        32%        73%        32%


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

            15 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


FINANCIAL HIGHLIGHTS  Continued
- --------------------------------------------------------------------------------


                                                                    Class N               Class Y
                                                                 Year Ended            Year Ended
                                                                   Nov. 30, Nov.
                                                            30, 2002 2001 1 2002
                                                            2001 2
- ---------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                      $ 9.41     $ 9.75     $ 9.46     $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                        .07        .04        .11        .11
Net realized and unrealized loss                            (.87)      (.38)      (.88)      (.65)
Total from investment operations                            (.80)      (.34)      (.77)      (.54)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                        (.09)        --       (.12)        --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period                            $ 8.52     $ 9.41     $ 8.57     $ 9.46
                                                          =========================================

- ---------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3                         (8.60)%    (3.49)%    (8.27)%    (5.40)%

- ---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data

Net assets, end of period (in thousands)                  $  322     $   38     $    1     $    1
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands)                         $  147     $   24     $    1     $    1
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income                                       0.76%      0.84%      1.24%      1.39%
Expenses                                                    2.22%      1.94%     88.03%    501.51%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees              2.12%      1.79%      1.54%      1.28%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate                                       73%        32%        73%        32%



1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

            16 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Select Managers QM Active Balanced Fund (the Fund), a series of
Oppenheimer Select Managers, is an open-end management investment company
registered under the Investment Company Act of 1940, as amended. The Fund's
investment objective is to seek income and long-term growth of capital. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager
has entered into a sub-advisory agreement with The Prudential Investment Corp.
(the Sub-Advisor).
     The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per share
may differ by minor amounts due to each class having its own expenses directly
attributable to that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares six years after the date of
purchase.
     The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint repurchase
agreement accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal; however,
in the event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
     During the fiscal year ended November 30, 2002, the Fund did not utilize
any capital loss carryforward.


            17 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND

NOTES TO FINANCIAL STATEMENTS Continued

As of November 30, 2002, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:

EXPIRING
- ----------------------
2009          $197,620
2010           412,104
              --------
Total         $609,724
              ========

As of November 30, 2002, the Fund had approximately $3,000 of post-October
losses available to offset future capital gains, if any. Such losses, if
unutilized, will expire in 2011.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax
purposes. The character of dividends and distributions made during the fiscal
year from net investment income or net realized gains may differ from their
ultimate characterization for federal income tax purposes. Also, due to timing
of dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or net realized gain was
recorded by the Fund.

The tax character of distributions paid during the year ended November 30, 2002
and the period ended November 30, 2001 was as follows:

                                                Year Ended          Period Ended
                                         November 30, 2002     November 30, 2001
             -------------------------------------------------------------------
             Distributions paid from:
             Ordinary income                      $ 54,658                   $--
             Long-term capital gain                     --                    --
             Return of capital                          --                    --
                                                  ------------------------------
             Total                                $ 54,658                   $--
                                                  ==============================

As of November 30, 2002, the components of distributable earnings on a tax basis
were as follows:

             Undistributed net investment income  $  47,740
             Accumulated net realized loss         (651,350)
             Net unrealized depreciation           (214,072)
                                                  ---------
             Total                                $(817,682)
                                                  =========

- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial state-ments and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.

            18 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND



- --------------------------------------------------------------------------------
 2. Shares of Beneficial Interest
 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:



                                                         Year Ended November 30, 2002      Period Ended November 30, 2001 1
                                                             Shares            Amount              Shares            Amount
 ------------------------------------------------------------------------------------------------------------------------------

 Class A
 Sold                                                        86,940         $ 763,888             518,964       $ 5,179,848
 Dividends and/or distributions reinvested                       88               829                  --                --
 Redeemed                                                   (26,054)         (230,388)             (8,736)          (81,147)
                                                            -------------------------------------------------------------------
 Net increase                                                60,974         $ 534,329             510,228       $ 5,098,701
                                                            ===================================================================

 ------------------------------------------------------------------------------------------------------------------------------
 Class B
 Sold                                                        54,765         $ 476,135              12,037       $   112,429
 Dividends and/or distributions reinvested                      100               938                  --                --
 Redeemed                                                   (11,601)         (100,424)             (1,450)          (13,465)
                                                            -------------------------------------------------------------------
 Net increase                                                43,264         $ 376,649              10,587       $    98,964
                                                            ===================================================================

 ------------------------------------------------------------------------------------------------------------------------------
 Class C
 Sold                                                        34,916         $ 305,372              38,622       $   359,346
 Dividends and/or distributions reinvested                      398             3,706                  --                --
 Redeemed                                                   (12,182)         (101,438)                (65)             (589)
                                                            -------------------------------------------------------------------
 Net increase                                                23,132         $ 207,640              38,557       $   358,757
                                                            ===================================================================

 ------------------------------------------------------------------------------------------------------------------------------
 Class N
 Sold                                                        34,605         $ 291,806               9,462       $    93,952
 Dividends and/or distributions reinvested                       37               348                  --                --
 Redeemed                                                      (920)           (7,517)             (5,419)          (53,706)
                                                            -------------------------------------------------------------------
 Net increase                                                33,722         $ 284,637               4,043       $    40,246
                                                            ===================================================================

 ------------------------------------------------------------------------------------------------------------------------------
 Class Y
 Sold                                                            --         $      --                  --       $        --
 Dividends and/or distributions reinvested                       --                --                  --                --
 Redeemed                                                        --                --                  --                --
                                                            -------------------------------------------------------------------
 Net increase (decrease)                                         --         $      --                  --       $        --
                                                            ===================================================================


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001, for Class A, B, C and Y shares and for the period from March 1, 2001
(inception of offering) to November 30, 2001, for Class N shares.

            19 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended November 30, 2002, were
$4,821,683 and $3,663,873, respectively.

As of November 30, 2002, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $6,450,158 was composed of:


Gross unrealized appreciation       $  285,895
Gross unrealized depreciation         (538,929)
                                    ----------
Net unrealized depreciation         $ (253,034)
                                    ==========

The difference between book-basis and tax-basis unrealized appreciation and
depreciation, if applicable, is attributable primarily to the tax deferral of
losses on wash sales, or return of capital dividends, and the realization for
tax purposes of unrealized gain (loss) on certain futures contracts, investments
in passive foreign investment companies, and forward foreign currency exchange
contracts.
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.95% of the first $300 million of average annual net assets of
the Fund and 0.90% of average annual net assets in excess of $300 million. The
Manager has voluntarily undertaken to assume certain Fund expenses. The Manager
reserves the right to amend or terminate that expense assumption at any time.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager has retained The Prudential Investment Corp. as
the Sub-Advisor to provide the day-to-day portfolio management of the Fund. For
the year ended November 30, 2002, the Manager paid $24,903 to the Sub-Advisor.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a $19.75 per account fee.
     Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
     OFS has voluntarily agreed to limit transfer and shareholder servicing
agent fees up to an annual rate of 0.35% for all classes. Effective November 1,
2002, Class Y shares were changed from 0.25% to 0.35%. This undertaking may be
amended or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12B-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.


            20 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates Continued The compensation paid
to (or retained by) the Distributor from the sale of shares or on the redemption
of shares is shown in the table below for the period indicated.



                                  Aggregate          Class A       Concessions       Concessions      Concessions       Concessions
                                  Front-End        Front-End        on Class A        on Class B       on Class C        on Class N
                              Sales Charges    Sales Charges            Shares            Shares           Shares            Shares
                                 on Class A      Retained by       Advanced by       Advanced by      Advanced by       Advanced by
 Year Ended                          Shares      Distributor     Distributor 1     Distributor 1    Distributor 1     Distributor 1
- -----------------------------------------------------------------------------------------------------------------------------------

 November 30, 2002                   $6,890           $1,094              $121           $14,392           $3,011            $2,750


1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.



                                            Class A                   Class B                   Class C                    Class N
                                Contingent Deferred       Contingent Deferred       Contingent Deferred        Contingent Deferred
                                      Sales Charges             Sales Charges             Sales Charges              Sales Charges
                                        Retained by               Retained by               Retained by                Retained by
 Year Ended                             Distributor               Distributor               Distributor                Distributor
- -----------------------------------------------------------------------------------------------------------------------------------

 November 30, 2002                              $--                    $2,303                      $168                        $27
- -----------------------------------------------------------------------------------------------------------------------------------


 Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
 A shares. It reimburses the Distributor for a portion of its costs incurred for
 services provided to accounts that hold Class A shares. Reimbursement is made
 quarterly at an annual rate of up to 0.25% of the average annual net assets of
 Class A shares of the Fund. For the year ended November 30, 2002, payments
 under the Class A Plan totaled $281, all of which were paid by the Distributor
 to recipients, and included $60 paid to an affiliate of the Manager. Any
 unreimbursed expenses the Distributor incurs with respect to Class A shares in
 any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
 Distribution and Service Plans for Class B, Class C and Class N Shares. The
 Fund has adopted Distribution and Service Plans for Class B, Class C and Class
 N shares. Under the plans, the Fund pays the Distributor an annual asset-based
 sales charge of 0.75% per year on Class B shares and on Class C shares and the
 Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
 on Class N shares. The Distributor also receives a service fee of 0.25% per
 year under each plan.

 Distribution fees paid to the Distributor for the year ended November 30, 2002,
 were as follows:



                                                                                                           Distributor's Aggregate
                                                                                 Distributor's Aggregate              Unreimbursed
                                      Total Payments           Amount Retained     Unreimbursed Expenses          Expenses as % of
                                          Under Plan            by Distributor                Under Plan       Net Assets of Class
- -----------------------------------------------------------------------------------------------------------------------------------

 Class B Plan                                 $2,536                    $2,334                   $40,973                      9.00%
 Class C Plan                                  4,667                     3,858                    26,366                      5.06
 Class N Plan                                    731                       561                    14,271                      4.44


- --------------------------------------------------------------------------------
 5. Futures Contracts
 A futures contract is a commitment to buy or sell a specific amount of a
 commodity or financial instrument at a particular price on a stipulated future
 date at a negotiated price. Futures contracts are traded on a commodity
 exchange. The Fund may buy and sell futures contracts that relate to broadly
 based securities indices "financial futures" or debt securities "interest rate
 futures" in order to gain exposure to or to seek to protect against changes in
 market value of stock and bonds or interest rates. The Fund may also buy or
 write put or call options on these futures contracts.
    The Fund generally sells futures contracts to hedge against increases in
 interest rates and decreases in market value of portfolio securities. The Fund
 may also purchase futures contracts to gain exposure to market changes as it
 may be more efficient or cost effective than actually buying fixed income
 securities.


            21 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND



NOTES TO FINANCIAL STATEMENTS  Continued

    Upon entering into a futures contract, the Fund is required to deposit
 either cash or securities (initial margin) in an amount equal to a certain
 percentage of the contract value. Subsequent payments (variation margin) are
 made or received by the Fund each day. The variation margin payments are equal
 to the daily changes in the contract value and are recorded as unrealized gains
 and losses. The Fund recognizes a realized gain or loss when the contract is
 closed or expires.
    Securities held in collateralized accounts to cover initial margin
 requirements on open futures contracts are noted in the Statement of
 Investments. The Statement of Assets and Liabilities reflects a receivable
 and/or payable for the daily mark to market for variation margin. Realized
 gains and losses are reported in the Statement of Operations as closing and
 expiration of futures contracts.
    Risks of entering into futures contracts (and related options) include the
 possibility that there may be an illiquid market and that a change in the value
 of the contract or option may not correlate with changes in the value of the
 underlying securities.

 As of November 30, 2002 had outstanding futures contracts as follows:



                                          Expiration                 Number of           Valuation as of            Unrealized
 Contract Description                           Date                 Contracts         November 30, 2002          Appreciation
- ------------------------------------------------------------------------------------------------------------------------------

 Contracts to Purchase
 Standard & Poor's 500 E-Mini               12/20/02                        12                  $561,600               $38,963

- --------------------------------------------------------------------------------
 6. Borrowing and Lending Arrangements
 Bank Borrowings. Until November 12, 2002, the Fund had the ability to borrow
 from a bank for temporary or emergency purposes provided asset coverage for
 borrowings exceeded 300%. The Fund and other Oppenheimer funds participated in
 a $400 million unsecured line of credit with a bank. Under that unsecured line
 of credit, interest was charged to each fund, based on its borrowings, at a
 rate equal to the Federal Funds Rate plus 0.45%. Under that credit facility,
 the Fund paid a commitment fee equal to its pro rata share of the average
 unutilized amount of the credit facility at a rate of 0.08% per annum.
- --------------------------------------------------------------------------------
 Interfund Borrowing and Lending Arrangements. Effective November 12, 2002, the
 following interfund borrowing and lending arrangements went into effect.
 Consistent with its fundamental policies and pursuant to an exemptive order
 issued by the Securities and Exchange Commission ("SEC"), the Fund may engage
 in borrowing and lending activities with other funds in the OppenheimerFunds
 complex. Borrowing money from affiliated funds may afford the Fund the
 flexibility to use the most cost-effective alternative to satisfy its borrowing
 requirements. Lending money to an affiliated fund may allow the Fund to obtain
 a higher rate of return than it could from interest rates on alternative
 short-term investments. Implementation of interfund lending will be
 accomplished consistent with applicable regulatory requirements, including the
 provisions of the SEC order. There is a risk that a borrowing fund could have a
 loan called on one day's notice. In that circumstance, the Fund might have to
 borrow from a bank at a higher interest cost if money to lend were not
 available from another Oppenheimer fund. When the Fund lends assets to another
 affiliated fund, the Fund is subject to the risk that the borrowing fund fails
 to repay the loan.
    The Fund had no borrowing or lending arrangements outstanding during the
 year ended or at November 30, 2002.


            22 | OPPENHEIMER SELECT MANAGERS QM ACTIVE BALANCED FUND


INDEPENDENT AUDITORS' REPORT


================================================================================
 To the Board of Trustees and Shareholders of
 Oppenheimer Select Managers Jennison Growth Fund:
 We have audited the accompanying statement of assets and liabilities of
 Oppenheimer Select Managers Jennison Growth Fund, which is a series of
 Oppenheimer Select Managers, including the statement of investments, as of
 November 30, 2002, and the related statement of operations for the year then
 ended, the statements of changes in net assets and the financial highlights for
 the periods indicated. These financial statements and financial highlights are
 the responsibility of the Fund's management. Our responsibility is to express
 an opinion on these financial statements and financial highlights based on our
 audits.
    We conducted our audits in accordance with auditing standards generally
 accepted in the United States of America. Those standards require that we plan
 and perform the audit to obtain reasonable assurance about whether the
 financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence supporting
 the amounts and disclosures in the financial statements. Our procedures
 included confirmation of securities owned as of November 30, 2002, by
 correspondence with the custodian and brokers; where replies were not received
 from brokers, we performed other auditing procedures. An audit also includes
 assessing the accounting principles used and significant estimates made by
 management, as well as evaluating the overall financial statement presentation.
 We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the financial statements and financial highlights referred
 to above present fairly, in all material respects, the financial position of
 Oppenheimer Select Managers Jennison Growth Fund as of November 30, 2002, the
 results of its operations for the year then ended, the changes in its net
 assets and the financial highlights for the periods indicated, in conformity
 with accounting principles generally accepted in the United States of America.


 /s/ Deloitte & Touche LLP
 -------------------------
 Deloitte & Touche LLP

 Denver, Colorado
 December 20, 2002




STATEMENT OF INVESTMENTS  November 30, 2002

                                                                   Market Value
                                                          Shares     See Note 1
===============================================================================
 Common Stocks--93.1%
- -------------------------------------------------------------------------------
 Consumer Discretionary--22.9%
- -------------------------------------------------------------------------------
 Automobiles--1.5%
 Harley-Davidson, Inc.                                     3,100     $  150,474
- -------------------------------------------------------------------------------
 Hotels, Restaurants & Leisure--2.6%
 Marriott International, Inc., Cl. A                       4,200        150,150
- -------------------------------------------------------------------------------
 Starbucks Corp. 1                                         4,700        102,178
                                                                     ----------
                                                                         252,328

- -------------------------------------------------------------------------------
 Internet & Catalog Retail--0.7%
 USA Interactive, Inc. 1                                   2,500         69,500
- -------------------------------------------------------------------------------
 Media--6.4%
 Clear Channel Communications, Inc. 1                        300         13,038
- -------------------------------------------------------------------------------
 New York Times Co., Cl. A                                 2,800        134,512
- -------------------------------------------------------------------------------
 Omnicom Group, Inc.                                         900         61,245
- -------------------------------------------------------------------------------
 Univision Communications, Inc., Cl. A 1                   4,800        154,272
- -------------------------------------------------------------------------------
 Viacom, Inc., Cl. B 1                                     5,700        267,957
                                                                     ----------
                                                                         631,024

- -------------------------------------------------------------------------------
 Multiline Retail--7.1%
 Costco Wholesale Corp. 1                                  4,200        135,660
- -------------------------------------------------------------------------------
 Kohl's Corp. 1                                            4,000        274,000
- -------------------------------------------------------------------------------
 Wal-Mart Stores, Inc.                                     5,200        281,632
                                                                     ----------
                                                                         691,292

- -------------------------------------------------------------------------------
 Specialty Retail--4.6%
 Bed Bath & Beyond, Inc. 1                                 4,900        169,981
- -------------------------------------------------------------------------------
 Lowe's Cos., Inc.                                         3,700        153,550
- -------------------------------------------------------------------------------
 Tiffany & Co.                                             4,500        127,710
                                                                     ----------
                                                                         451,241

- -------------------------------------------------------------------------------
 Consumer Staples--5.5%
- -------------------------------------------------------------------------------
 Beverages--2.3%
 Anheuser-Busch Cos., Inc.                                 2,300        112,976
- -------------------------------------------------------------------------------
 Coca-Cola Co. (The)                                       2,500        114,100
                                                                     ----------
                                                                         227,076

- -------------------------------------------------------------------------------
 Food & Drug Retailing--1.1%
 Walgreen Co.                                              3,600        103,644
- -------------------------------------------------------------------------------
 Household Products--1.1%
 Procter & Gamble Corp. (The)                              1,300        109,200
- -------------------------------------------------------------------------------
 Personal Products--1.0%
 Gillette Co.                                              3,400        103,088

                            9 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



STATEMENT OF INVESTMENTS  CONTINUED


                                                                   Market Value
                                                          Shares     See Note 1
- -------------------------------------------------------------------------------
 ENERGY--4.1%
- -------------------------------------------------------------------------------
 Energy Equipment & Services--2.3%
 Schlumberger Ltd.                                         5,000     $  221,250
- -------------------------------------------------------------------------------
 Oil & Gas--1.8%
 TotalFinaElf SA, Sponsored ADR                            2,700        180,225
- -------------------------------------------------------------------------------
 Financials--16.0%
- -------------------------------------------------------------------------------
 Banks--1.6%
 Bank One Corp.                                            3,900        154,011
- -------------------------------------------------------------------------------
 Diversified Financials--8.8%
 American Express Co.                                      5,800        225,794
- -------------------------------------------------------------------------------
 Citigroup, Inc.                                           7,100        276,048
- -------------------------------------------------------------------------------
 Goldman Sachs Group, Inc. (The)                           2,500        197,175
- -------------------------------------------------------------------------------
 Merrill Lynch & Co., Inc.                                 3,600        156,600
                                                                     ----------
                                                                         855,617

- -------------------------------------------------------------------------------
 Insurance--5.6%
 American International Group, Inc.                        4,500        293,175
- -------------------------------------------------------------------------------
 Hartford Financial Services Group, Inc.                   2,400        117,744
- -------------------------------------------------------------------------------
 XL Capital Ltd., Cl. A                                    1,700        140,658
                                                                     ----------
                                                                         551,577

- -------------------------------------------------------------------------------
 Health Care--15.5%
- -------------------------------------------------------------------------------
 Biotechnology--5.8%
 Amgen, Inc. 1                                             4,800        226,560
- -------------------------------------------------------------------------------
 Genentech, Inc. 1                                         3,200        105,600
- -------------------------------------------------------------------------------
 Medimmune, Inc. 1                                         2,700         71,226
- -------------------------------------------------------------------------------
 Wyeth                                                     4,300        165,249
                                                                     ----------
                                                                         568,635

- -------------------------------------------------------------------------------
 Health Care Providers & Services--1.7%
- -------------------------------------------------------------------------------
 AmerisourceBergen Corp.                                   1,500         87,030
- -------------------------------------------------------------------------------
 UnitedHealth Group, Inc.                                  1,000         81,450
                                                                     ----------
                                                                         168,480

- -------------------------------------------------------------------------------
 Pharmaceuticals--8.0%
 Abbott Laboratories                                       5,100        223,278
- -------------------------------------------------------------------------------
 Johnson & Johnson                                         4,500        256,590
- -------------------------------------------------------------------------------
 Pfizer, Inc.                                              3,300        104,082
- -------------------------------------------------------------------------------
 Pharmacia Corp.                                           3,400        143,820
- -------------------------------------------------------------------------------
 Teva Pharmaceutical Industries Ltd., ADR                    600         47,436
                                                                     ----------
                                                                         775,206

                           10 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND




                                                                   Market Value
                                                          Shares     See Note 1
- -------------------------------------------------------------------------------
 Industrials--5.1%
- -------------------------------------------------------------------------------
 Aerospace & Defense--3.1%
 Boeing Co.                                                1,400     $   47,600
- -------------------------------------------------------------------------------
 Lockheed Martin Corp.                                     2,100        109,620
- -------------------------------------------------------------------------------
 Northrop Grumman Corp.                                    1,500        145,365
                                                                     ----------
                                                                         302,585

- -------------------------------------------------------------------------------
 Industrial Conglomerates--2.0%
 3M Co.                                                    1,500        194,775
- -------------------------------------------------------------------------------
 Information Technology--21.1%
- -------------------------------------------------------------------------------
 Communications Equipment--3.7%
 Cisco Systems, Inc. 1                                    16,200        241,704
- -------------------------------------------------------------------------------
 Nokia Corp., Sponsored ADR, A Shares                      6,400        122,944
                                                                     ----------
                                                                         364,648

- -------------------------------------------------------------------------------
 Computers & Peripherals--5.7%
 Dell Computer Corp. 1                                     7,400        211,640
- -------------------------------------------------------------------------------
 Hewlett-Packard Co.                                      11,400        222,072
- -------------------------------------------------------------------------------
 International Business Machines Corp.                     1,400        121,940
                                                                     ----------
                                                                         555,652

- -------------------------------------------------------------------------------
 Semiconductor Equipment & Products--7.7%
 Applied Materials, Inc. 1                                 5,900        100,595
- -------------------------------------------------------------------------------
 Intel Corp.                                              11,500        240,120
- -------------------------------------------------------------------------------
 Novellus Systems, Inc. 1                                  1,600         58,064
- -------------------------------------------------------------------------------
 STMicroelectronics NV, NY Registered Shares               2,100         53,340
- -------------------------------------------------------------------------------
 Texas Instruments, Inc.                                   8,400        168,924
- -------------------------------------------------------------------------------
 Xilinx, Inc. 1                                            5,200        128,128
                                                                     ----------
                                                                         749,171

- -------------------------------------------------------------------------------
 Software--4.0%
 Microsoft Corp. 1                                         6,800        392,224
- -------------------------------------------------------------------------------
 Materials--2.9%
- -------------------------------------------------------------------------------
 Paper & Forest Products--2.9%
 International Paper Co.                                   4,400        172,700
- -------------------------------------------------------------------------------
 Weyerhaeuser Co.                                          2,200        115,720
                                                                     ----------
                                                                         288,420
                                                                     ----------
Total Common Stocks (Cost $9,333,773)                                 9,111,343

                           11 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



STATEMENT OF INVESTMENTS  CONTINUED

                                                     PRINCIPAL     MARKET VALUE
                                                      AMOUNT         SEE NOTE 1
===============================================================================
 JOINT REPURCHASE AGREEMENTS--6.8%
 Undivided interest of 0.15% in joint repurchase
 agreement (Market Value $453,323,000) with Banc
 One Capital Markets, Inc., 1.29%, dated 11/29/02,
 to be repurchased at $668,072 on 12/2/02,
 collateralized by U.S. Treasury Nts.,
 1.875%--7%, 3/31/03--8/15/11, with A value of
 $408,234,710 and U.S. Treasury Bonds,
 6.25%--10.625%, 8/15/15--8/15/23, with a
 value of $55,304,803 (Cost $668,000)                 $668,000         $668,000

- -------------------------------------------------------------------------------
 Total Investments, at Value (Cost $10,001,773)           99.9%       9,779,343
- -------------------------------------------------------------------------------
 Other Assets Net of Liabilities                           0.1            5,435
                                                      -------------------------
 Net Assets                                             100.0%       $9,784,778
                                                      =========================




Footnotes to Statement of Investments
1. Non-income producing security.
See accompanying Notes to Financial Statements.

                           12 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND

 

STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 2002

===============================================================================
 ASSETS
 Investments, at value (cost $10,001,773)
  --see accompanying statement                                       $9,779,343
- -------------------------------------------------------------------------------
 Cash                                                                     6,609
- -------------------------------------------------------------------------------
 Receivables and other assets:
 Investments sold                                                        46,231
 Shares of beneficial interest sold                                      24,190
 Interest and dividends                                                  10,446
 Other                                                                    1,098
                                                                     ----------
 Total assets                                                         9,867,917

===============================================================================
 Liabilities Payables and other liabilities:
 Investments purchased                                                   58,629
 Shareholder reports                                                      7,595
 Legal, auditing and other professional fees                              7,660
 Transfer and shareholder servicing agent fees                            4,774
 Distribution and service plan fees                                       1,719
 Shares of beneficial interest redeemed                                     796
 Trustees' compensation                                                     338
 Other                                                                    1,628
                                                                     ----------
 Total liabilities                                                       83,139

===============================================================================
 Net Assets                                                          $9,784,778
                                                                     ==========

===============================================================================
 Composition of Net Assets
 Paid-in capital                                                    $12,581,386
- -------------------------------------------------------------------------------
 Accumulated net realized loss on investment transactions            (2,574,178)
- -------------------------------------------------------------------------------
 Net unrealized depreciation on investments                            (222,430)
                                                                     ----------
 Net Assets                                                          $9,784,778
                                                                     ==========

                           13 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



STATEMENT OF ASSETS AND LIABILITIES  CONTINUED

===============================================================================
NET ASSET VALUE PER SHARE

Class A Shares:
Net asset value and redemption price per share (based on net
assets of $4,980,878 and 767,137 shares of beneficial interest
outstanding)                                                              $6.49
Maximum offering price per share (net asset
value plus sales charge of 5.75% of offering price)                       $6.89
- -------------------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $1,296,032 and
202,489 shares
of beneficial interest outstanding)                                       $6.40
- -------------------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $2,194,281 and
343,031 shares
of beneficial interest outstanding)                                       $6.40
- -------------------------------------------------------------------------------
Class N Shares: Net asset value, redemption price
(excludes applicable contingent deferred sales charge) and
offering price per share (based on net assets of $1,312,936
and 203,494 shares of beneficial interest outstanding)                    $6.45
- -------------------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share
(based on net assets of $651 and 100 shares of beneficial
interest outstanding)                                                     $6.51

See accompanying Notes to Financial Statements.

                           14 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



STATEMENT OF OPERATIONS FOR THE YEAR ENDED NOVEMBER 30, 2002

===============================================================================
INVESTMENT INCOME
 Dividends (net of foreign withholding taxes of $375)               $    65,038
- -------------------------------------------------------------------------------
 Interest                                                                 8,646
                                                                    -----------
 Total investment income                                                 73,684

===============================================================================
 Expenses
 Management fees                                                         76,321
- -------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                  2,332
 Class B                                                                  6,176
 Class C                                                                 15,244
 Class N                                                                  5,143
- -------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                 21,939
 Class B                                                                  4,300
 Class C                                                                  7,131
 Class N                                                                  6,931
 Class Y                                                                    867
- -------------------------------------------------------------------------------
 Shareholder reports                                                     18,192
- -------------------------------------------------------------------------------
 Legal, auditing and other professional fees                             10,669
- -------------------------------------------------------------------------------
 Trustees' compensation                                                   3,864
- -------------------------------------------------------------------------------
 Custodian fees and expenses                                                 32
- -------------------------------------------------------------------------------
 Other                                                                    2,689
                                                                    -----------
 Total expenses                                                         181,830
 Less voluntary reimbursement of expenses                               (30,828)
 Less voluntary waiver of transfer and shareholder
 servicing agent fees--Classes A, B, C and N                            (10,920)
 Less voluntary waiver of transfer and shareholder
 servicing agent fees--Class Y                                             (863)
                                                                    -----------
 Net expenses                                                           139,219

===============================================================================
 Net Investment Loss                                                    (65,535)

===============================================================================
 Realized and Unrealized Gain (Loss)

 Net realized gain (loss) on:
 Investments                                                         (1,916,063)
 Closing and expiration of option contracts written                         754
                                                                    -----------
 Net realized loss                                                   (1,915,309)
- -------------------------------------------------------------------------------
 Net change in unrealized depreciation on investments                  (167,888)
                                                                    -----------
 Net realized and unrealized loss                                    (2,083,197)

===============================================================================
 Net Decrease in Net Assets Resulting from Operations               $(2,148,732)
                                                                    ============



See accompanying Notes to Financial Statements.

                           15 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



STATEMENTS OF CHANGES IN NET ASSETS

 YEAR ENDED NOVEMBER 30,                                       2002     2001 1
==============================================================================
 OPERATIONS
 Net investment loss                                    $  (65,535) $  (24,066)
- ------------------------------------------------------------------------------
 Net realized loss                                      (1,915,309)   (658,869)
- ------------------------------------------------------------------------------
 Net change in unrealized depreciation                    (167,888)    (54,542)
                                                        ----------------------
 Net decrease in net assets resulting from operations   (2,148,732)   (737,477)

==============================================================================
 Beneficial Interest Transactions

 Net increase in net assets resulting from beneficial interest transactions:
 Class A                                                 1,078,766   5,943,697
 Class B                                                 1,055,537     372,738
 Class C                                                 1,628,681     952,832
 Class N                                                 1,252,822     368,914
 Class Y                                                        --          --

==============================================================================
 Net Assets

 Total increase                                          2,867,074   6,900,704
 Beginning of period                                     6,917,704      17,000 2
                                                        ----------------------
 End of period                                          $9,784,778  $6,917,704
                                                        ======================

1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Reflects the value of the Manager's initial seed money investment at
December 22, 2000.

See accompanying Notes to Financial Statements.

                           16 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



FINANCIAL HIGHLIGHTS



                                                 CLASS A             CLASS B             CLASS C
                                                    Year                Year                Year
                                                   Ended               Ended               Ended
                                                Nov. 30,            Nov. 30,            Nov. 30,
                                          2002    2001 1      2002    2001 1      2002    2001 1
=================================================================================================

 Per Share Operating Data
 Net asset value, beginning of period    $8.56    $10.00     $8.50    $10.00     $8.49    $10.00
- -------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                      (.04)     (.03)     (.02)     (.06)     (.06)     (.02)
 Net realized and unrealized loss        (2.03)    (1.41)    (2.08)    (1.44)    (2.03)    (1.49)
                                         --------------------------------------------------------
 Total from investment operations        (2.07)    (1.44)    (2.10)    (1.50)    (2.09)    (1.51)
- -------------------------------------------------------------------------------------------------
 Net asset value, end of period          $6.49     $8.56     $6.40     $8.50     $6.40     $8.49
                                         ========================================================
=================================================================================================
 Total Return, at Net Asset Value 2     (24.18)%  (14.40)%  (24.71)%  (15.00)%  (24.62)%  (15.10)%

=================================================================================================
 Ratios/Supplemental Data
 Net assets, end of period
 (in thousands)                         $4,981    $5,234    $1,296      $354    $2,194      $968
- -------------------------------------------------------------------------------------------------
 Average net assets (in thousands)      $4,862    $4,683    $  620      $221    $1,528      $232
- -------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                     (0.59)%   (0.50)%   (1.29)%   (1.37)%   (1.32)%   (1.31)%
 Expenses                                 1.89%     1.44%     3.08%     2.45%     2.86%     2.46%
 Expenses, net of voluntary reimbursement
 of expenses and/or voluntary waiver of
 transfer agent fees                      1.39%     1.44%     2.51%     2.24%     2.31%     2.10%
- -------------------------------------------------------------------------------------------------
 Portfolio turnover rate                    77%       56%       77%       56%       77%       56%


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

                           17 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



FINANCIAL HIGHLIGHTS  CONTINUED



                                                           CLASS N             CLASS Y
                                                              Year                Year
                                                             Ended               Ended
                                                          Nov. 30,            Nov. 30,
                                                    2002    2001 1      2002    2001 2
========================================================================================

 Per Share Operating Data
 Net asset value, beginning of period             $ 8.52     $9.45    $ 8.57    $10.00
- ----------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                (.05)     (.02)     (.03)     (.03)
 Net realized and unrealized loss                  (2.02)     (.91)    (2.03)    (1.40)
                                                   -------------------------------------
 Total from investment operations                  (2.07)     (.93)    (2.06)    (1.43)
- ----------------------------------------------------------------------------------------
 Net asset value, end of period                    $6.45     $8.52     $6.51    $ 8.57
                                                   =====================================

========================================================================================
 Total Return, at Net Asset Value 3               (24.30)%   (9.84)%  (24.04)%  (14.30)%

========================================================================================
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)         $1,313      $361        $1        $1
- ----------------------------------------------------------------------------------------
 Average net assets (in thousands)                $1,031      $122        $1        $1
- ----------------------------------------------------------------------------------------
 Ratios to average net assets: 4
 Net investment loss                               (0.82)%   (0.90)%   (0.41)%   (0.38)%
 Expenses                                           2.56%     1.98%    88.09%   501.48%
 Expenses, net of voluntary reimbursement
 of expenses and/or voluntary waiver of
 transfer agent fees                                2.01%     1.71%     1.43%     1.25%
- ----------------------------------------------------------------------------------------
 Portfolio turnover rate                              77%       56%       77%       56%


1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

                           18 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



NOTES TO FINANCIAL STATEMENTS

================================================================================
 1. SIGNIFICANT ACCOUNTING POLICIES
 Oppenheimer Select Managers Jennison Growth Fund (the Fund), a series of
 Oppenheimer Select Managers, is an open-end management investment company
 registered under the Investment Company Act of 1940, as amended. The Fund's
 investment objective is to seek long-term growth of capital. The Fund's
 investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager has
 entered into a sub-advisory agreement with Jennison Associates LLC (the
 Sub-Advisor).
    The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
 A shares are sold at their offering price, which is normally net asset value
 plus a front-end sales charge. Class B, Class C and Class N shares are sold
 without a front-end sales charge but may be subject to a contingent deferred
 sales charge (CDSC). Class N shares are sold only through retirement plans.
 Retirement plans that offer Class N shares may impose charges on those
 accounts. Class Y shares are sold to certain institutional investors without
 either a front-end sales charge or a CDSC. All classes of shares have identical
 rights and voting privileges. Earnings, net assets and net asset value per
 share may differ by minor amounts due to each class having its own expenses
 directly attributable to that class. Classes A, B, C and N have separate
 distribution and/or service plans. No such plan has been adopted for Class Y
 shares. Class B shares will automatically convert to Class A shares six years
 after the date of purchase.
    The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
 Securities Valuation. Securities listed or traded on National Stock Exchanges
 or other domestic or foreign exchanges are valued based on the last sale price
 of the security traded on that exchange prior to the time when the Fund's
 assets are valued. In the absence of a sale, the security is valued at the last
 sale price on the prior trading day, if it is within the spread of the closing
 bid and asked prices, and if not, at the closing bid price. Securities
 (including restricted securities) for which quotations are not readily
 available are valued primarily using dealer-supplied valuations, a portfolio
 pricing service authorized by the Board of Trustees, or at their fair value.
 Fair value is determined in good faith under consistently applied procedures
 under the supervision of the Board of Trustees. Short-term "money market type"
 debt securities with remaining maturities of sixty days or less are valued at
 amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
 Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
 Manager, may transfer uninvested cash balances into one or more joint
 repurchase agreement accounts. These balances are invested in one or more
 repurchase agreements, secured by U.S. government securities. Securities
 pledged as collateral for repurchase agreements are held by a custodian bank
 until the agreements mature. Each agreement requires that the market value of
 the collateral be sufficient to cover payments of interest and principal;
 however, in the event of default by the other party to the agreement, retention
 of the collateral may be subject to legal proceedings.

                           19 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



NOTES TO FINANCIAL STATEMENTS  CONTINUED

================================================================================
 1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
 Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
 those attributable to a specific class), gains and losses are allocated daily
 to each class of shares based upon the relative proportion of net assets
 represented by such class. Operating expenses directly attributable to a
 specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
 Federal Taxes. The Fund intends to continue to comply with provisions of the
 Internal Revenue Code applicable to regulated investment companies and to
 distribute all of its taxable income to shareholders. Therefore, no federal
 income or excise tax provision is required.
    During the fiscal year ended November 30, 2002, the Fund did not utilize any
 capital loss carryforward.

 As of November 30, 2002, the Fund had available for federal income tax purposes
 unused capital loss carryforwards as follows:

                              Expiring
                              ----------------------
                              2009        $  637,074
                                 2010 1,804,042
                                Total $2,441,116
                                          ==========
 As of November 30, 2002, the Fund had approximately $110,000 of post-October
 losses available to offset future capital gains, if any. Such losses, if
 unutilized, will expire in 2011.
- --------------------------------------------------------------------------------
 Dividends and Distributions to Shareholders. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
 Classification of Distributions to Shareholders. Net investment income (loss)
 and net realized gain (loss) may differ for financial statement and tax
 purposes. The character of dividends and distributions made during the fiscal
 year from net investment income or net realized gains may differ from their
 ultimate characterization for federal income tax purposes. Also, due to timing
 of dividends and distributions, the fiscal year in which amounts are
 distributed may differ from the fiscal year in which the income or net realized
 gain was recorded by the Fund.
    The Fund adjusts the classification of distributions to shareholders to
 reflect the differences between financial statement amounts and distributions
 determined in accordance with income tax regulations. Accordingly, during the
 year ended November 30, 2002, amounts have been reclassified to reflect a
 decrease in paid-in capital of $65,535. Accumulated net investment loss was
 decreased by the same amount. Net assets of the Fund were unaffected by the
 reclassifications.
    No distributions were paid during the year ended November 30, 2002 and the
 period ended November 30, 2001.

                           20 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND


 As of November 30, 2002, the components of distributable earnings on a tax
 basis were as follows:

                 Accumulated net realized loss   $(2,574,178)
                 Net unrealized depreciation        (222,430)
                                                 ------------
                 Total                           $(2,796,608)
                                                 ============

- --------------------------------------------------------------------------------
 Investment Income. Dividend income is recorded on the ex-dividend date or upon
 ex-dividend notification in the case of certain foreign dividends where the
 ex-dividend date may have passed. Non-cash dividends included in dividend
 income, if any, are recorded at the fair market value of the securities
 received. Interest income, which includes accretion of discount and
 amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
 Security Transactions. Security transactions are recorded on the trade date.
 Realized gains and losses on securities sold are determined on the basis of
 identified cost.
- --------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial statements and the reported amounts of income and
 expenses during the reporting period. Actual results could differ from those
 estimates.

                           21 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



NOTES TO FINANCIAL STATEMENTS  CONTINUED

================================================================================

2. Shares of Beneficial Interest The Fund has authorized an unlimited number of
no par value shares of beneficial interest of each class. Transactions in shares
of beneficial interest were as follows:

                  Year Ended November 30, 2002  Period Ended November 30, 2001 1
                          Shares        Amount            Shares         Amount
- --------------------------------------------------------------------------------
Class A
Sold                     215,428    $1,516,617           618,231     $6,011,437
Redeemed                 (59,923)     (437,851)           (7,999)       (67,740)
                         -------------------------------------------------------
Net increase             155,505    $1,078,766           610,232     $5,943,697
                         =======================================================
- --------------------------------------------------------------------------------
Class B
Sold                     178,140    $1,172,929            53,558     $  474,235
Redeemed                 (17,259)     (117,392)          (12,050)      (101,497)
                         -------------------------------------------------------
Net increase             160,881    $1,055,537            41,508     $  372,738
                         =======================================================
- --------------------------------------------------------------------------------
Class C
Sold                     261,409    $1,843,044           117,610     $  985,629
Redeemed                 (32,313)     (214,363)           (3,775)       (32,797)
                         -------------------------------------------------------
Net increase             229,096    $1,628,681           113,835     $  952,832
                         =======================================================
- --------------------------------------------------------------------------------
Class N
Sold                     193,853    $1,476,441            43,880     $  380,385
Redeemed                 (32,720)     (223,619)           (1,519)       (11,471)
                         -------------------------------------------------------
Net increase             161,133    $1,252,822            42,361     $  368,914
                         =======================================================
- --------------------------------------------------------------------------------
Class Y
Sold                          --    $       --                --     $       --
Redeemed                      --            --                --             --
                         -------------------------------------------------------
Net increase (decrease)       --    $       --                --     $       --
                         =======================================================

 1. For the period from February 16, 2001 (inception of offering) to November
 30, 2001, for Class A, B, C and Y shares and for the period from March 1, 2001
 (inception of offering) to November 30, 2001, for Class N shares.


================================================================================
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended November 30, 2002, were
$10,389,327 and $5,857,931, respectively.

As of November 30, 2002, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $10,024,841 was composed of:

                     Gross unrealized appreciation   $ 266,294
                     Gross unrealized depreciation    (511,792)
                                                     ----------
                     Net unrealized depreciation     $(245,498)
                                                     ==========

                           22 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



The difference between book-basis and tax-basis unrealized appreciation and
depreciation, if applicable, is attributable primarily to the tax deferral of
losses on wash sales, or return of capital dividends, and the realization for
tax purposes of unrealized gain (loss) on certain futures contracts, investments
in passive foreign investment companies, and forward foreign currency exchange
contracts.
================================================================================
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 0.95% of the first $300 million of average annual net assets of
the Fund and 0.90% of average annual net assets in excess of $300 million. The
Manager has voluntarily undertaken to assume certain Fund expenses. The Manager
reserves the right to amend or terminate that expense assumption at any time.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager has retained Jennison Associates LLC as the
Sub-Advisor to provide the day-to-day portfolio management of the Fund. For the
year ended November 30, 2002, the Manager paid $35,059 to the Sub-Advisor.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a $19.75 per account fee.
   Additionally, Class Y shares are subject to minimum fees of $5,000 for assets
of less than $10 million and $10,000 for assets of $10 million or more. The
Class Y shares are subject to the minimum fees in the event that the per account
fee does not equal or exceed the applicable minimum fees. OFS may voluntarily
waive the minimum fees.
   OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% for all classes. Effective November 1, 2002,
Class Y shares were changed from 0.25% to 0.35%. This undertaking may be amended
or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.



                  Aggregate        Class A    Concessions    Concessions    Concessions    Concessions
                  Front-End      Front-End     on Class A     on Class B     on Class C     on Class N
              Sales Charges  Sales Charges         Shares         Shares         Shares         Shares
                 on Class A    Retained by    Advanced by    Advanced by    Advanced by    Advanced by
 Year Ended          Shares    Distributor  Distributor 1  Distributor 1  Distributor 1  Distributor 1
- ------------------------------------------------------------------------------------------------------

 November 30, 2002  $34,373        $10,966         $1,016        $38,831        $15,462        $12,938


1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.

                           23 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



 NOTES TO FINANCIAL STATEMENTS CONTINUED

4. Fees and Other Transactions with Affiliates CONTINUED

                           Class A       Class B         Class C        Class N
                        Contingent     Contingent     Contingent     Contingent
                          Deferred       Deferred       Deferred       Deferred
                     Sales Charges  Sales Charges  Sales Charges  Sales Charges
                       Retained by    Retained by    Retained by    Retained by
 Year Ended            Distributor    Distributor    Distributor    Distributor
- -------------------------------------------------------------------------------
 November 30, 2002             $--         $3,447           $546           $530

- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended November 30, 2002, payments under
the Class A Plan totaled $2,332, all of which were paid by the Distributor to
recipients, and included $349 paid to an affiliate of the Manager. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per year
under each plan.
Distribution fees paid to the Distributor for the year ended November 30, 2002,
were as follows:

                                                                   Distributor's
                                               Distributor's         Aggregate
                                                   Aggregate      Unreimbursed
                           Unreimbursed Expenses as %
              Total Payments  Amount Retained       Expenses     of Net Assets
                  Under Plan   by Distributor     Under Plan          of Class
- ------------------------------------------------------------------------------
Class B Plan         $ 6,176          $ 5,596       $ 64,956              5.01%
Class C Plan          15,244           12,258        315,521             14.38
Class N Plan           5,143            4,763        111,848              8.52

================================================================================
5. Option Activity
The Fund may buy and sell put and call options, or write put and covered call
options on portfolio securities in order to produce incremental earnings or
protect against changes in the value of portfolio securities.
   The Fund generally purchases put options or writes covered call options to
hedge against adverse movements in the value of portfolio holdings. When an
option is written, the Fund receives a premium and becomes obligated to sell or
purchase the underlying security at a fixed price, upon exercise of the option.

                           24 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



   Options are valued daily based upon the last sale price on the principal
exchange on which the option is traded and unrealized appreciation or
depreciation is recorded. The Fund will realize a gain or loss upon the
expiration or closing of the option transaction. When an option is exercised,
the proceeds on sales for a written call option, the purchase cost for a written
put option, or the cost of the security for a purchased put or call option is
adjusted by the amount of premium received or paid.
   Securities designated to cover outstanding call options are noted in the
Statement of Investments where applicable. Shares subject to call, expiration
date, exercise price, premium received and market value are detailed in a note
to the Statement of Investments. Options written are reported as a liability in
the Statement of Assets and Liabilities. Realized gains and losses are reported
in the Statement of Operations.
   The risk in writing a call option is that the Fund gives up the opportunity
for profit if the market price of the security increases and the option is
exercised. The risk in writing a put option is that the Fund may incur a loss if
the market price of the security decreases and the option is exercised. The risk
in buying an option is that the Fund pays a premium whether or not the option is
exercised. The Fund also has the additional risk of not being able to enter into
a closing transaction if a liquid secondary market does not exist.

Written option activity for the year ended November 30, 2002 was as follows:

                                        Call Options
                             ------------------------
                               Number of Amount of
                               Contracts Premiums
- -----------------------------------------------------
 Options outstanding as of
 November 30, 2001                  --       $    --
 Options written                    18         2,919
 Options closed or expired         (18)       (2,919)
                             ------------------------
 Options outstanding as of
 November 30, 2002                  --         $  --
                             ========================


================================================================================
 6. Borrowing and Lending Arrangements
 Bank Borrowings. Until November 12, 2002, the Fund had the ability to borrow
 from a bank for temporary or emergency purposes provided asset coverage for
 borrowings exceeded 300%. The Fund and other Oppenheimer funds participated in
 a $400 million unsecured line of credit with a bank. Under that unsecured line
 of credit, interest was charged to each fund, based on its borrowings, at a
 rate equal to the Federal Funds Rate plus 0.45%. Under that credit facility,
 the Fund paid a commitment fee equal to its pro rata share of the average
 unutilized amount of the credit facility at a rate of 0.08% per annum.

                           25 | oppenheimer select managers Jennison Growth Fund




NOTES TO FINANCIAL STATEMENTS  Continued

================================================================================
 6. Borrowing and Lending Arrangements Continued
 Interfund Borrowing and Lending Arrangements. Effective November 12, 2002, the
 following interfund borrowing and lending arrangements went into effect.
 Consistent with its fundamental policies and pursuant to an exemptive order
 issued by the Securities and Exchange Commission ("SEC"), the Fund may engage
 in borrowing and lending activities with other funds in the OppenheimerFunds
 complex. Borrowing money from affiliated funds may afford the Fund the
 flexibility to use the most cost-effective alternative to satisfy its borrowing
 requirements. Lending money to an affiliated fund may allow the Fund to obtain
 a higher rate of return than it could from interest rates on alternative
 short-term investments. Implementation of interfund lending will be
 accomplished consistent with applicable regulatory requirements, including the
 provisions of the SEC order. There is a risk that a borrowing fund could have a
 loan called on one day's notice. In that circumstance, the Fund might have to
 borrow from a bank at a higher interest cost if money to lend were not
 available from another Oppenheimer fund. When the Fund lends assets to another
 affiliated fund, the Fund is subject to the risk that the borrowing fund fails
 to repay the loan.
    The Fund had no borrowing or lending arrangements outstanding during the
year ended or at November 30, 2002.

                           26 | OPPENHEIMER SELECT MANAGERS JENNISON GROWTH FUND



INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of Oppenheimer Select Managers Salomon
Brothers All Cap Fund:

We have audited the accompanying statement of assets and liabilities of
Oppenheimer Select Managers Salomon Brothers All Cap Fund, which is a series of
Oppenheimer Select Managers, which operated under the name of Oppenheimer Select
Managers Salomon Brothers Capital Fund through April 30, 2002, including the
statement of investments, as of November 30, 2002, and the related statement of
operations for the year then ended, the statements of changes in net assets and
the financial highlights for the periods indicated. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
    We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 2002, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
    In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Oppenheimer Select Managers Salomon Brothers All Cap Fund as of November 30,
2002, the results of its operations for the year then ended, the changes in its
net assets and the financial highlights for the periods indicated, in conformity
with accounting principles generally accepted in the United States of America.



 /s/ Deloitte & Touche LLP
 -------------------------
 Deloitte & Touche LLP

 Denver, Colorado
 December 20, 2002


STATEMENT OF INVESTMENTS  November 30, 2002
                                                                   Market Value
                                                       Shares        See Note 1
- --------------------------------------------------------------------------------
Common Stocks--89.3%
- --------------------------------------------------------------------------------
Consumer Discretionary--21.8%
- --------------------------------------------------------------------------------
Hotels, Restaurants & Leisure--1.9%
Extended Stay America, Inc. 1                           8,500       $   118,915
- --------------------------------------------------------------------------------
McDonald's Corp.                                       17,100           316,350
                                                                    ------------
                                                                         435,265

- --------------------------------------------------------------------------------
Household Durables--0.7%
Clayton Homes, Inc.                                     6,000            80,880
- --------------------------------------------------------------------------------
Fleetwood Enterprises, Inc. 1                          11,300            93,112
                                                                    ------------
                                                                         173,992

- --------------------------------------------------------------------------------
Leisure Equipment & Products--2.1%
Eastman Kodak Co.                                       7,500           276,900
- --------------------------------------------------------------------------------
Hasbro, Inc.                                           17,500           224,350
                                                                    ------------
                                                                         501,250

- --------------------------------------------------------------------------------
Media--12.7%
AOL Time Warner, Inc. 1                                30,000           491,100
- --------------------------------------------------------------------------------
Cablevision Systems New York Group, Cl. A 1            17,107           289,279
- --------------------------------------------------------------------------------
Comcast Corp., Cl. A Special, Non-Vtg. 1               16,500           376,200
- --------------------------------------------------------------------------------
Disney (Walt) Co.                                      18,500           366,670
- --------------------------------------------------------------------------------
Liberty Media Corp., Cl. A 1                           51,000           538,560
- --------------------------------------------------------------------------------
Metro-Goldwyn-Mayer, Inc. 1                            20,000           285,000
- --------------------------------------------------------------------------------
News Corp. Ltd. (The), Sponsored ADR                    9,700           272,570
- --------------------------------------------------------------------------------
News Corp. Ltd. (The), Sponsored ADR, Preference       15,700           373,817
                                                                    ------------
                                                                       2,993,196

- --------------------------------------------------------------------------------
Multiline Retail--3.5%
Costco Wholesale Corp. 1                               15,900           513,570
- --------------------------------------------------------------------------------
Federated Department Stores, Inc. 1                     9,800           320,264
                                                                    ------------
                                                                         833,834

- --------------------------------------------------------------------------------
Specialty Retail--0.9%
Home Depot, Inc.                                        8,300           219,286
- --------------------------------------------------------------------------------
Consumer Staples--0.5%
- --------------------------------------------------------------------------------
Food Products--0.5%
Archer-Daniels-Midland Co.                              9,700           129,301
- --------------------------------------------------------------------------------
Energy--4.8%
- --------------------------------------------------------------------------------
Energy Equipment & Services--1.6%
GlobalSantaFe Corp.                                     7,700           197,274
- --------------------------------------------------------------------------------
Schlumberger Ltd.                                       4,100           181,425
                                                                    ------------
                                                                         378,699


        9 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

STATEMENT OF INVESTMENTS  CONTINUED
                                                                   Market Value
                                                       Shares        See Note 1
- --------------------------------------------------------------------------------
Oil & Gas--3.2%
Amerada Hess Corp.                                      1,600       $    89,600
- --------------------------------------------------------------------------------
Anadarko Petroleum Corp.                                5,500           259,600
- --------------------------------------------------------------------------------
ChevronTexaco Corp.                                     6,000           402,180
                                                                    ------------
                                                                         751,380

- --------------------------------------------------------------------------------
Financials--12.9%
- --------------------------------------------------------------------------------
Banks--1.0%
Bank One Corp.                                          5,900           232,991
- --------------------------------------------------------------------------------
Diversified Financials--3.4%
American Express Co.                                   10,600           412,658
- --------------------------------------------------------------------------------
Countrywide Financial Corp.                             8,200           404,260
                                                                    ------------
                                                                         816,918

- --------------------------------------------------------------------------------
Insurance--8.5%
AMBAC Financial Group, Inc.                             5,000           312,550
- --------------------------------------------------------------------------------
Chubb Corp.                                             6,000           351,600
- --------------------------------------------------------------------------------
Hartford Financial Services Group, Inc.                 5,000           245,300
- --------------------------------------------------------------------------------
MBIA, Inc.                                              5,100           231,948
- --------------------------------------------------------------------------------
MGIC Investment Corp.                                   5,000           233,350
- --------------------------------------------------------------------------------
Radian Group, Inc.                                      4,100           167,690
- --------------------------------------------------------------------------------
St. Paul Cos., Inc.                                    12,500           465,500
                                                                    ------------
                                                                       2,007,938

- --------------------------------------------------------------------------------
Health Care--13.3%
- --------------------------------------------------------------------------------
Biotechnology--1.7%
Aphton Corp. 1                                          8,600            23,048
- --------------------------------------------------------------------------------
Enzo Biochem, Inc.                                     11,500           166,750
- --------------------------------------------------------------------------------
Wyeth                                                   5,500           211,365
                                                                    ------------
                                                                         401,163

- --------------------------------------------------------------------------------
Pharmaceuticals--11.6%
Abbott Laboratories                                    11,000           481,580
- --------------------------------------------------------------------------------
Bristol-Myers Squibb Co.                               15,300           405,450
- --------------------------------------------------------------------------------
Elan Corp. plc, ADR 1                                  55,000           134,200
- --------------------------------------------------------------------------------
ICN Pharmaceuticals, Inc.                               8,300            97,525
- --------------------------------------------------------------------------------
Johnson & Johnson                                       5,400           307,908
- --------------------------------------------------------------------------------
Merck & Co., Inc.                                       3,900           231,699
- --------------------------------------------------------------------------------
Novartis AG, ADR                                       12,700           482,600
- --------------------------------------------------------------------------------
Pfizer, Inc.                                            8,300           261,782
- --------------------------------------------------------------------------------
Schering-Plough Corp.                                  15,700           355,762
                                                                    ------------
                                                                       2,758,506


        10 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

                                                                   Market Value
                                                       Shares        See Note 1
- --------------------------------------------------------------------------------
Industrials--4.8%
- --------------------------------------------------------------------------------
Aerospace & Defense--1.8%
Honeywell International, Inc.                           7,700       $   199,199
- --------------------------------------------------------------------------------
Raytheon Co.                                            7,700           224,609
                                                                    ------------
                                                                         423,808

- --------------------------------------------------------------------------------
Commercial Services & Supplies--1.8%
Waste Management, Inc.                                 17,100           426,132
- --------------------------------------------------------------------------------
Machinery--1.2%
Deere & Co.                                             2,800           143,220
- --------------------------------------------------------------------------------
Ingersoll-Rand Co., Cl. A                               3,100           143,220
                                                                    ------------
                                                                         286,440

- --------------------------------------------------------------------------------
Information Technology--20.0%
- --------------------------------------------------------------------------------
Communications Equipment--7.0%
3Com Corp. 1                                           84,000           432,600
- --------------------------------------------------------------------------------
Lucent Technologies, Inc. 1                           131,300           229,775
- --------------------------------------------------------------------------------
Motorola, Inc.                                         29,700           337,986
- --------------------------------------------------------------------------------
Nokia Corp., Sponsored ADR, A Shares                   20,900           401,489
- --------------------------------------------------------------------------------
Telefonaktiebolaget Ericsson (L.M.), Sponsored ADR 1   26,760           263,051
                                                                    ------------
                                                                       1,664,901

- --------------------------------------------------------------------------------
Computers & Peripherals--2.9%
Electronics for Imaging, Inc. 1                         8,000           141,520
- --------------------------------------------------------------------------------
Hewlett-Packard Co.                                    16,300           317,524
- --------------------------------------------------------------------------------
Maxtor Corp. 1                                         40,000           216,800
                                                                    ------------
                                                                         675,844

- --------------------------------------------------------------------------------
Electronic Equipment & Instruments--2.8%
Agilent Technologies, Inc. 1                           13,800           267,858
- --------------------------------------------------------------------------------
Solectron Corp. 1                                      85,000           392,700
                                                                    ------------
                                                                         660,558

- --------------------------------------------------------------------------------
Internet Software & Services--0.8%
RealNetworks, Inc. 1                                   40,000           154,400
- --------------------------------------------------------------------------------
Register.com, Inc. 1                                   10,900            46,652
                                                                    ------------
                                                                         201,052

- --------------------------------------------------------------------------------
IT Consulting & Services--1.7%
Unisys Corp. 1                                         35,000           392,000
- --------------------------------------------------------------------------------
Semiconductor Equipment & Products--4.3%
Intel Corp.                                            14,000           292,320
- --------------------------------------------------------------------------------
Lattice Semiconductor Corp. 1                          22,000           220,000
- --------------------------------------------------------------------------------
LSI Logic Corp. 1                                      33,500           277,715


        11 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

STATEMENT OF INVESTMENTS  Continued
                                                                   Market Value
                                                       Shares        See Note 1
- --------------------------------------------------------------------------------
Semiconductor Equipment & Products Continued
Taiwan Semiconductor Manufacturing Co. Ltd., ADR       25,400       $   233,680
                                                                    ------------
                                                                       1,023,715

- --------------------------------------------------------------------------------
Software--0.5%
Micromuse, Inc. 1                                      26,000           116,740
- --------------------------------------------------------------------------------
Materials--5.6%
- --------------------------------------------------------------------------------
Chemicals--2.2%
Cabot Corp.                                             6,500           164,645
- --------------------------------------------------------------------------------
Dow Chemical Co.                                        7,600           242,440
- --------------------------------------------------------------------------------
Engelhard Corp.                                         4,700           113,928
                                                                    ------------
                                                                         521,013

- --------------------------------------------------------------------------------
Metals & Mining--1.8%
Alcoa, Inc.                                            15,000           383,250
- --------------------------------------------------------------------------------
Brush Wellman, Inc. 1                                   5,300            32,065
                                                                    ------------
                                                                         415,315

- --------------------------------------------------------------------------------
Paper & Forest Products--1.6%
Weyerhaeuser Co.                                        7,300           383,980
- --------------------------------------------------------------------------------
Telecommunication Services--4.7%
- --------------------------------------------------------------------------------
Diversified Telecommunication Services--3.0%
Nippon Telegraph & Telephone Corp., ADR                13,000           254,150
- --------------------------------------------------------------------------------
SBC Communications, Inc.                               16,000           456,000
                                                                    ------------
                                                                         710,150

- --------------------------------------------------------------------------------
Wireless Telecommunication Services--1.7%
Vodafone Group plc, Sponsored ADR                      20,900           391,875
- --------------------------------------------------------------------------------
Utilities--0.9%
- --------------------------------------------------------------------------------
Gas Utilities--0.9%
El Paso Corp.                                          25,000           213,000
                                                                    ------------
Total Common Stocks (Cost $23,046,816)                               21,140,242



        12 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

                                                    Principal      Market Value
                                                       Amount        See Note 1
- --------------------------------------------------------------------------------
Convertible Corporate Bonds and Notes--1.6%
American Tower Corp., 2.25% Cv. Nts.,
10/15/09 (Cost $355,783)                           $  500,000       $   372,500

- --------------------------------------------------------------------------------
Joint Repurchase Agreements--8.8%
Undivided interest of 0.46% in joint repurchase
agreement (Market Value $453,323,000) with Banc
One Capital Markets, Inc., 1.29%, dated 11/29/02,
to be repurchased at $2,080,224 on 12/2/02,
collateralized by U.S. Treasury Nts., 1.875%--7%,
3/31/03--8/15/11, witH a value of $408,234,710
and U.S. Treasury Bonds, 6.25%--10.625%,
8/15/15--8/15/23, with a value of $55,304,803
(Cost $2,080,000)                                   2,080,000         2,080,000
- --------------------------------------------------------------------------------
Total Investments, at Value (Cost $25,482,599)           99.7%       23,592,742
- --------------------------------------------------------------------------------
Other Assets Net of Liabilities                           0.3            77,725
                                                   -----------------------------
Net Assets                                              100.0%      $23,670,467
                                                   =============================




Footnotes to Statement of Investments

1. Non-income producing security.

See accompanying Notes to Financial Statements.

        13 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND


STATEMENT OF ASSETS AND LIABILITIES     November 30, 2002
- ---------------------------------------------------------------------
Assets Investments, at value (cost $25,482,599)--
see accompanying statement                              $ 23,592,742
- ---------------------------------------------------------------------
Cash                                                           7,016
- ---------------------------------------------------------------------
Receivables and other assets:
Investments sold                                              59,061
Interest and dividends                                        32,420
Shares of beneficial interest sold                            20,326
Other                                                          1,912
                                                        -------------
Total assets                                              23,713,477

- ---------------------------------------------------------------------
Liabilities Payables and other liabilities:
Shareholder reports                                           10,170
Transfer and shareholder servicing agent fees                  9,147
Legal, auditing and other professional fees                    7,746
Distribution and service plan fees                             6,312
Investments purchased                                          4,806
Shares of beneficial interest redeemed                         2,046
Trustees' compensation                                           326
Other                                                          2,457
                                                        -------------
Total liabilities                                             43,010

- ---------------------------------------------------------------------
Net Assets                                              $ 23,670,467
                                                        =============

- ---------------------------------------------------------------------
Composition of Net Assets
Paid-in capital                                         $ 28,029,517
- ---------------------------------------------------------------------
Accumulated net realized loss on investments and
foreign currency transactions                             (2,469,193)
- ---------------------------------------------------------------------
Net unrealized depreciation on investments and
translation of asset and liabilities denominated
in foreign currencies                                     (1,889,857)
                                                        -------------
Net Assets                                              $ 23,670,467
                                                        =============


        14 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND


- ----------------------------------------------------------------------
Net Asset Value Per Share
Class A Shares:
Net asset value and redemption price per share
(based on net assets of $6,774,546 and 841,303
shares of beneficial interest outstanding)                      $8.05
Maximum offering price per share (net asset value
plus sales charge of 5.75% of offering price)                   $8.54
- ----------------------------------------------------------------------
Class B Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $4,325,199 and
543,668 shares of beneficial
interest outstanding)                                           $7.96
- ----------------------------------------------------------------------
Class C Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $6,872,361 and
864,608 shares of beneficial
interest outstanding)                                           $7.95
- ----------------------------------------------------------------------
Class N Shares:
Net asset value, redemption price (excludes applicable contingent deferred sales
charge) and offering price per share (based on net assets of $5,697,551 and
712,389 shares of beneficial
interest outstanding)                                           $8.00
- ----------------------------------------------------------------------
Class Y Shares:
Net asset value, redemption price and offering price per share (based on net
assets of $810 and 100 shares of beneficial interest outstanding)
                                                                           $8.10

See accompanying Notes to Financial Statements.

        15 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND



STATEMENT OF OPERATIONS For the Year Ended November 30, 2002
- --------------------------------------------------------------------------------
Investment Income
Dividends (net of foreign withholding taxes of $2,919)               $ 192,958
- --------------------------------------------------------------------------------
Interest                                                                60,190
                                                                   -------------
Total investment income                                                253,148

- --------------------------------------------------------------------------------
Expenses
Management fees                                                        238,043
- --------------------------------------------------------------------------------
Distribution and service plan fees:
Class A                                                                 12,376
Class B                                                                 34,095
Class C                                                                 57,794
Class N                                                                 15,207
- --------------------------------------------------------------------------------
Transfer and shareholder servicing agent fees:
Class A                                                                 40,614
Class B                                                                 15,879
Class C                                                                 24,684
Class N                                                                 13,454
Class Y                                                                    863
- --------------------------------------------------------------------------------
Shareholder reports                                                     22,805
- --------------------------------------------------------------------------------
Trustees' compensation                                                   4,126
- --------------------------------------------------------------------------------
Custodian fees and expenses                                                236
- --------------------------------------------------------------------------------
Other                                                                   14,996
                                                                   -------------
Total expenses                                                         495,172
Less voluntary reimbursement of expenses                               (44,330)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Classes A, B, C and N                                      (16,433)
Less voluntary waiver of transfer and shareholder servicing
agent fees--Class Y                                                       (863)
                                                                   -------------
Net expenses                                                           433,546
- --------------------------------------------------------------------------------
Net Investment Loss                                                   (180,398)

- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investments                                                         (2,085,922)
Foreign currency transactions                                              729
                                                                   -------------
Net realized loss                                                   (2,085,193)
- --------------------------------------------------------------------------------
Net change in unrealized depreciation on:
Investments                                                         (1,552,018)
Translation of assets and liabilities denominated in
foreign currencies                                                        (253)
Net change                                                          (1,552,271)
                                                                   -------------
Net realized and unrealized loss                                    (3,637,464)

- --------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operations               $(3,817,862)
                                                                   =============

See accompanying Notes to Financial Statements.

        16 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND


STATEMENTS OF CHANGES IN NET ASSETS

Year Ended November 30,                                     2002        2001 1
- --------------------------------------------------------------------------------
Operations
Net investment income (loss)                         $  (180,398)  $   103,450
- --------------------------------------------------------------------------------
Net realized loss                                     (2,085,193)     (384,050)
- --------------------------------------------------------------------------------
Net change in unrealized depreciation                 (1,552,271)     (337,586)
                                                     ---------------------------
Net decrease in net assets resulting from operations  (3,817,862)     (618,186)

- --------------------------------------------------------------------------------
Dividends and/or Distributions to Shareholders Dividends from net investment
income:
Class A                                                  (82,700)           --
Class B                                                  (14,442)           --
Class C                                                  (28,229)           --
Class N                                                   (8,740)           --
Class Y                                                      (11)           --

- --------------------------------------------------------------------------------
Beneficial Interest Transactions Net increase in net assets resulting from
beneficial interest transactions:
Class A                                                  143,096     9,139,908
Class B                                                2,802,559     2,154,215
Class C                                                4,079,221     3,823,011
Class N                                                5,419,588       662,039
Class Y                                                       --            --

- --------------------------------------------------------------------------------
Net Assets
Total increase                                         8,492,480    15,160,987
- --------------------------------------------------------------------------------
Beginning of period                                   15,177,987        17,000 2
                                                     ---------------------------
End of period [including accumulated net investment
income of $105,757 for the period ended November 30,
2001]                                                $23,670,467   $15,177,987
                                                     ===========================

1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Reflects the value of the Manager's initial seed money investment at
December 22, 2000.

See accompanying Notes to Financial Statements.


        17 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND



FINANCIAL HIGHLIGHTS



                                                         Class A           Class B           Class C
                                                            Year              Year              Year
                                                           Ended             Ended             Ended
                                                        Nov. 30,          Nov. 30,          Nov. 30,
                                                  2002    2001 1    2002    2001 1    2002    2001 1
- -----------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period           $  9.25   $10.00   $ 9.18   $10.00  $  9.18   $10.00
- -----------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss)                     (.06)      .08     (.07)     .04     (.07)     .03
Net realized and unrealized loss                (1.05)     (.83)   (1.09)    (.86)   (1.09)    (.85)
                                               ------------------------------------------------------
Total from investment operations                (1.11)     (.75)   (1.16)    (.82)   (1.16)    (.82)
- -----------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income             (.09)       --     (.06)      --     (.07)      --
- -----------------------------------------------------------------------------------------------------
Net asset value, end of period                  $8.05     $9.25    $7.96    $9.18    $7.95    $9.18
                                               ======================================================

- -----------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 2             (12.17)%   (7.50)% (12.75)%  (8.20)% (12.78)%  (8.20)%

- -----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)       $6,775    $8,717   $4,325   $2,071   $6,872   $3,729
- -----------------------------------------------------------------------------------------------------
Average net assets (in thousands)              $9,404    $6,384   $3,416   $1,075   $5,788   $1,427
- -----------------------------------------------------------------------------------------------------
Ratios to average net assets: 3
Net investment income (loss)                    (0.52)%    1.57%   (1.21)%   1.06%   (1.21)%   1.17%
Expenses                                         1.85%     1.59%    2.75%    2.54%    2.72%    2.55%
Expenses, net of voluntary reimbursement
of expenses and/or voluntary waiver of
transfer agent fees                              1.59%     1.59%    2.44%    2.39%    2.41%    2.38%
- -----------------------------------------------------------------------------------------------------
Portfolio turnover rate                           139%       55%     139%      55%     139%      55%


1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.

        18 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND



                                                                       Class N            Class Y
                                                                          Year               Year
                                                                         Ended              Ended
                                                                      Nov. 30,           Nov. 30,
                                                                2002    2001 1     2002    2001 2
- ---------------------------------------------------------------------------------------------------

Per Share Operating Data
Net asset value, beginning of period                          $ 9.21    $ 9.84   $ 9.26    $10.00
- ---------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income                                            .02       .03      .01       .12
Net realized and unrealized loss                               (1.14)     (.66)   (1.06)     (.86)
                                                              -------------------------------------
Total from investment operations                               (1.12)     (.63)   (1.05)     (.74)
- ---------------------------------------------------------------------------------------------------
Dividends and/or distributions to shareholders:
Dividends from net investment income                            (.09)       --     (.11)       --
- ---------------------------------------------------------------------------------------------------
Net asset value, end of period                                 $8.00     $9.21    $8.10    $ 9.26
                                                              =====================================

- ---------------------------------------------------------------------------------------------------
Total Return, at Net Asset Value 3                            (12.30)%   (6.40)% (11.52)%   (7.40)%

- ---------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Net assets, end of period (in thousands)                      $5,698      $660       $1        $1
- ---------------------------------------------------------------------------------------------------
Average net assets (in thousands)                             $3,055      $158       $1        $1
- ---------------------------------------------------------------------------------------------------
Ratios to average net assets: 4
Net investment income (loss)                                   (0.66)%    2.08%    0.10%     1.52%
Expenses                                                        2.23%     2.07%   87.59%   501.53%
Expenses, net of voluntary reimbursement of expenses
and/or voluntary waiver of transfer agent fees                  1.98%     1.89%    1.12%     1.30%
- ---------------------------------------------------------------------------------------------------
Portfolio turnover rate                                          139%       55%     139%       55%


1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year. See accompanying Notes to
Financial Statements.


        19 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Select Managers Salomon Brothers All Cap Fund (the Fund), a series
of Oppenheimer Select Managers, which operated under the name of Oppenheimer
Select Managers Salomon Brothers Capital Fund through April 30, 2002, is a
non-diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended. The Fund's investment objective is
to seek capital appreciation. The Fund's investment advisor is OppenheimerFunds,
Inc. (the Manager). The Manager has entered into a sub-advisory agreement with
Salomon Brothers Asset Management, Inc. (the Sub-Advisor).
    The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
A shares are sold at their offering price, which is normally net asset value
plus a front-end sales charge. Class B, Class C and Class N shares are sold
without a front-end sales charge but may be subject to a contingent deferred
sales charge (CDSC). Class N shares are sold only through retirement plans.
Retirement plans that offer Class N shares may impose charges on those accounts.
Class Y shares are sold to certain institutional investors without either a
front-end sales charge or a CDSC. All classes of shares have identical rights
and voting privileges. Earnings, net assets and net asset value per share may
differ by minor amounts due to each class having its own expenses directly
attributable to that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares six years after the date of
purchase.
    The following is a summary of significant accounting policies consistently
followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Foreign Currency Translation. The accounting records of the Fund are maintained
in U.S. dollars. Prices of securities denominated in foreign currencies are
translated into U.S. dollars at the prevailing exchange rates on the valuation
date. Amounts related to the purchase and sale of foreign securities and
investment income are translated at the prevailing exchange rates on the
respective dates of such transactions.

    The effect of changes in foreign currency exchange rates on investments is
separately identified from the fluctuations arising from changes in market
values of securities held

        20 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND



and reported with all other foreign currency gains and losses in the Fund's
Statement of Operations.
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint repurchase
agreement accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal; however,
in the event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
    During the fiscal year ended November 30, 2002, the Fund did not utilize any
capital loss carryforward.

As of November 30, 2002, the Fund had available for federal income tax purposes
unused capital loss carryforwards as follows:
                           Expiring
                           --------------------
                           2009      $  167,424
                                 2010 2,019,897
                                Total $2,187,321
                                     ==========

As of November 30, 2002, the Fund had approximately $282,000 of post-October
losses available to offset future capital gains, if any. Such losses, if
unutilized, will expire in 2011.
- --------------------------------------------------------------------------------
Dividends and Distributions to Shareholders. Dividends and distributions to
shareholders, which are determined in accordance with income tax regulations,
are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
Classification of Distributions to Shareholders. Net investment income (loss)
and net realized gain (loss) may differ for financial statement and tax purposes
primarily because of the recognition of certain foreign currency gains (losses)
as ordinary income (loss) for tax purposes. The character of dividends and
distributions made during the fiscal year from net investment income or net
realized gains may differ from their ultimate characterization for federal
income tax purposes. Also, due to timing of

        21 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
1. Significant Accounting Policies Continued
dividends and distributions, the fiscal year in which amounts are distributed
may differ from the fiscal year in which the income or net realized gain was
recorded by the Fund.
    The Fund adjusts the classification of distributions to shareholders to
reflect the differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, during the
year ended November 30, 2002, amounts have been reclassified to reflect a
decrease in paid-in capital of $208,799, a decrease in overdistributed net
investment income of $208,763, and a decrease in accumulated net realized loss
on investments of $36. Net assets of the Fund were unaffected by the
reclassifications.

The tax character of distributions paid during the year ended November 30, 2002
and the period ended November 30, 2001 was as follows:
                                               Year Ended       Period Ended
                                        November 30, 2002  November 30, 2001

                  Distributions paid from:
                  Ordinary income                $134,122                $--
                  Long-term capital gain               --                 --
                  Return of capital                    --                 --
                                                 ---------------------------
                  Total                          $134,122                $--
                                                 ===========================
As of November 30, 2002, the components of distributable earnings on a tax basis
were as follows:

        Accumulated net realized loss         $(2,469,193)
        Net unrealized depreciation            (1,889,857)
                                              ------------
        Total                                 $(4,359,050)
                                              ============

- --------------------------------------------------------------------------------
Investment Income. Dividend income is recorded on the ex-dividend date or upon
ex-dividend notification in the case of certain foreign dividends where the
ex-dividend date may have passed. Non-cash dividends included in dividend
income, if any, are recorded at the fair market value of the securities
received. Interest income, which includes accretion of discount and amortization
of premium, is accrued as earned.
- --------------------------------------------------------------------------------
Security Transactions. Security transactions are recorded on the trade date.
Realized gains and losses on securities sold are determined on the basis of
identified cost.
- --------------------------------------------------------------------------------
Other. The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of income and
expenses during the reporting period. Actual results could differ from those
estimates.


        22 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAPFUND


- --------------------------------------------------------------------------------
2. Shares of Beneficial Interest
The Fund has authorized an unlimited number of no par value shares of beneficial
interest of each class. Transactions in shares of beneficial interest were as
follows:


                                           Year Ended November 30, 2002  Period Ended November 30, 2001 1
                                               Shares            Amount           Shares           Amount
- -----------------------------------------------------------------------------------------------------------

Class A
Sold                                          629,798       $ 5,376,405          957,273       $9,291,205
Dividends and/or
distributions reinvested                        4,288            39,537               --               --
Redeemed                                     (735,506)       (5,272,846)         (15,950)        (151,297)
                                             --------------------------------------------------------------
Net increase (decrease)                      (101,420)       $  143,096          941,323       $9,139,908
                                             ==============================================================

- -----------------------------------------------------------------------------------------------------------
Class B
Sold                                          412,196       $ 3,515,598          241,090       $2,298,825
Dividends and/or
distributions reinvested                        1,486            13,648               --               --
Redeemed                                      (95,522)         (726,687)         (15,682)        (144,610)
                                             --------------------------------------------------------------
Net increase                                  318,160        $2,802,559          225,408       $2,154,215
                                             ==============================================================

- -----------------------------------------------------------------------------------------------------------
Class C
Sold                                          680,933       $ 5,766,521          408,168       $3,842,581
Dividends and/or  distributions reinvested      2,928            26,858               --               --
Redeemed                                     (225,394)       (1,714,158)          (2,127)         (19,570)
                                             --------------------------------------------------------------
Net increase                                  458,467        $4,079,221          406,041       $3,823,011
                                             ==============================================================

- -----------------------------------------------------------------------------------------------------------
Class N
Sold                                          781,100       $ 6,523,549           72,245       $  667,732
Dividends and/or  distributions reinvested        951             8,731               --               --
Redeemed                                     (141,274)       (1,112,692)            (633)          (5,693)
                                             --------------------------------------------------------------
Net increase                                  640,777        $5,419,588           71,612       $  662,039
                                             ==============================================================

- -----------------------------------------------------------------------------------------------------------
Class Y
Sold                                               --       $        --               --       $       --
Dividends and/or
 distributions reinvested                          --                --               --               --
Redeemed                                           --                --               --               --
                                             --------------------------------------------------------------
Net increase (decrease)                            --       $        --               --       $       --
                                             ==============================================================



1. For the period from February 16, 2001 (inception of offering) to November 30,
2001, for Class A, B, C and Y shares and for the period from March 1, 2001
(inception of offering) to November 30, 2001, for Class N shares.
- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities
The aggregate cost of purchases and proceeds from sales of securities, other
than short-term obligations, for the year ended November 30, 2002, were
$36,483,792 and $24,209,558, respectively.


        23 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
3. Purchases and Sales of Securities Continued

As of November 30, 2002, unrealized appreciation (depreciation) based on cost of
securities for federal income tax purposes of $25,482,599 was composed of:

         Gross unrealized appreciation          $ 1,405,691
         Gross unrealized depreciation           (3,295,548)
                                                ------------
         Net unrealized depreciation            $(1,889,857)
                                                ============

The difference between book-basis and tax-basis unrealized appreciation and
depreciation, if applicable, is attributable primarily to the tax deferral of
losses on wash sales, or return of capital dividends, and the realization for
tax purposes of unrealized gain (loss) on certain futures contracts, investments
in passive foreign investment companies, and forward foreign currency exchange
contracts.
- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee of 1.10% of
the first $100 million of average annual net assets of the Fund and 1.00% of
average annual net assets in excess of $100 million. The Manager has voluntarily
undertaken to assume certain Fund expenses. The Manager reserves the right to
amend or terminate that expense assumption at any time.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager has retained Salomon Brothers Asset Management,
Inc. as the Sub-Advisor to provide the day-to-day portfolio management of the
Fund. For the year ended November 30, 2002, the Manager paid $125,900 to the
Sub-Advisor.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of
the Manager, acts as the transfer and shareholder servicing agent for the Fund.
The Fund pays OFS a $19.75 per account fee.
    Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
    OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% for all classes. Effective November 1, 2002,
Class Y shares were changed from 0.25% to 0.35%. This undertaking may be amended
or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.

        24 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND


The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.



                        Aggregate        Class A     Concessions      Concessions    Concessions        Concessions
                        Front-End      Front-End      on Class A       on Class B     on Class C         on Class N
                    Sales Charges  Sales Charges          Shares           Shares         Shares             Shares
                       on Class A    Retained by     Advanced by      Advanced by    Advanced by        Advanced by
Year Ended                 Shares    Distributor   Distributor 1    Distributor 1  Distributor 1      Distributor 1
- -------------------------------------------------------------------------------------------------------------------

November 30, 2002         $62,590        $21,424          $7,615          $91,244        $48,537            $49,699



1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.
                        Class A          Class B        Class C          Class N
                     Contingent       Contingent     Contingent       Contingent
                       Deferred         Deferred       Deferred         Deferred
                  Sales Charges    Sales Charges  Sales Charges    Sales Charges
                    Retained by      Retained by    Retained by      Retained by
Year Ended          Distributor      Distributor    Distributor      Distributor
- --------------------------------------------------------------------------------
November 30, 2002           $--           $8,641         $2,017           $3,541

- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended November 30, 2002, payments under
the Class A Plan totaled $12,376, all of which were paid by the Distributor to
recipients, and included $814 paid to an affiliate of the Manager. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per year
under each plan.

Distribution fees paid to the Distributor for the year ended November 30, 2002,
were as follows:



                                                                   Distributor's
                                                 Distributor's        Aggregate
                                                     Aggregate     Unreimbursed
                           Unreimbursed Expenses as %
               Total Payments  Amount Retained        Expenses    of Net Assets
                   Under Plan   by Distributor      Under Plan         of Class
- --------------------------------------------------------------------------------
 Class B Plan         $34,095          $30,715        $163,386             3.78%
 Class C Plan          57,794           38,465         121,309             1.77
 Class N Plan          15,207            5,770          99,503             1.75

- --------------------------------------------------------------------------------
5. Foreign Currency Contracts

A foreign currency contract is a commitment to purchase or sell a foreign
currency at a future date, at a negotiated rate. The Fund may enter into foreign
currency contracts to

        25 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND

NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
5. Foreign Currency Contracts Continued

settle specific purchases or sales of securities denominated in a foreign
currency and to seek to protect against adverse exchange rate fluctuation. Risks
to the Fund include the potential inability of the counterparty to meet the
terms of the contract.
    The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation or
depreciation are determined using prevailing foreign currency exchange rates.
Unrealized appreciation and depreciation on foreign currency contracts are
reported in the Statement of Assets and Liabilities as a receivable or payable
and in the Statement of Operations with the change in unrealized appreciation or
depreciation.
    The Fund may realize a gain or loss upon the closing or settlement of the
forward transaction. Such realized gains and losses are reported with all other
foreign currency gains and losses in the Statement of Operations.

- --------------------------------------------------------------------------------
6. Borrowing and Lending Arrangements
Bank Borrowings. Until November 12, 2002, the Fund had the ability to borrow
from a bank for temporary or emergency purposes provided asset coverage for
borrowings exceeded 300%. The Fund and other Oppenheimer funds participated in a
$400 million unsecured line of credit with a bank. Under that unsecured line of
credit, interest was charged to each fund, based on its borrowings, at a rate
equal to the Federal Funds Rate plus 0.45%. Under that credit facility, the Fund
paid a commitment fee equal to its pro rata share of the average unutilized
amount of the credit facility at a rate of 0.08% per annum.
- --------------------------------------------------------------------------------
Interfund Borrowing and Lending Arrangements. Effective November 12, 2002, the
following interfund borrowing and lending arrangements went into effect.
Consistent with its fundamental policies and pursuant to an exemptive order
issued by the Securities and Exchange Commission ("SEC"), the Fund may engage in
borrowing and lending activities with other funds in the OppenheimerFunds
complex. Borrowing money from affiliated funds may afford the Fund the
flexibility to use the most cost-effective alternative to satisfy its borrowing
requirements. Lending money to an affiliated fund may allow the Fund to obtain a
higher rate of return than it could from interest rates on alternative
short-term investments. Implementation of interfund lending will be accomplished
consistent with applicable regulatory requirements, including the provisions of
the SEC order. There is a risk that a borrowing fund could have a loan called on
one day's notice. In that circumstance, the Fund might have to borrow from a
bank at a higher interest cost if money to lend were not available from another
Oppenheimer fund. When the Fund lends assets to another affiliated fund, the
Fund is subject to the risk that the borrowing fund fails to repay the loan.

    The Fund had no borrowing or lending arrangements outstanding during the
year ended or at November 30, 2002.

        26 | OPPENHEIMER SELECT MANAGERS SALOMON BROTHERS ALL CAP FUND


INDEPENDENT AUDITORS' REPORT

- --------------------------------------------------------------------------------
 To the Board of Trustees and Shareholders of Oppenheimer Select Managers
 Gartmore Millennium Growth Fund II:

 We have audited the accompanying statement of assets and liabilities of
 Oppenheimer Select Managers Gartmore Millennium Growth Fund II, which is a
 series of Oppenheimer Select Managers, including the statement of investments,
 as of November 30, 2002, and the related statement of operations for the year
 then ended, the statements of changes in net assets and the financial
 highlights for the periods indicated. These financial statements and financial
 highlights are the responsibility of the Fund's management. Our responsibility
 is to express an opinion on these financial statements and financial highlights
 based on our audits.
    We conducted our audits in accordance with auditing standards generally
 accepted in the United States of America. Those standards require that we plan
 and perform the audit to obtain reasonable assurance about whether the
 financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence supporting
 the amounts and disclosures in the financial statements. Our procedures
 included confirmation of securities owned as of November 30, 2002, by
 correspondence with the custodian and brokers; where replies were not received
 from brokers, we performed other auditing procedures. An audit also includes
 assessing the accounting principles used and significant estimates made by
 management, as well as evaluating the overall financial statement presentation.
 We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the financial statements and financial highlights referred
 to above present fairly, in all material respects, the financial position of
 Oppenheimer Select Managers Gartmore Millennium Growth Fund II as of November
 30, 2002, the results of its operations for the year then ended, the changes in
 its net assets and the financial highlights for the periods indicated, in
 conformity with accounting principles generally accepted in the United States
 of America.



 /s/ Deloitte & Touche LLP
 -------------------------
 Deloitte & Touche LLP

 Denver, Colorado
 December 20, 2002



STATEMENT OF INVESTMENTS

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Common Stocks--104.4%
- ----------------------------------------------------------------
 Consumer Discretionary--19.9%
- ----------------------------------------------------------------
 Auto Components--1.5%
 CarMax, Inc. 1                            1,913    $    37,686
- ----------------------------------------------------------------
 Gentex Corp. 1                              472         14,165
                                                    ------------
                                                         51,851

- ----------------------------------------------------------------
 Hotels, Restaurants & Leisure--3.4%
 CBRL Group, Inc.                            807         21,999
- ----------------------------------------------------------------
 Cheesecake Factory, Inc. (The) 1          1,021         36,409
- ----------------------------------------------------------------
 Darden Restaurants, Inc.                    938         20,289
- ----------------------------------------------------------------
 International Game Technology 1             310         23,901
- ----------------------------------------------------------------
 Yum! Brands, Inc. 1                         712         17,024
                                                    ------------
                                                        119,622

- ----------------------------------------------------------------
 Household Durables--1.4%
 Mohawk Industries, Inc. 1                   353         21,748
- ----------------------------------------------------------------
 Newell Rubbermaid, Inc.                     877         27,819
                                                    ------------
                                                         49,567

- ----------------------------------------------------------------
 Internet & Catalog Retail--2.0%
 Amazon.com, Inc. 1                        1,520         35,492
- ----------------------------------------------------------------
 eBay, Inc. 1                                510         35,149
                                                    ------------
                                                         70,641

- ----------------------------------------------------------------
 Media--2.0%
 Getty Images, Inc. 1                        859         25,658
- ----------------------------------------------------------------
 Insight Communications Co., Inc. 1        1,427         19,764
- ----------------------------------------------------------------
 Regal Entertainment Group                 1,212         27,391
                                                    ------------
                                                         72,813

- ----------------------------------------------------------------
 Multiline Retail--1.3%
 99 Cents Only Stores 1                      714         19,970
- ----------------------------------------------------------------
 Family Dollar Stores, Inc.                  920         27,131
                                                    ------------
                                                         47,101

- ----------------------------------------------------------------
 Specialty Retail--8.3%
 Advance Auto Parts, Inc. 1                  604         31,136
- ----------------------------------------------------------------
 AutoZone, Inc. 1                            280         22,876
- ----------------------------------------------------------------
 Bed Bath & Beyond, Inc. 1                 1,890         65,564
- ----------------------------------------------------------------
 GameStop Corp. 1                          3,487         64,858
- ----------------------------------------------------------------
 Guitar Center, Inc. 1                     1,190         23,753
- ----------------------------------------------------------------
 Rent-A-Center, Inc. 1                       309         15,354
- ----------------------------------------------------------------
 Tiffany & Co.                               657         18,646
- ----------------------------------------------------------------
 TJX Cos., Inc. (The)                        874         17,104
- ----------------------------------------------------------------
 Tractor Supply Co. 1                        448         19,926
- ----------------------------------------------------------------
 Williams-Sonoma, Inc. 1                     683         17,990
                                                    ------------
                                                        297,207

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Consumer Staples--3.2%
- ----------------------------------------------------------------
 Beverages--1.3%
 Constellation Brands, Inc., Cl. A 1         920    $    21,638
- ----------------------------------------------------------------
 Pepsi Bottling Group, Inc. (The)            827         23,752
                                                    ------------
                                                         45,390

- ----------------------------------------------------------------
 Food & Drug Retailing--0.8%
 Whole Foods Market, Inc. 1                  557         29,604
- ----------------------------------------------------------------
 Food Products--1.1%
 Wrigley, William Jr. Co.                    720         38,729
- ----------------------------------------------------------------
 Energy--4.0%
- ----------------------------------------------------------------
 Energy Equipment & Services--2.3%
 Nabors Industries Ltd. 1                    580         20,532
- ----------------------------------------------------------------
 Pride International, Inc. 1               2,160         30,197
- ----------------------------------------------------------------
 Smith International, Inc. 1                 936         31,824
                                                    ------------
                                                         82,553

- ----------------------------------------------------------------
 Oil & Gas--1.7%
 Burlington Resources, Inc.                  596         25,104
- ----------------------------------------------------------------
 Noble Energy, Inc.                          947         35,048
                                                    ------------
                                                         60,152

- ----------------------------------------------------------------
 Financials--7.7%
- ----------------------------------------------------------------
 Banks--2.3%
 Charter One Financial, Inc.                 755         22,726
- ----------------------------------------------------------------
 Investors Financial Services Corp.          577         20,183
- ----------------------------------------------------------------
 Synovus Financial Corp.                   1,840         38,327
                                                    ------------
                                                         81,236

- ----------------------------------------------------------------
 Diversified Financials--3.3%
 Federated Investors, Inc., Cl. B            679         18,367
- ----------------------------------------------------------------
 Moody's Corp.                               589         25,928
- ----------------------------------------------------------------
 Portfolio Recovery Associates, Inc. 1     2,283         40,158
- ----------------------------------------------------------------
 SLM Corp.                                   337         32,935
                                                    ------------
                                                        117,388

- ----------------------------------------------------------------
 Insurance--1.4%
 AMBAC Financial Group, Inc.                 806         50,383
- ----------------------------------------------------------------
 Real Estate--0.7%
 Host Marriott Corp. 1                     2,767         25,318
- ----------------------------------------------------------------
 Health Care--23.8%
- ----------------------------------------------------------------
 Biotechnology--3.1%
 Biogen, Inc. 1                              510         22,573
- ----------------------------------------------------------------
 Gilead Sciences, Inc. 1                     715         28,185
- ----------------------------------------------------------------
 IDEC Pharmaceuticals Corp. 1                610         20,069
- ----------------------------------------------------------------
 Medimmune, Inc. 1                         1,120         29,546
- ----------------------------------------------------------------
 Millennium Pharmaceuticals, Inc. 1          920          9,209
                                                    ------------
                                                        109,582

6 OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Health Care Equipment & Supplies--6.9%
 Biomet, Inc.                              1,530    $    42,075
- ----------------------------------------------------------------
 Boston Scientific Corp. 1                   602         25,284
- ----------------------------------------------------------------
 Dentsply International, Inc.                786         26,370
- ----------------------------------------------------------------
 ResMed, Inc. 1                            1,127         36,526
- ----------------------------------------------------------------
 St. Jude Medical, Inc. 1                  1,100         38,302
- ----------------------------------------------------------------
 Stryker Corp.                               506         31,296
- ----------------------------------------------------------------
 Varian Medical Systems, Inc. 1              572         26,707
- ----------------------------------------------------------------
 Zimmer Holdings, Inc. 1                     540         20,326
                                                    ------------
                                                        246,886

- ----------------------------------------------------------------
 Health Care Providers & Services--11.2%
 Advisory Board Co. (The) 1                  546         16,926
- ----------------------------------------------------------------
 AmerisourceBergen Corp.                     250         14,505
- ----------------------------------------------------------------
 Anthem, Inc. 1                              303         17,953
- ----------------------------------------------------------------
 Caremark Rx, Inc. 1                         920         16,247
- ----------------------------------------------------------------
 Community Health Systems, Inc.            1,486         30,537
- ----------------------------------------------------------------
 Express Scripts, Inc. 1                     564         28,544
- ----------------------------------------------------------------
 First Health Group Corp. 1                  716         17,084
- ----------------------------------------------------------------
 Health Management Assn., Inc., Cl. A      1,084         19,002
- ----------------------------------------------------------------
 ICON plc, Sponsored ADR 1                 1,757         40,938
- ----------------------------------------------------------------
 Laboratory Corp. of America Holdings 1      596         14,304
- ----------------------------------------------------------------
 McKesson Corp.                              648         16,796
- ----------------------------------------------------------------
 Medical Staffing Network
 Holdings, Inc. 1                          1,033         16,993
- ----------------------------------------------------------------
 Pharmaceutical Product
 Development, Inc. 1                       1,020         30,549
- ----------------------------------------------------------------
 Priority Healthcare Corp., Cl. B 1        1,377         30,322
- ----------------------------------------------------------------
 Schein (Henry), Inc. 1                      334         14,215
- ----------------------------------------------------------------
 Triad Hospitals, Inc. 1                     884         26,653
- ----------------------------------------------------------------
 Universal Health Services, Inc., Cl. B 1    410         18,347
- ----------------------------------------------------------------
 WellPoint Health Networks, Inc. 1           447         29,426
                                                    ------------
                                                        399,341

- ----------------------------------------------------------------
 Pharmaceuticals--2.6%
 Allergan, Inc.                              550         32,334
- ----------------------------------------------------------------
 Barr Laboratories, Inc. 1                   161         10,631
- ----------------------------------------------------------------
 IVAX Corp. 1                              1,037         14,010
- ----------------------------------------------------------------
 Medicis Pharmaceutical Corp., Cl. A 1       391         18,084
- ----------------------------------------------------------------
 Watson Pharmaceuticals, Inc. 1              610         18,294
                                                    ------------
                                                         93,353

- ----------------------------------------------------------------
 Industrials--15.7%
- ----------------------------------------------------------------
 Aerospace & Defense--0.4%
 InVision Technologies, Inc. 1               510         14,755
- ----------------------------------------------------------------
 Airlines--1.0%
 JetBlue Airways Corp. 1                     988         36,576
- ----------------------------------------------------------------
 Building Products--1.0%
 Masco Corp.                               1,784         35,983

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Commercial Services & Supplies--11.0%
 Administaff, Inc. 1                       2,287    $    15,552
- ----------------------------------------------------------------
 Apollo Group, Inc., Cl. A 1                 775         31,969
- ----------------------------------------------------------------
 Automatic Data Processing, Inc.             400         17,388
- ----------------------------------------------------------------
 BISYS Group, Inc. (The) 1                   604         12,249
- ----------------------------------------------------------------
 Career Education Corp. 1                    323         12,568
- ----------------------------------------------------------------
 CheckFree Corp. 1                         1,120         21,941
- ----------------------------------------------------------------
 ChoicePoint, Inc. 1                       1,046         39,309
- ----------------------------------------------------------------
 Cintas Corp.                                510         25,740
- ----------------------------------------------------------------
 Corporate Executive Board Co. 1             503         16,599
- ----------------------------------------------------------------
 First Data Corp.                            510         17,666
- ----------------------------------------------------------------
 Fiserv, Inc. 1                            1,330         45,114
- ----------------------------------------------------------------
 H&R Block, Inc.                       1,001         38,368
- ----------------------------------------------------------------
 Iron Mountain, Inc. 1                       883         29,218
- ----------------------------------------------------------------
 Stericycle, Inc. 1                          978         32,586
- ----------------------------------------------------------------
 Weight Watchers International, Inc. 1       762         34,480
                                                    ------------
                                                        390,747

- ----------------------------------------------------------------
 Electrical Equipment--0.5%
 AU Optronics Corp., ADR 1                 2,400         16,464
- ----------------------------------------------------------------
 Machinery--1.5%
 Danaher Corp.                               410         25,764
- ----------------------------------------------------------------
 SureBeam Corp., Cl. A 1                   5,310         28,621
                                                    ------------
                                                         54,385

- ----------------------------------------------------------------
 Trading Companies & Distributors--0.3%
 Fastenal Co.                                310         11,076
- ----------------------------------------------------------------
 Information Technology--27.7%
- ----------------------------------------------------------------
 Communications Equipment--3.3%
 3Com Corp. 1                              3,600         18,540
- ----------------------------------------------------------------
 Avaya, Inc. 1                             6,900         20,010
- ----------------------------------------------------------------
 CommScope, Inc. 1                         1,000          9,000
- ----------------------------------------------------------------
 Comverse Technology, Inc. 1               1,300         15,756
- ----------------------------------------------------------------
 JDS Uniphase Corp. 1                      2,700          9,207
- ----------------------------------------------------------------
 Sycamore Networks, Inc. 1                 5,600         17,360
- ----------------------------------------------------------------
 Tellabs, Inc. 1                           3,000         26,610
                                                    ------------
                                                        116,483

- ----------------------------------------------------------------
 Computers & Peripherals--3.9%
 ATI Technologies, Inc. 1                  4,600         37,122
- ----------------------------------------------------------------
 Dell Computer Corp. 1                       720         20,592
- ----------------------------------------------------------------
 Lexmark International, Inc., Cl. A 1        200         13,228
- ----------------------------------------------------------------
 Pinnacle Systems, Inc. 1                  1,600         22,608
- ----------------------------------------------------------------
 SanDisk Corp. 1                           1,200         33,300
- ----------------------------------------------------------------
 Sigma Designs, Inc. 1                     2,600         10,501
                                                    ------------
                                                        137,351

7 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENT OF INVESTMENTS  Continued

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Electronic Equipment & Instruments--3.2%
 Fisher Scientific International, Inc. 1   1,140     $   34,155
- ----------------------------------------------------------------
 PerkinElmer, Inc.                         3,600         30,816
- ----------------------------------------------------------------
 ScanSource, Inc. 1                          356         25,988
- ----------------------------------------------------------------
 Waters Corp. 1                              904         24,227
                                                    ------------
                                                        115,186

- ----------------------------------------------------------------
 Internet Software & Services--1.0%
 Ameritrade Holding Corp. 1                3,300         16,995
- ----------------------------------------------------------------
 Yahoo!, Inc. 1                            1,100         20,097
                                                    ------------
                                                         37,092

- ----------------------------------------------------------------
 IT Consulting & Services--1.7%
 Anteon International Corp. 1                720         16,812
- ----------------------------------------------------------------
 MPS Group, Inc. 1                         2,660         15,960
- ----------------------------------------------------------------
 Unisys Corp. 1                            2,500         28,000
                                                    ------------
                                                         60,772

- ----------------------------------------------------------------
 Office Electronics--0.6%
 Zebra Technologies Corp., Cl. A 1           351         22,541
- ----------------------------------------------------------------
 Semiconductor Equipment & Products--6.0%
 Altera Corp. 1                            1,500         21,795
- ----------------------------------------------------------------
 Analog Devices, Inc. 1                      320          9,821
- ----------------------------------------------------------------
 ChipPAC, Inc. 1                           4,600         20,796
- ----------------------------------------------------------------
 Linear Technology Corp.                   1,020         33,895
- ----------------------------------------------------------------
 National Semiconductor Corp. 1            1,400         28,420
- ----------------------------------------------------------------
 Skyworks Solutions, Inc. 1                4,460         53,743
- ----------------------------------------------------------------
 Taiwan Semiconductor
 Manufacturing Co. Ltd., ADR               4,900         45,080
                                                    ------------
                                                        213,550

- ----------------------------------------------------------------
 Software--8.0%
 Adobe Systems, Inc.                         700         20,671
- ----------------------------------------------------------------
 Autodesk, Inc.                            1,200         18,588
- ----------------------------------------------------------------
 BEA Systems, Inc. 1                       1,300         14,378
- ----------------------------------------------------------------
 Cadence Design Systems, Inc. 1            1,120         16,150
- ----------------------------------------------------------------
 Electronic Arts, Inc. 1                     610         41,395
- ----------------------------------------------------------------
 Informatica Corp. 1                       2,600         17,940
- ----------------------------------------------------------------
 Intuit, Inc. 1                              500         26,970
- ----------------------------------------------------------------
 Network Associates, Inc. 1                1,220         22,265
- ----------------------------------------------------------------
 SAP AG (Systeme, Anwendungen,
 Produkte in der Datenverarbeitung),
 Sponsored ADR                               820         18,245
- ----------------------------------------------------------------
 Symantec Corp. 1                            800         34,984
- ----------------------------------------------------------------
 Take-Two Interactive Software, Inc. 1       600         17,958
- ----------------------------------------------------------------
 Veritas Software Corp. 1                  1,900         34,542
                                                    ------------
                                                        284,086

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Materials--1.9%
- ----------------------------------------------------------------
 Chemicals--1.4%
 Ecolab, Inc.                                586    $    29,106
- ----------------------------------------------------------------
 International Flavors & Fragrances, Inc.    691         22,817
                                                    ------------
                                                         51,923

- ----------------------------------------------------------------
 Metals & Mining--0.5%
 Nucor Corp.                                 363         18,237
- ----------------------------------------------------------------
 Telecommunication Services--0.5%
- ----------------------------------------------------------------
 Wireless Telecommunication Services--0.5%
 Vodafone Group plc, Sponsored ADR         1,000         18,750
                                                    ------------
 Total Common Stocks (Cost $3,686,118)                3,724,674

- ----------------------------------------------------------------
 Total Investments, at Value
 (Cost $3,686,118)                         104.4%     3,724,674
- ----------------------------------------------------------------
 Liabilities in Excess of Other Assets      (4.4)      (158,564)
                                           ---------------------
 Net Assets                                100.0%   $ 3,566,110
                                           =====================


Footnotes to Statement of Investments


1. Non-income producing security.

See accompanying Notes to Financial Statements.

8 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENT OF ASSETS AND LIABILITIES November 30, 2002


- -----------------------------------------------------------------------------------------
 Assets

 Investments, at value (cost $3,686,118)--see accompanying statement         $ 3,724,674
- -----------------------------------------------------------------------------------------
 Receivables and other assets:
 Investments sold                                                                183,601
 Interest and dividends                                                              754
 Shares of beneficial interest sold                                                  458
 Other                                                                               846
                                                                             ------------
 Total assets                                                                  3,910,333

- -----------------------------------------------------------------------------------------
 Liabilities
 Bank overdraft                                                                   86,049
- -----------------------------------------------------------------------------------------
 Payables and other liabilities:
 Investments purchased                                                           238,636
 Shareholder reports                                                               9,963
 Legal, auditing and other professional fees                                       7,659
 Transfer and shareholder servicing agent fees                                       569
 Trustees' compensation                                                              321
 Distribution and service plan fees                                                  210
 Other                                                                               816
                                                                             ------------
 Total liabilities                                                               344,223

- -----------------------------------------------------------------------------------------
 Net Assets                                                                  $ 3,566,110
                                                                             ============

- -----------------------------------------------------------------------------------------
 Composition of Net Assets
 Paid-in capital                                                             $ 5,783,279
- -----------------------------------------------------------------------------------------
 Accumulated net realized loss on investment transactions                     (2,255,725)
- -----------------------------------------------------------------------------------------
 Net unrealized appreciation on investments                                       38,556
                                                                             ------------
 Net Assets                                                                  $ 3,566,110
                                                                             ============


9 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


STATEMENT OF ASSETS AND LIABILITIES Continued



- -----------------------------------------------------------------------------------------

 Net Asset Value Per Share
 Class A Shares:
 Net asset value and redemption price per share
 (based on net assets of $3,147,846 and 545,996
 shares of beneficial interest outstanding)                                        $5.77
 Maximum offering price per share (net asset value
 plus sales charge of 5.75% of offering price)                                     $6.12
- -----------------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $193,490 and
 34,012
 shares of beneficial interest outstanding)                                        $5.69
- -----------------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $156,099 and
 27,452
 shares of beneficial interest outstanding)                                        $5.69
- -----------------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $68,096 and
 11,882
 shares of beneficial interest outstanding)                                        $5.73
- -----------------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share (based on net
 assets of $579 and 100 shares
 of beneficial interest outstanding)                                               $5.79




 See accompanying Notes to Financial Statements.

10 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENT OF OPERATIONS For the Year Ended November 30, 2002

- --------------------------------------------------------------------------------
 INVESTMENT INCOME
 Dividends (net of foreign withholding taxes of $61)               $     9,524
- --------------------------------------------------------------------------------
 Interest                                                                3,247
                                                                   -------------
 Total investment income                                                12,771

- --------------------------------------------------------------------------------
 Expenses
 Management fees                                                        46,707
- --------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                   593
 Class B                                                                 1,479
 Class C                                                                 1,309
 Class N                                                                   251
- --------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                 4,697
 Class B                                                                   849
 Class C                                                                   547
 Class N                                                                   276
 Class Y                                                                   866
- --------------------------------------------------------------------------------
 Shareholder reports                                                    18,055
- --------------------------------------------------------------------------------
 Legal, auditing and other professional fees                            10,667
- --------------------------------------------------------------------------------
 Trustees' compensation                                                  3,945
- --------------------------------------------------------------------------------
 Custodian fees and expenses                                                82
- --------------------------------------------------------------------------------
 Other                                                                   1,680
                                                                   -------------
 Total expenses                                                         92,003
 Less voluntary reimbursement of expenses                              (19,411)
 Less voluntary waiver of transfer and shareholder
 servicing agent fees--Classes A, B, C and N                            (1,433)
 Less voluntary waiver of transfer and shareholder
 servicing agent fees--Class Y                                            (863)
                                                                   -------------
 Net expenses                                                           70,296

- --------------------------------------------------------------------------------
 Net Investment Loss                                                   (57,525)

- --------------------------------------------------------------------------------
 Realized and Unrealized Loss
 Net realized loss on investments                                     (885,171)
- --------------------------------------------------------------------------------
 Net change in unrealized depreciation on investments                 (121,962)
                                                                   -------------
 Net realized and unrealized loss                                   (1,007,133)

- --------------------------------------------------------------------------------
 Net Decrease in Net Assets Resulting from Operations              $(1,064,658)
                                                                   =============



 See accompanying Notes to Financial Statements.




11 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENTS OF CHANGES IN NET ASSETS



 Year Ended November 30,                                      2002          2001 1
- ------------------------------------------------------------------------------------

 Operations
 Net investment loss                                   $   (57,525)    $   (37,343)
- ------------------------------------------------------------------------------------
 Net realized loss                                        (885,171)     (1,370,554)
- ------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation)     (121,962)        160,518
                                                       -----------------------------
 Net decrease in net assets resulting from operations   (1,064,658)     (1,247,379)

- ------------------------------------------------------------------------------------
 Beneficial Interest Transactions Net increase in net assets resulting from
 beneficial interest transactions:
 Class A                                                    79,719       5,282,582
 Class B                                                   133,805          88,164
 Class C                                                    79,667         118,917
 Class N                                                    50,078          28,215
 Class Y                                                        --              --

- ------------------------------------------------------------------------------------
 Net Assets
 Total increase (decrease)                                (721,389)      4,270,499
- ------------------------------------------------------------------------------------
 Beginning of period                                     4,287,499          17,000 2
                                                       -----------------------------
 End of period                                         $ 3,566,110     $ 4,287,499
                                                       =============================




1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Reflects the value of the Manager's initial seed money investment at
December 22, 2000.



 See accompanying Notes to Financial Statements.




12 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

FINANCIAL HIGHLIGHTS



                                                                   Class A                     Class B                     Class C
                                                                      Year                        Year                        Year
                                                                     Ended                       Ended                       Ended
                                                                  Nov. 30,                    Nov. 30,                    Nov. 30,
                                                        2002          2001 1        2002          2001 1        2002          2001 1
- ------------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                 $ 7.56        $10.00        $ 7.51        $10.00        $ 7.51        $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                    (.09)         (.07)         (.05)         (.14)         (.11)         (.04)
 Net realized and unrealized loss                      (1.70)        (2.37)        (1.77)        (2.35)        (1.71)        (2.45)
                                                     -------------------------------------------------------------------------------
 Total from investment operations                      (1.79)        (2.44)        (1.82)        (2.49)        (1.82)        (2.49)
- ------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                        $5.77        $ 7.56         $5.69        $ 7.51         $5.69        $ 7.51
                                                     ===============================================================================

- ------------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                   (23.68)%      (24.40)%      (24.23)%      (24.90)%      (24.23)%      (24.90)%

- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)             $3,148        $4,046          $193          $ 95          $156          $114
- ------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $3,560        $4,255          $148          $118          $131          $ 40
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                   (1.42)%       (1.04)%       (2.16)%       (1.93)%       (2.16)%       (1.93)%
 Expenses                                               2.24%         1.75%         3.66%         2.74%         3.51%         2.76%
 Expenses, net of voluntary reimbursement of expenses
 and/or voluntary waiver of transfer agent fees         1.73%         1.75%         2.77%         2.57%         2.79%         2.28%
- ------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                 408%          370%          408%          370%          408%          370%




1. For the period from February 16, 2001 (inception of offering) to November 30,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year. See accompanying Notes to
Financial Statements.

13 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


FINANCIAL HIGHLIGHTS  Continued


                                                              Class N           Class Y
                                                                 Year              Year
                                                                Ended             Ended
                                                             Nov. 30,          Nov. 30,
                                                        2002   2001 1     2002   2001 2
- -----------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                 $ 7.53   $ 9.06   $ 7.57   $10.00
- -----------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                    (.10)    (.03)    (.08)    (.05)
 Net realized and unrealized loss                      (1.70)   (1.50)   (1.70)   (2.38)
                                                    -------------------------------------
 Total from investment operations                      (1.80)   (1.53)   (1.78)   (2.43)
- -----------------------------------------------------------------------------------------
 Net asset value, end of period                        $5.73    $7.53    $5.79    $7.57
                                                    =====================================

- -----------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 3                   (23.90)% (16.89)% (23.51)% (24.30)%

- -----------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                $68      $31       $1       $1
- -----------------------------------------------------------------------------------------
 Average net assets (in thousands)                       $50      $ 9       $1       $1
 Ratios to average net assets: 4
 Net investment loss                                   (1.67)%  (1.53)%  (0.80)%  (0.63)%
 Expenses                                               3.14%    2.27%   88.69%  501.80%
 Expenses, net of voluntary reimbursement of expenses
 and/or voluntary waiver of transfer agent fees         2.28%    1.74%    1.62%    1.45%
- -----------------------------------------------------------------------------------------
 Portfolio turnover rate                                 408%     370%     408%     370%



1. For the period from March 1, 2001 (inception of offering) to November 30,
2001. 2. For the period from February 16, 2001 (inception of offering) to
November 30, 2001.
3. Assumes an investment on the business day before the first day of the fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year. See accompanying Notes to
Financial Statements.

14 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Select Managers Gartmore Millennium Growth Fund II (the Fund), a
series of Oppenheimer Select Managers, is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek long-term capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager
has entered into a sub-advisory agreement with Gartmore Mutual Fund Capital
Trust (the Sub-Advisor).
         The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have identical
rights and voting privileges. Earnings, net assets and net asset value per share
may differ by minor amounts due to each class having its own expenses directly
attributable to that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class B
shares will automatically convert to Class A shares six years after the date of
purchase.
         The following is a summary of significant accounting policies
consistently followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other affiliated funds of the
Manager, may transfer uninvested cash balances into one or more joint repurchase
agreement accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal; however,
in the event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
    During the fiscal year ended November 30, 2002, the Fund did not utilize any
capital loss carryforward.

15 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
 1. Significant Accounting Policies Continued
 As of November 30, 2002, the Fund had available for federal income tax purposes
 unused capital loss carryforwards as follows:

                  Expiring
                  -------------------------------------
                  2009                       $1,370,554
                  2010                          880,670
                                             ----------
                  Total                      $2,251,224
                                             ==========

 As of November 30, 2002, the Fund had approximately $5,000 of post-October
 losses available to offset future capital gains, if any. Such losses, if
 unutilized, will expire in 2011.
- --------------------------------------------------------------------------------
 Dividends and Distributions to Shareholders. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
 Classification of Distributions to Shareholders. Net investment income (loss)
 and net realized gain (loss) may differ for financial statement and tax
 purposes. The character of dividends and distributions made during the fiscal
 year from net investment income or net realized gains may differ from their
 ultimate characterization for federal income tax purposes. Also, due to timing
 of dividends and distributions, the fiscal year in which amounts are
 distributed may differ from the fiscal year in which the income or net realized
 gain was recorded by the Fund.
    The Fund adjusts the classification of distributions to shareholders to
 reflect the differences between financial statement amounts and distributions
 determined in accordance with income tax regulations. Accordingly, during the
 year ended November 30, 2002, amounts have been reclassified to reflect
 decrease in paid-in capital $57,525. Accumulated net investment loss was
 decreased by the same amount. Net assets of the Fund were unaffected by the
 reclassifications.
    No distributions were paid during the year ended November 30, 2002 and the
 period ended November 30, 2001.

 As of November 30, 2002, the components of distributable earnings on a tax
 basis were as follows:

                 Accumulated net realized loss        $(2,255,725)
                 Net unrealized appreciation               38,556
                                                      -----------
                 Total                                $(2,217,169)
                                                      ===========

- --------------------------------------------------------------------------------
 Investment Income. Dividend income is recorded on the ex-dividend date or upon
 ex-dividend notification in the case of certain foreign dividends where the
 ex-dividend date may have passed. Non-cash dividends included in dividend
 income, if any, are recorded at the fair market value of the securities
 received. Interest income, which includes accretion of discount and
 amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
 Security Transactions. Security transactions are recorded on the trade date.
 Realized gains and losses on securities sold are determined on the basis of
 identified cost.
- --------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial state- ments and the reported amounts of income
 and expenses during the reporting period. Actual results could differ from
 those estimates.

16 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


- --------------------------------------------------------------------------------
 2. Shares of Beneficial Interest
 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:



                            Year Ended November 30, 2002      Period Ended November 30, 2001 1
                                Shares            Amount              Shares            Amount
- -----------------------------------------------------------------------------------------------

 Class A
 Sold                           30,084         $ 196,309             595,277        $5,822,887
 Redeemed                      (19,548)         (116,590)            (61,217)         (540,305)
                               ----------------------------------------------------------------
 Net increase                   10,536         $  79,719             534,060        $5,282,582
                               ================================================================
- -----------------------------------------------------------------------------------------------
 Class B
 Sold                           42,282         $ 258,845              69,186        $  598,656
 Redeemed                      (20,912)         (125,040)            (56,644)         (510,492)
                               ----------------------------------------------------------------
 Net increase                   21,370         $ 133,805              12,542        $   88,164
                               ================================================================
- -----------------------------------------------------------------------------------------------
 Class C
 Sold                           20,939         $ 138,980              15,134        $  119,151
 Redeemed                       (8,689)          (59,313)                (32)             (234)
                               ----------------------------------------------------------------
 Net increase                   12,250         $  79,667              15,102        $  118,917
                               ================================================================
- -----------------------------------------------------------------------------------------------
 Class N
 Sold                            7,953         $  51,460               4,166        $   28,215
 Redeemed                         (237)           (1,382)                 --                --
                               ----------------------------------------------------------------
 Net increase                    7,716         $  50,078               4,166        $   28,215
                               ================================================================
- -----------------------------------------------------------------------------------------------
 Class Y
 Sold                               --         $      --                  --        $       --
 Redeemed                           --                --                  --                --
                               ----------------------------------------------------------------
 Net increase (decrease)            --         $      --                  --        $       --
                               ================================================================


 1. For the period from February 16, 2001 (inception of offering) to November
 30, 2001, for Class A, B, C and Y shares and for the period from March 1, 2001
 (inception of offering) to November 30, 2001, for Class N shares.

- --------------------------------------------------------------------------------
 3. Purchases and Sales of Securities The aggregate cost of purchases and
 proceeds from sales of securities, other than short-term obligations, for the
 year ended November 30, 2002, were $16,210,702 and $15,219,389, respectively.

 As of November 30, 2002, unrealized appreciation (depreciation) based on cost
 of securities for federal income tax purposes of $3,686,118 was composed of:

            Gross unrealized appreciation      $ 251,856
            Gross unrealized depreciation       (213,300)
                                               ---------
            Net unrealized appreciation        $  38,556
                                               =========

 The difference between book-basis and tax-basis unrealized appreciation and
 depreciation, if applicable, is attributable primarily to the tax deferral of
 losses on wash sales, or return of capital dividends, and the realization for
 tax purposes of unrealized gain (loss) on certain futures contracts,
 investments in passive foreign investment companies, and forward foreign
 currency exchange contracts.

17 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.20% of the first $400 million of average annual net assets of
the Fund, 1.10% of the next $400 million, and 1.00% of average annual net assets
in excess of $800 million. The Manager has voluntarily undertaken to assume
certain Fund expenses. The Manager reserves the right to amend or terminate that
expense assumption at any time.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager has retained Gartmore Mutual Fund Capital Trust as
the Sub-Advisor to provide the day-to-day portfolio management of the Fund. For
the year ended November 30, 2002, the Manager paid $27,568 to the Sub-Advisor.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund pays
OFS a $19.75 per account fee.
    Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
    OFS has voluntarily agreed to limit transfer and shareholder servicing agent
fees up to an annual rate of 0.35% for all classes. Effective November 1, 2002,
Class Y shares were changed from 0.25% to 0.35%. This undertaking may be amended
or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the period
indicated.



                   Aggregate        Class A      Concessions       Concessions       Concessions      Concessions
                   Front-End      Front-End       on Class A        on Class B        on Class C       on Class N
               Sales Charges  Sales Charges           Shares            Shares            Shares           Shares
                  on Class A    Retained by      Advanced by       Advanced by       Advanced by      Advanced by
Year Ended            Shares    Distributor    Distributor 1     Distributor 1     Distributor 1    Distributor 1
- -----------------------------------------------------------------------------------------------------------------

November 30, 2002     $2,876         $1,899               $7            $4,524              $926             $279


1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.



                                            Class A                   Class B                   Class C                   Class N
                                Contingent Deferred       Contingent Deferred       Contingent Deferred       Contingent Deferred
                                      Sales Charges             Sales Charges             Sales Charges             Sales Charges
                                        Retained by               Retained by               Retained by               Retained by
Year Ended                              Distributor               Distributor               Distributor               Distributor
- ----------------------------------------------------------------------------------------------------------------------------------

November 30, 2002                               $--                    $2,142                        $8                        $4


- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class A
shares. It reimburses the Distributor for a portion of its costs incurred for
services provided to accounts that hold Class A shares. Reimbursement is made
quarterly at an annual rate of up to 0.25% of the average annual net assets of
Class A shares of the Fund. For the year ended November 30, 2002, payments under
the Class A Plan totaled $593, all of which were paid by the Distributor to
recipients, and included $167 paid to an affiliate of the Manager. Any
unreimbursed expenses the Distributor incurs with respect to Class A shares in
any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per year
under each plan.


18 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

 Distribution fees paid to the Distributor for the year ended November 30, 2002,
 were as follows:



                                                                                                          Distributor's Aggregate
                                                                                 Distributor's Aggregate             Unreimbursed
                                      Total Payments           Amount Retained     Unreimbursed Expenses         Expenses as % of
                                          Under Plan            by Distributor                Under Plan      Net Assets of Class
- ----------------------------------------------------------------------------------------------------------------------------------

 Class B Plan                                 $1,479                    $1,339                   $41,203                    21.29%
 Class C Plan                                  1,309                     1,025                    41,624                    26.67
 Class N Plan                                    251                       236                     5,037                     7.40


- --------------------------------------------------------------------------------
 5. Borrowing and Lending Arrangements
 Bank Borrowings. Until November 12, 2002, the Fund had the ability to borrow
 from a bank for temporary or emergency purposes provided asset coverage for
 borrowings exceeded 300%. The Fund and other Oppenheimer funds participated in
 a $400 million unsecured line of credit with a bank. Under that unsecured line
 of credit, interest was charged to each fund, based on its borrowings, at a
 rate equal to the Federal Funds Rate plus 0.45%. Under that credit facility,
 the Fund paid a commitment fee equal to its pro rata share of the average
 unutilized amount of the credit facility at a rate of 0.08% per annum.
- --------------------------------------------------------------------------------
 Interfund Borrowing and Lending Arrangements. Effective November 12, 2002, the
 following interfund borrowing and lending arrangements went into effect.
 Consistent with its fundamental policies and pursuant to an exemptive order
 issued by the Securities and Exchange Commission ("SEC"), the Fund may engage
 in borrowing and lending activities with other funds in the OppenheimerFunds
 complex. Borrowing money from affiliated funds may afford the Fund the
 flexibility to use the most cost-effective alternative to satisfy its borrowing
 requirements. Lending money to an affiliated fund may allow the Fund to obtain
 a higher rate of return than it could from interest rates on alternative
 short-term investments. Implementation of interfund lending will be
 accomplished consistent with applicable regulatory requirements, including the
 provisions of the SEC order. There is a risk that a borrowing fund could have a
 loan called on one day's notice. In that circumstance, the Fund might have to
 borrow from a bank at a higher interest cost if money to lend were not
 available from another Oppenheimer fund. When the Fund lends assets to another
 affiliated fund, the Fund is subject to the risk that the borrowing fund fails
 to repay the loan.
    The Fund had no borrowing or lending arrangements outstanding during the
year ended or at November 30, 2002.




INDEPENDENT AUDITORS' REPORT



- --------------------------------------------------------------------------------
 To the Board of Trustees and Shareholders of Oppenheimer Select Managers
 Mercury Advisors S&P 500 Index Fund: We have audited the accompanying statement
 of assets and liabilities of Oppenheimer Select Managers Mercury Advisors S&P
 500 Index Fund, which is a series of Oppenheimer Select Managers, including the
 statement of investments, as of December 31, 2002, and the related statement of
 operations for the year then ended, the statements of changes in net assets for
 and the financial highlights for the periods indicated. These financial
 statements and financial highlights are the responsibility of the Fund's
 management. Our responsibility is to express an opinion on these financial
 statements and financial highlights based on our audits.
    We conducted our audits in accordance with auditing standards generally
 accepted in the United States of America. Those standards require that we plan
 and perform the audit to obtain reasonable assurance about whether the
 financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence supporting
 the amounts and disclosures in the financial statements. Our procedures
 included confirmation of securities owned as of December 31, 2002, by
 correspondence with the custodian and brokers; where replies were not received
 from brokers, we performed other auditing procedures. An audit also includes
 assessing the accounting principles used and significant estimates made by
 management, as well as evaluating the overall financial statement presentation.
 We believe that our audits provide a reasonable basis for our opinion.
    In our opinion, the financial statements and financial highlights referred
 to above present fairly, in all material respects, the financial position of
 Oppenheimer Select Managers Mercury Advisors S&P 500 Index Fund as of December
 31, 2002, the results of its operations for the year then ended, the changes in
 its net assets and the financial highlights for the periods indicated, in
 conformity with accounting principles generally accepted in the United States
 of America.



 /s/ Deloitte & Touche LLP
- --------------------------
 Deloitte & Touche LLP

 Denver, Colorado
 February 19, 2003

26 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND

 


STATEMENT OF ASSETS AND LIABILITIES  December 31, 2002


- --------------------------------------------------------------------------------
 Assets

 Investments in Master S&P 500 Index Series                         $28,596,226
- --------------------------------------------------------------------------------
 Receivables and other assets:
 Shares of beneficial interest sold                                     101,971
 Other                                                                    1,701
                                                                    ------------
 Total assets                                                        28,699,898

- --------------------------------------------------------------------------------
 Liabilities

 Payables and other liabilities:
 Shares of beneficial interest redeemed                                  22,539
 Registration and filing fees                                            19,260
 Transfer and shareholder servicing agent fees                           16,879
 Distribution and service plan fees                                      16,307
 Legal, auditing and other professional fees                              3,198
 Trustees' compensation                                                     222
 Shareholder reports                                                         77
 Other                                                                   70,965
                                                                    ------------
 Total liabilities                                                      149,447

- --------------------------------------------------------------------------------
 Net Assets                                                         $28,550,451
                                                                    ============

- --------------------------------------------------------------------------------
 Composition of Net Assets

 Paid-in capital                                                    $34,322,883
- --------------------------------------------------------------------------------
 Accumulated net realized loss on investment transactions            (1,194,777)
- --------------------------------------------------------------------------------
 Net unrealized depreciation on investments                          (4,577,655)
                                                                    ------------
 Net Assets                                                         $28,550,451
                                                                    ============




12 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 




- --------------------------------------------------------------------------------
 Net Asset Value Per Share

 Class A Shares:
 Net asset value and redemption price per share
 (based on net assets of $6,334,062 and 935,227 shares
 of beneficial interest outstanding)                                       $6.77
 Maximum offering price per share (net asset value plus sales
 charge of 5.75% of offering price)                                        $7.18
- --------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $4,183,602
 and 623,688  shares of beneficial interest outstanding)                   $6.71
- --------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $4,952,056
 and 738,703
 shares of beneficial interest outstanding)                                $6.70
- --------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent deferred
 sales charge) and offering price per share (based on net assets of $13,079,891
 and 1,940,897 shares of beneficial interest outstanding) $6.74
- --------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share
 (based on net assets of $840 and 123 shares of beneficial
 interest outstanding)                                                     $6.83



 See accompanying Notes to Financial Statements.




13 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



STATEMENT OF OPERATIONS  For the Year Ended December 31, 2002




- ----------------------------------------------------------------------------------------------------------------------
 Net Investment Income Allocated from Master S&P 500 Index Series


 Investment Income                                                                                      $   365,180
- ----------------------------------------------------------------------------------------------------------------------
 Expenses                                                                                                     8,629
- ----------------------------------------------------------------------------------------------------------------------
 Net investment income from Master S&P 500 Index Series                                                     356,551

 Fund Income and Expenses
- ----------------------------------------------------------------------------------------------------------------------
 Investment Income
 Interest from short-term obligations                                                                            28

- ----------------------------------------------------------------------------------------------------------------------
 Expenses
 Distribution and service plan fees:
 Class A                                                                                                     12,489
 Class B                                                                                                     29,212
 Class C                                                                                                     35,829
 Class N                                                                                                     49,775
- ----------------------------------------------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                                                     34,893
 Class B                                                                                                     19,283
 Class C                                                                                                     20,717
 Class N                                                                                                     53,988
 Class Y                                                                                                        452
- ----------------------------------------------------------------------------------------------------------------------
 Administrative fees                                                                                        108,266
- ----------------------------------------------------------------------------------------------------------------------
 Registration and filing fees                                                                                17,746
- ----------------------------------------------------------------------------------------------------------------------
 Shareholder reports                                                                                         14,832
- ----------------------------------------------------------------------------------------------------------------------
 Legal, auditing and other professional fees                                                                  5,362
- ----------------------------------------------------------------------------------------------------------------------
 Trustees' compensation                                                                                       4,312
- ----------------------------------------------------------------------------------------------------------------------
 Custodian fees and expenses                                                                                      5
- ----------------------------------------------------------------------------------------------------------------------
 Other                                                                                                       84,265
                                                                                                     -----------------
 Total expenses                                                                                             491,426
 Less voluntary reimbursement of expenses                                                                  (156,115)
 Less voluntary waiver of transfer and shareholder servicing agent fees--
 Classes A, B, C and N                                                                                      (41,755)
 Less voluntary waiver of transfer and shareholder servicing agent fees--Class Y                               (446)
                                                                                                     -----------------
 Net expenses                                                                                               293,110

- ----------------------------------------------------------------------------------------------------------------------
 Net Investment Income                                                                                       63,469

- ----------------------------------------------------------------------------------------------------------------------
 Realized and Unrealized Loss Allocated from Master S&P 500 Index Series
 Net realized loss on investments                                                                          (929,632)
- ----------------------------------------------------------------------------------------------------------------------
 Net change in unrealized depreciation on investments                                                    (4,893,113)
                                                                                                     -----------------
 Net realized and unrealized loss                                                                        (5,822,745)

- ----------------------------------------------------------------------------------------------------------------------
 Net Decrease in Net Assets Resulting from Operations                                                   $(5,759,276)
                                                                                                     =================





 See accompanying Notes to Financial Statements.


14 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



STATEMENTS OF CHANGES IN NET ASSETS



 Year Ended December 31,                                                           2002                 2001 1
- ---------------------------------------------------------------------------------------------------------------

 Operations
 Net investment income                                                      $    63,469          $     1,533
- ---------------------------------------------------------------------------------------------------------------
 Net realized loss                                                             (929,632)            (265,145)
- ---------------------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation)                        (4,893,113)             315,458
                                                                            -----------------------------------
 Net increase (decrease) in net assets resulting from operations             (5,759,276)              51,846

- ---------------------------------------------------------------------------------------------------------------
 Dividends and/or Distributions to Shareholders Dividends from net investment
 income:
 Class A                                                                        (23,993)                  --
 Class B                                                                             --                   --
 Class C                                                                             --                   --
 Class N                                                                        (43,513)                  --
 Class Y                                                                             (2)                  --

- ---------------------------------------------------------------------------------------------------------------
 Beneficial Interest Transactions
 Net increase (decrease) in net assets resulting from beneficial interest
 transactions:
 Class A                                                                      4,148,608            3,648,728
 Class B                                                                      3,813,804            1,206,748
 Class C                                                                      4,395,652            1,551,116
 Class N                                                                     10,658,816            4,884,686
 Class Y                                                                            (12)                 243

- ---------------------------------------------------------------------------------------------------------------
 Net Assets
 Total increase                                                              17,190,084           11,343,367
- ---------------------------------------------------------------------------------------------------------------
 Beginning of period                                                         11,360,367               17,000 2
                                                                            -----------------------------------
End of period [including accumulated net investment income of $1,533
 for the period ended December 31, 2001]                                    $28,550,451          $11,360,367
                                                                            ===================================




1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Reflects the value of the Manager's initial seed money investment at
December 22, 2000.

See accompanying Notes to Financial Statements.


15 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



FINANCIAL HIGHLIGHTS



 Class A     Year Ended December 31                                                            2002             2001 1
- -------------------------------------------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                                                       $  8.85             $10.00
- -------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                                          .03                .01
 Net realized and unrealized loss                                                             (2.08)             (1.16)
                                                                                            -----------------------------
 Total from investment operations                                                             (2.05)             (1.15)
- -------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                          (.03)                --
                                                                                            -----------------------------
 Net asset value, end of period                                                               $6.77              $8.85
                                                                                            =============================

- -------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                          (23.21)%           (11.50)%

- -------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                    $6,334             $3,598
- -------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                           $5,202             $1,397
- -------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                                                         0.62%              0.33%
 Expenses                                                                                      2.03%              1.87%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                       1.08%              0.99%
- -------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                     4.59%              3.21%




1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.


16 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 





 Class B     Year Ended December 31                                                          2002              2001 1

- ----------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                                      $ 8.80            $10.00
- ----------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                                                           --              (.01)
 Net realized and unrealized loss                                                           (2.09)            (1.19)
                                                                                         -----------------------------
 Total from investment operations                                                           (2.09)            (1.20)
- ----------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                          --                --
                                                                                         -----------------------------
 Net asset value, end of period                                                             $6.71             $8.80
                                                                                         =============================

- ----------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                        (23.75)%          (12.00)%

- ----------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                  $4,184            $1,189
- ----------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                         $2,929             $ 468
- ----------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                                                        (0.10)%           (0.40)%
 Expenses                                                                                    2.78%             2.65%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                     1.83%             1.68%
- ----------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                   4.59%             3.21%




1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.

17 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



FINANCIAL HIGHLIGHTS  Continued



 Class C     Year Ended December 31                                                         2002            2001 1
- -------------------------------------------------------------------------------------------------------------------
 Per Share Operating Data

 Net asset value, beginning of period                                                     $ 8.79          $10.00
- -------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                                                          --            (.01)
 Net realized and unrealized loss                                                          (2.09)          (1.20)
                                                                                        ---------------------------
 Total from investment operations                                                          (2.09)          (1.21)
- -------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                         --              --
                                                                                        ---------------------------
 Net asset value, end of period                                                            $6.70          $ 8.79
                                                                                        ===========================

- -------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                       (23.78)%        (12.10)%

- -------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                 $4,952          $1,558
- -------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                        $3,592          $  500
- -------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                                                       (0.10)%         (0.39)%
 Expenses                                                                                   2.70%           2.64%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                    1.80%           1.76%
- -------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                  4.59%           3.21%




1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.


18 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 





 Class N     Year Ended December 31                                                       2002              2001 1
- -------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                                   $ 8.82            $ 9.54
- -------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                                     .02                --
 Net realized and unrealized loss                                                        (2.08)             (.72)
                                                                                    -------------------------------
 Total from investment operations                                                        (2.06)             (.72)
- -------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                     (.02)               --
                                                                                    -------------------------------
 Net asset value, end of period                                                          $6.74             $8.82
                                                                                    ===============================

- -------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                     (23.33)%           (7.55)%

- -------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                              $13,080            $5,014
- -------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                     $ 9,977            $1,425
- -------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                                                    0.38%             0.07%
 Expenses                                                                                 2.16%             2.14%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                  1.29%             1.40%
- -------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                4.59%             3.21%




1. For the period from March 1, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.

19 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



FINANCIAL HIGHLIGHTS  Continued



 Class Y     Year Ended  December 31                                                        2002               2001 1
- ----------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                                     $ 8.90             $10.00
- ----------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income                                                                       .07                .04
 Net realized and unrealized loss                                                          (2.12)             (1.14)
                                                                                        ------------------------------
 Total from investment operations                                                          (2.05)             (1.10)
- ----------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Dividends from net investment income                                                       (.02)                --
                                                                                        ------------------------------
 Net asset value, end of period                                                            $6.83              $8.90
                                                                                        ==============================

- ----------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                                                       (23.06)%           (11.00)%

- ----------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                                                     $1                 $1
- ----------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                                                            $1                 $1
- ----------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income                                                                      0.80%              0.57%
 Expenses                                                                                  46.32%            384.04%
 Expenses, net of voluntary reimbursement of expenses and/or
 voluntary waiver of transfer agent fees                                                    0.83%              0.62%
- ----------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate 4                                                                  4.59%              3.21%




1. For the period from February 16, 2001 (inception of offering) to December 31,
2001. 2. Assumes an investment on the business day before the first day of the
fiscal period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at the
net asset value calculated on the last business day of the fiscal period. Sales
charges are not reflected in the total returns. Total returns are not annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Portfolio turnover rate is representative of the portfolio turnover rate of
the Master S&P 500 Index Fund included elsewhere in this report.

See accompanying Notes to Financial Statements.

20 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



NOTES TO FINANCIAL STATEMENTS



- --------------------------------------------------------------------------------
 1. Significant Accounting Policies
 Oppenheimer Select Managers Mercury S&P 500(R) Index Fund (the Fund) is a
 separate series of Oppenheimer Select Managers, a non-diversified, open-end
 management investment company registered under the Investment Company Act of
 1940, as amended. The Fund invests substantially all of its assets in the
 Master S&P 500 Index Series of the Quantitative Master Series Trust (the
 Trust), a registered open-end investment company that has the same goals as the
 Fund. The financial statements of the Trust are included elsewhere in this
 report and should be read with the Fund's financial statements. The percentage
 of the Trust owned by the Fund at December 31, 2002 was 1.67%. As of December
 31, 2002 the total return for the Master S&P 500 Index Fund was (22.22)%. The
 Fund's investment objective is to seek to match the performance of the Standard
 & Poor's 500 Composite Stock Price Index (the "S&P 500") as closely as possible
 before the deduction of Fund expenses. The Fund's administrator is
 OppenheimerFunds, Inc. (the Manager).
    The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class
 A shares are sold at their offering price, which is normally net asset value
 plus a front-end sales charge. Class B, Class C and Class N shares are sold
 without a front-end sales charge but may be subject to a contingent deferred
 sales charge (CDSC). Class N shares are sold only through retirement plans.
 Retirement plans that offer Class N shares may impose charges on those
 accounts. Class Y shares are sold to certain institutional investors without
 either a front-end sales charge or a CDSC. All classes of shares have identical
 rights and voting privileges. Earnings, net assets and net asset value per
 share may differ by minor amounts due to each class having its own expenses
 directly attributable to that class. Classes A, B, C and N have separate
 distribution and/or service plans. No such plan has been adopted for Class Y
 shares. Class B shares will automatically convert to Class A shares six years
 after the date of purchase.
    The following is a summary of significant accounting policies consistently
followed by the Fund.

- --------------------------------------------------------------------------------
 Securities Valuation. The Fund's investment in the Trust is valued based on the
 daily reported net asset value of the Trust. Valuation of securities held by
 the Trust is discussed in the notes to Master S&P 500 Index Series included
 elsewhere in this report.
- --------------------------------------------------------------------------------
 Allocation of Income, Expenses, Gains and Losses. The Fund records daily its
 proportionate share of the Trust's income, expenses and realized and unrealized
 gains and losses. In addition, the Fund accrues its own expenses. Income,
 expenses (other than those attributable to a specific class), gains and losses
 are allocated daily to each class of shares based upon the relative proportion
 of net assets represented by such class. Operating expenses directly
 attributable to a specific class are charged against the operations of that
 class.
- --------------------------------------------------------------------------------
 Federal Taxes. The Fund intends to continue to comply with provisions of the
 Internal Revenue Code applicable to regulated investment companies and to
 distribute all of its taxable income, including any net realized gain on
 investments not offset by capital loss carryforwards, if any, to shareholders.
 Therefore, no federal income tax provision is required, however, during the
 year ended December 31, 2002, the Fund paid a federal excise tax of $60.

 As of December 31, 2002, the Fund had available for federal income tax purposes
 unused capital loss carryforwards as follows:
                              Expiring
                              --------------------------
                              2009           $  200,753
                              2010              853,501
                                             ----------
                                             $1,054,254
                                             ==========

    During the fiscal year ended December 31, 2002, the Fund did not utilize any
 capital loss carryforward.


21 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



NOTES TO FINANCIAL STATEMENTS  Continued



- --------------------------------------------------------------------------------
 1. Significant Accounting Policies Continued
 Dividends and Distributions to Shareholders. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
 Classification of Dividends and Distributions to Shareholders. Net investment
 income (loss) and net realized gain (loss) may differ for financial statement
 and tax purposes. The character of dividends and distributions made during the
 fiscal year from net investment income or net realized gains may differ from
 their ultimate characterization for federal income tax purposes. Also, due to
 timing of dividends and distributions, the fiscal year in which amounts are
 distributed may differ from the fiscal year in which the income or net realized
 gain was recorded by the Fund.
    The Fund adjusts the classification of distributions to shareholders to
 reflect the differences between financial statement amounts and distributions
 determined in accordance with income tax regulations. Accordingly, during the
 year ended December 31, 2002, amounts have been reclassified to reflect a
 decrease in paid-in capital of $2,506. Overdistributed net investment income
 was decreased by the same amount. Net assets of the Fund were unaffected by the
 reclassifications.

 The tax character of distributions paid during the year ended December 31, 2002
 and the period ended December 31, 2001 was as follows:
                                            Year Ended             Period Ended
                                     December 31, 2002        December 31, 2001
     ---------------------------------------------------------------------------
     Distributions paid from:
     Ordinary income                           $67,508                      $--
     Long-term capital gain                         --                       --
     Return of capital                              --                       --
                                               ---------------------------------
     Total                                     $67,508                      $--
                                               =================================

 As of December 31, 2002, the components of distributable earnings on a tax
 basis were as follows:
     Accumulated net realized loss                        $(1,194,777)
     Net unrealized depreciation                           (4,577,655)
                                                          -----------
     Total                                                $(5,772,432)
                                                          ===========

- --------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial statements and the reported amounts of income and
 expenses during the reporting period. Actual results could differ from those
 estimates.



22 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 





- --------------------------------------------------------------------------------
 2. Shares of Beneficial Interest
 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:



                                                         Year Ended December 31, 2002    Period Ended December 31, 2001 1
                                                            Shares             Amount            Shares          Amount
- --------------------------------------------------------------------------------------------------------------------------

 Class A
 Sold                                                      780,715        $ 6,024,191           508,428      $4,545,635
 Dividends and/or distributions reinvested                   3,389             23,559                --              --
 Redeemed                                                 (255,444)        (1,899,142)         (103,261)       (896,907)
                                                      --------------------------------------------------------------------
 Net increase                                              528,660        $ 4,148,608           405,167      $3,648,728
                                                      ====================================================================

- --------------------------------------------------------------------------------------------------------------------------
 Class B
 Sold                                                      616,148        $ 4,695,369           139,646      $1,247,649
 Dividends and/or distributions reinvested                      --                 --                --              --
 Redeemed                                                 (127,633)          (881,565)           (4,573)        (40,901)
                                                      --------------------------------------------------------------------
 Net increase                                              488,515        $ 3,813,804           135,073      $1,206,748
                                                      ====================================================================

- --------------------------------------------------------------------------------------------------------------------------
 Class C
 Sold                                                      746,146        $ 5,682,782           196,810      $1,722,460
 Dividends and/or distributions reinvested                      --                 --                --              --
 Redeemed                                                 (184,645)        (1,287,130)          (19,708)       (171,344)
                                                      --------------------------------------------------------------------
 Net increase                                              561,501        $ 4,395,652           177,102      $1,551,116
                                                      ====================================================================

- --------------------------------------------------------------------------------------------------------------------------
 Class N
 Sold                                                    1,916,160        $14,688,292           633,876      $5,457,358
 Dividends and/or distributions reinvested                   6,101             42,162                --              --
 Redeemed                                                 (549,800)        (4,071,638)          (65,440)       (572,672)
                                                      --------------------------------------------------------------------
 Net increase                                            1,372,461        $10,658,816           568,436      $4,884,686
                                                      ====================================================================

- --------------------------------------------------------------------------------------------------------------------------
 Class Y
 Sold                                                           --        $        --                27      $      258
 Dividends and/or distributions reinvested                      --                 --                --              --
 Redeemed                                                       (2)               (12)               (2)            (15)
                                                      --------------------------------------------------------------------
 Net increase (decrease)                                        (2)       $       (12)               25      $      243
                                                      ====================================================================


 1. For the period from February 16, 2001 (inception of offering) to December
 31, 2001, for Class A, B, C and Y shares and for the period from March 1, 2001
 (inception of offering) to December 31, 2001, for Class N shares.


- --------------------------------------------------------------------------------
 3. Increases and Decreases of Investments in the Trust Increases and decreases
 in the Fund's investment in the Trust for the year ended December 31, 2002,
 were $41,113,812 and $24,007,760, respectively.

- --------------------------------------------------------------------------------
 4. Fees and Other Transactions with Affiliates
 Administration Fees. Administration fees paid to the Manager were in accordance
 with the administration agreement with the Fund which provides for a fee of
 0.50% of the average annual net assets of the Fund. During the year ended
 December 31, 2002, the Fund paid $108,266 to the Manager for administration
 services.

- --------------------------------------------------------------------------------
 Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
 Manager, acts as the transfer and shareholder servicing agent for the Fund. The
 Fund pays OFS a $19.75 per account fee.


23 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 



NOTES TO FINANCIAL STATEMENTS  Continued



- --------------------------------------------------------------------------------
 4. Fees and Other Transactions with Affiliates Continued Additionally, Class Y
    shares are subject to minimum fees of $5,000 for
 assets of less than $10 million and $10,000 for assets of $10 million or more.
 The Class Y shares are subject to the minimum fees in the event that the per
 account fee does not equal or exceed the applicable minimum fees. OFS may
 voluntarily waive the minimum fees.
    OFS has voluntarily agreed to limit transfer and shareholder servicing agent
 fees up to an annual rate of 0.35% of average annual net assets for all
 classes. This undertaking may be amended or withdrawn at any time.

- --------------------------------------------------------------------------------
 Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
 Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
 Distributor) acts as the Fund's principal underwriter in the continuous public
 offering of the different classes of shares of the Fund.

 The compensation paid to (or retained by) the Distributor from the sale of
 shares or on the redemption of shares is shown in the table below for the
 period indicated.



                                  Aggregate          Class A       Concessions       Concessions      Concessions       Concessions
                                  Front-End        Front-End        on Class A        on Class B       on Class C        on Class N
                              Sales Charges    Sales Charges            Shares            Shares           Shares            Shares
                                 on Class A      Retained by       Advanced by       Advanced by      Advanced by       Advanced by
 Year Ended                          Shares      Distributor     Distributor 1     Distributor 1    Distributor 1     Distributor 1
- -----------------------------------------------------------------------------------------------------------------------------------

 December 31, 2002                  $71,413          $23,220           $11,364          $130,765          $48,663          $130,233


1. The Distributor advances concession payments to dealers for certain sales of
Class A shares and for sales of Class B, Class C and Class N shares from its own
resources at the time of sale.



                                             Class A                   Class B                   Class C                    Class D
                                 Contingent Deferred       Contingent Deferred       Contingent Deferred        Contingent Deferred
                                       Sales Charges             Sales Charges             Sales Charges              Sales Charges
                                         Retained by               Retained by               Retained by                Retained by
 Year Ended                              Distributor               Distributor               Distributor                Distributor
- ------------------------------------------------------------------------------------------------------------------------------------

 December 31, 2002                                $--                   $4,358                    $2,608                    $27,006



- --------------------------------------------------------------------------------
 Service Plan for Class A Shares. The Fund has adopted a Service Plan for Class
 A Shares. It reimburses the Distributor for a portion of its costs incurred for
 services provided to accounts that hold Class A shares. Reimbursement is made
 quarterly at an annual rate of up to 0.25% of the average annual net assets of
 Class A shares of the Fund. For the year ended December 31, 2002, payments
 under the Class A Plan totaled $12,489, all of which were paid by the
 Distributor to recipients, and included $540 paid to an affiliate of the
 Manager. Any unreimbursed expenses the Distributor incurs with respect to Class
 A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
 Distribution and Service Plans for Class B, Class C and Class N Shares. The
 Fund has adopted Distribution and Service Plans for Class B, Class C and Class
 N shares. Under the plans, the Fund pays the Distributor an annual asset-based
 sales charge of 0.75% per year on Class B shares and on Class C shares and the
 Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
 on Class N shares. The Distributor also receives a service fee of 0.25% per
 year under each plan.

 Distribution fees paid to the Distributor for the year ended December 31, 2002,
 were as follows:



                                                                                                                      Distributor's
                                                                                           Distributor's                  Aggregate
                                                                        Amount                 Aggregate               Unreimbursed
                                      Total Payments               Retained by              Unreimbursed           Expenses as % of
                                          Under Plan               Distributor       Expenses Under Plan        Net Assets of Class
- ------------------------------------------------------------------------------------------------------------------------------------

 Class B Plan                                $29,212                   $26,902                  $181,893                       4.35%
 Class C Plan                                 35,829                    30,578                   106,844                       2.16
 Class N Plan                                 49,775                    48,189                   392,192                       3.00


24 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND
 





- --------------------------------------------------------------------------------
 5. Bank Borrowings
 The Fund had the ability to borrow from a bank for temporary or emergency
 purposes provided asset coverage for borrowings exceeded 300%. The Fund and
 other Oppenheimer funds participated in a $400 million unsecured line of credit
 with a bank. Under that unsecured line of credit, interest was charged to each
 fund, based on its borrowings, at a rate equal to the Federal Funds Rate plus
 0.45%. Under that credit facility, the Fund paid a commitment fee equal to its
 pro rata share of the average unutilized amount of the credit facility at a
 rate of 0.08% per annum. The credit facility was terminated on November 12,
 2002.

25 | OPPENHEIMER SELECT MANAGERS MERCURY ADVISORS S&P 500(R) INDEX FUND



Financial Statements for the Master S&P 500 Index Series


                                                               December 31, 2002

SCHEDULE OF INVESTMENTS                                        (in U.S. dollars)



                  Master S&P 500 Index Series
                  ------------------------------------------------------------------------------
                                                                          Shares
                  Issue                                                   Held           Value
================================================================================================

Common            3M Co. .....................................           82,794      $10,208,500
Stocks            ACE Limited ................................           57,710        1,693,211
                + ADC Telecommunications, Inc. ...............          152,555          318,840
                + The AES Corporation ........................          109,860          331,777
                  AFLAC Incorporated .........................          102,599        3,090,282
                  ALLTEL Corporation .........................           60,037        3,061,887
                + AMR Corporation ............................           31,905          210,573
                + AOL Time Warner Inc. .......................          929,484       12,176,240
                  AT&T Corp. .................................          154,092        4,023,342
                + AT&T Wireless Services Inc. ................          543,247        3,069,346
                  Abbott Laboratories ........................          325,517       13,020,680
                  Adobe Systems Incorporated .................           52,225        1,300,925
                  Adolph Coors Company (Class B) .............           10,483          642,084
                + Advanced Micro Devices, Inc. ...............           70,047          452,504
                  Aetna Inc. (New Shares) ....................           30,092        1,237,383
                + Agilent Technologies, Inc. .................           95,610        1,717,156
                  Air Products and Chemicals, Inc. ...........           46,947        2,006,984
                  Alberto-Culver Company (Class B) ...........           10,028          505,411
                  Albertson's, Inc. ..........................           84,366        1,877,987
                  Alcoa Inc. .................................          172,145        3,921,463
                  Allegheny Energy, Inc. .....................           31,520          238,291
                  Allegheny Technologies Incorporated ........           14,228           88,640
                  Allergan Inc. ..............................           29,364        1,691,954
                + Allied Waste Industries, Inc. ..............           40,578          405,780
                  The Allstate Corporation ...................          146,944        5,435,459
                + Altera Corporation .........................           85,790        1,058,649
                  Ambac Financial Group, Inc. ................           21,766        1,224,120
                  Amerada Hess Corporation ...................           20,467        1,126,708
                  Ameren Corporation .........................           28,381        1,179,798
                  American Electric Power Company, Inc. ......           76,920        2,102,224
                  American Express Company ...................          276,884        9,787,849
                + American Greetings Corporation
                    (Class A) ................................           13,116          207,233
                  American International Group, Inc. .........          543,907       31,465,020
                + American Power Conversion
                    Corporation ..............................           36,644          555,157
                + American Standard Companies, Inc. ..........           13,900          988,846
                  AmerisourceBergen Corporation ..............           24,943        1,354,654
                + Amgen Inc. .................................          266,247       12,870,380
                  AmSouth Bancorporation .....................           75,103        1,441,978
                  Anadarko Petroleum Corporation .............           49,061        2,350,022
                + Analog Devices, Inc. .......................           73,016        1,742,892
                + Andrew Corporation .........................           20,239          208,057
                  Anheuser-Busch Companies, Inc. .............          180,885        8,754,834
                + Anthem, Inc. ...............................           26,980        1,697,042
                  Aon Corporation ............................           57,385        1,084,003
                  Apache Corporation .........................           33,492        1,908,709
                + Apollo Group, Inc. (Class A) ...............           37,800        1,663,200
                + Apple Computer, Inc. .......................           78,617        1,126,582
                  Applera Corporation--Applied
                    Biosystems Group .........................           40,455          709,581
                + Applied Materials, Inc. ....................          335,476        4,371,252
                + Applied Micro Circuits Corporation .........           61,667          227,551
                  Archer-Daniels-Midland Company .............          134,934        1,673,182
                  Ashland Inc. ...............................           13,158          375,398
                  Autodesk, Inc. .............................           30,564          437,065
                  Automatic Data Processing, Inc. ............          120,680        4,736,690
                + AutoZone, Inc. .............................           22,777        1,609,195
                + Avaya Inc. .................................           55,782          136,666
                  Avery Dennison Corporation .................           22,658        1,383,951
                  Avon Products, Inc. ........................           48,680        2,622,392
                  The B.F. Goodrich Company ..................           20,987          384,482
                  BB&T Corporation ...........................       95,900        3,547,341
                + BJ Services Company ........................           34,600        1,117,926
                + BMC Software, Inc. .........................           46,520          795,957
                  Baker Hughes Incorporated ..................           64,944        2,090,547
                  Ball Corporation ...........................           11,280          577,423
                  Bank of America Corporation ................          315,813       21,971,110
                  The Bank of New York Company, Inc. .........          154,195        3,694,512
                  Bank One Corporation .......................          244,489        8,936,073
                  Bausch & Lomb Incorporated .................       14,987          539,532
                  Baxter International Inc. ..................          130,127        3,643,556
                  The Bear Stearns Companies Inc. ............           22,611        1,343,093
                  Becton, Dickinson and Company ..............           51,895        1,592,658
                + Bed Bath & Beyond Inc. .....................       64,824        2,238,373
                  BellSouth Corporation ......................          387,134       10,015,157
                  Bemis Company, Inc. ........................            9,868          489,749
                + Best Buy Co., Inc. .........................           71,046        1,715,761
                + Big Lots, Inc. .............................           23,595          312,162
                + Biogen, Inc. ...............................           33,666        1,348,660
                  Biomet, Inc. ...............................           58,235        1,669,015
                  The Black & Decker Corporation .............       19,642          842,445
                  The Boeing Company .........................          180,120        5,942,159
                  Boise Cascade Corporation ..................           11,024          278,025
                + Boston Scientific Corporation ..............           83,082        3,532,647
                  Bristol-Myers Squibb Company ...............          403,561        9,342,437
                + Broadcom Corporation (Class A) .............           60,881          916,868
                  Brown-Forman Corporation (Class B) .........           14,044          917,916
                  Brunswick Corporation ......................           17,764          352,793
                  Burlington Northern Santa Fe Corp. .........           79,194        2,059,836
                  Burlington Resources Inc. ..................           41,418        1,766,478
                  C.R. Bard, Inc. ............................           10,509          609,522
                + CIENA Corporation ..........................           92,895          477,480
                  CIGNA Corporation ..........................           30,796        1,266,332
                  CMS Energy Corporation .....................           41,914          395,668
                  CSX Corporation ............................           42,578        1,205,383
                  CVS Corporation ............................           80,218        2,003,043
                + Calpine Corporation ........................           76,560          249,586
                  Campbell Soup Company ......................           77,035        1,808,011
                  Capital One Financial Corporation ..........           43,867        1,303,727
                  Cardinal Health, Inc. ......................           93,791        5,551,489
                  Carnival Corporation .......................          118,180        2,948,591
                  Caterpillar Inc. ...........................           75,944        3,472,160
                + Cendant Corporation ........................          209,125        2,191,630
                  CenterPoint Energy, Inc. ...................           68,070          578,595
                  Centex Corporation .........................           15,234          764,747
                  CenturyTel, Inc. ...........................           25,977          763,204
                  The Charles Schwab Corporation .............          268,868        2,917,218
                  Charter One Financial, Inc. ................           45,995        1,321,436
                  ChevronTexaco Corporation ..................          225,450       14,987,916
                + Chiron Corporation .........................           42,334        1,591,758
                  The Chubb Corporation ......................           37,753        1,970,707
                  Cincinnati Financial Corporation ...........           29,511        1,108,138
                  Cinergy Corp. ..............................           31,828        1,073,240
                  Cintas Corporation .........................           35,002        1,601,342
                  Circuit City Stores--Circuit City Group ....           43,023          319,231
                + Cisco Systems, Inc. ........................        1,504,671       19,711,190
                  Citigroup Inc. .............................        1,070,236       37,661,605
                + Citizens Communications Company ............           50,618          534,020
                + Citrix Systems, Inc. .......................           38,705          476,846
                + Clear Channel Communications, Inc. .........          125,004        4,661,399
                  The Clorox Company .........................           52,298        2,157,292
                  The Coca-Cola Company ......................          517,128       22,660,549
                  Coca-Cola Enterprises Inc. .................           91,687        1,991,442
                  Colgate-Palmolive Company ..................          109,281        5,729,603
                + Comcast Corporation (Class A) ..............          326,544        7,696,642
                + Comcast Corporation (Special Class A) ......          151,805        3,429,275
                  Comerica Incorporated ......................           36,691        1,586,519
                  Computer Associates International, Inc. ....          119,012        1,606,662
                + Computer Sciences Corporation ..............           35,250        1,214,362
                + Compuware Corporation ......................           67,949          326,155
                + Comverse Technology, Inc. ..................           48,843          489,407
                  ConAgra, Inc. ..............................          102,478        2,562,975
                + Concord EFS, Inc. ..........................          104,939        1,651,740
                  ConocoPhillips .............................          138,889        6,720,839
                  Consolidated Edison, Inc. ..................           42,425        1,816,638
                  Constellation Energy Group .................           29,049          808,143
                + Convergys Corporation ......................           32,314          489,557
                  Cooper Industries, Ltd. (Class A) ..........           23,152          843,890
                  Cooper Tire & Rubber Company ...............           14,930          229,026
                + Corning Incorporated .......................          192,875          638,416
                + Costco Wholesale Corporation ...............          100,424        2,817,897
                  Countrywide Credit Industries, Inc. ........           28,478        1,470,889
                  Crane Co. ..................................           11,288          224,970
                  Cummins Engine Company, Inc. ...............           12,609          354,691
                  DTE Energy Company .........................           33,538        1,556,163
                  Dana Corporation ...........................           26,845          315,697
                  Danaher Corporation ........................           30,725        2,018,632
                  Darden Restaurants, Inc. ...................           41,707          852,908
                  Deere & Company ............................           53,298        2,443,713
                + Del Monte Foods Company ....................           11,316           87,133
                + Dell Computer Corporation ..................          540,516       14,453,398
                  Delphi Automotive Systems Corporation ......          110,625          890,531
                  Delta Air Lines, Inc. ......................           25,376          307,050
                  Deluxe Corporation .........................           13,636          574,076
                  Devon Energy Corporation ...................           28,758        1,319,992
                  Dillard's, Inc. (Class A) ..................           20,764          329,317
                  Dollar General Corporation .................           61,150          730,742
                  Dominion Resources, Inc. ...................           67,257        3,692,409
                  Dover Corporation ..........................           37,659        1,098,136
                  The Dow Chemical Company ...................          185,076        5,496,757
                  Dow Jones & Company, Inc. ..................           17,419          753,023
                  Duke Energy Corporation ....................          183,719        3,589,869
                  Dynegy Inc. (Class A) ......................           85,471          100,856
                  E.I. du Pont de Nemours and Company ........          206,973        8,775,655
                + EMC Corporation ............................          441,154        2,708,686
                  EOG Resources, Inc. ........................           22,670          904,986
                  Eastman Chemical Company ...................           15,750          579,127
                  Eastman Kodak Company ......................           66,153        2,318,001
                  Eaton Corporation ..........................           14,275        1,115,020
                + eBay Inc. ..................................           63,200        4,286,224
                  Ecolab Inc. ................................           25,507        1,262,596



                                      1 & 2


                                                               December 31, 2002

SCHEDULE OF INVESTMENTS (continued)                            (in U.S. dollars)



                  Master S&P 500 Index Series (continued)
                  ------------------------------------------------------------------------------
                                                                          Shares
                  Issue                                                   Held           Value
================================================================================================

Common          + Edison International .......................           57,899      $   686,103
Stocks            El Paso Corporation ........................          131,915          918,128
(continued)     + Electronic Arts Inc. .......................           30,900        1,537,893
                  Electronic Data Systems Corporation ........          106,487        1,962,555
                  Eli Lilly and Company ......................          236,977       15,048,040
                  Emerson Electric Co. .......................           87,248        4,436,561
                  Engelhard Corporation ......................           23,197          518,453
                  Entergy Corporation ........................           42,355        1,930,964
                  Equifax Inc. ...............................           25,402          587,802
                  Equity Office Properties Trust .............           80,064        1,999,999
                  Equity Residential Properties Trust ........           55,840        1,372,547
                  Exelon Corporation .........................           68,764        3,628,676
                  Exxon Mobil Corporation++ ..................        1,401,612       48,972,323
                  FPL Group, Inc. ............................           39,507        2,375,556
                  Family Dollar Stores, Inc. .................           30,664          957,023
                  Fannie Mae .................................          207,273       13,333,872
                + Federated Department Stores, Inc. ..........           38,267        1,100,559
                  FedEx Corp. ................................           58,608        3,177,726
                  Fifth Third Bancorp ........................          124,244        7,274,486
                  First Data Corporation .....................          157,240        5,567,868
                  First Tennessee National Corporation .......           31,400        1,128,516
                  FirstEnergy Corp. ..........................           61,316        2,021,588
                + Fiserv, Inc. ...............................           39,792        1,350,938
                  FleetBoston Financial Corporation ..........          211,047        5,128,442
                  Fluor Corporation ..........................           15,261          427,308
                  Ford Motor Company .........................          392,599        3,651,171
                + Forest Laboratories, Inc. ..................           38,882        3,818,990
                  Fortune Brands, Inc. .......................           29,415        1,368,092
                  Franklin Resources, Inc. ...................           49,786        1,696,707
                  Freddie Mac ................................          144,903        8,556,522
                + Freeport-McMoRan Copper & Gold,
                    Inc. (Class B) ...........................           36,034          604,650
                  Gannett Co., Inc. ..........................           56,779        4,076,732
                  The Gap, Inc. ..............................          179,293        2,782,627
                + Gateway Inc. ...............................           57,298          179,916
                  General Dynamics Corporation ...............           44,348        3,519,901
                  General Electric Company ...................        2,072,681       50,469,782
                  General Mills, Inc. ........................           80,860        3,796,377
                  General Motors Corporation .................          121,139        4,465,183
                  Genuine Parts Company ......................           33,914        1,044,551
                + Genzyme Corporation ........................           38,580        1,140,811
                  Georgia-Pacific Group ......................           47,367          765,451
                  The Gillette Company .......................          217,501        6,603,330
                  Golden West Financial Corporation ..........           32,948        2,365,996
                  The Goldman Sachs Group, Inc. ..............          100,500        6,844,050
                  The Goodyear Tire & Rubber Company .........           33,593          228,768
                  Great Lakes Chemical Corporation ...........           10,035          239,636
                + Guidant Corporation ........................           64,721        1,996,643
                  H & R Block, Inc. ..........................           41,985        1,687,797
                  H.J. Heinz Company .........................           72,136        2,371,110
                  HCA Inc. ...................................          112,706        4,677,299
                + HEALTHSOUTH Corporation ....................           73,725          309,645
                  Halliburton Company ........................           95,404        1,785,009
                  Harley-Davidson, Inc. ......................           66,759        3,084,266
                + Harrah's Entertainment, Inc. ...............           23,130          915,948
                  The Hartford Financial Services
                    Group, Inc. ..............................           55,325        2,513,415
                  Hasbro, Inc. ...............................           35,094          405,336
                  Health Management Associates, Inc. .........
                    (Class A) ................................           49,800          891,420
                + Hercules Incorporated ......................           22,359          196,759
                  Hershey Foods Corporation ..................           29,228        1,971,136
                  Hewlett-Packard Company ....................          639,417       11,100,279
                  Hilton Hotels Corporation ..................           74,931          952,373
                  The Home Depot, Inc. .......................          490,886       11,761,628
                  Honeywell International Inc. ...............          167,577        4,021,848
                  Household International, Inc. ..............           98,994        2,753,023
                + Humana Inc. ................................           30,104          301,040
                  Huntington Bancshares Incorporated .........           47,929          896,751
                  IMS Health Incorporated ....................           60,265          964,240
                  ITT Industries, Inc. .......................           15,596          946,521
                  Illinois Tool Works Inc. ...................           62,821        4,074,570
                  Ingersoll-Rand Company (Class A) ...........           35,798        1,541,462
                  Intel Corporation ..........................        1,388,131       21,613,200
                  International Business Machines
                    Corporation ..............................          352,967       27,354,942
                  International Flavors & Fragrances Inc. ....           19,496          684,310
                + International Game Technology ..............           19,530        1,482,718
                  International Paper Company ................           99,762        3,488,677
                  The Interpublic Group of
                    Companies, Inc. ..........................           77,786        1,095,227
                + Intuit Inc. ................................           46,352        2,174,836
                  J.C. Penney Company, Inc. ..................           60,698        1,396,661
                  J.P. Morgan Chase & Co. ....................          423,255       10,158,120
                + JDS Uniphase Corporation ...................          315,687          779,747
                + Jabil Circuit, Inc. ........................           37,464          671,355
                  Jefferson--Pilot Corporation ...............           29,736        1,133,239
                  John Hancock Financial Services, Inc. ......           61,242        1,708,652
                  Johnson & Johnson ..........................          619,777       33,288,223
                  Johnson Controls, Inc. .....................           16,110        1,291,539
                + Jones Apparel Group, Inc. ..................           25,860          916,478
                  KB HOME ....................................           13,611          583,231
                + KLA-Tencor Corporation .....................           42,337        1,497,460
                  Kellogg Company ............................           83,765        2,870,626
                  Kerr-McGee Corporation .....................           24,265        1,074,939
                  KeyCorp ....................................           79,810        2,006,423
                  KeySpan Corporation ........................           26,261          925,438
                  Kimberly-Clark Corporation .................          106,723        5,066,141
                  Kinder Morgan, Inc. ........................           26,934        1,138,500
                + King Pharmaceuticals, Inc. .................           46,355          796,842
                  Knight Ridder, Inc. ........................           14,151          895,051
                + Kohl's Corporation .........................           72,709        4,068,068
                + The Kroger Co. .............................          164,624        2,543,441
                + LSI Logic Corporation ......................           68,566          395,626
                  Leggett & Platt, Incorporated ..............           40,516          909,179
                  Lehman Brothers Holdings, Inc. .............           49,078        2,615,367
                + Lexmark International Group, Inc. ..........
                    (Class A) ................................           26,839        1,623,759
                  The Limited, Inc. ..........................           99,944        1,392,220
                  Lincoln National Corporation ...............           39,019        1,232,220
                  Linear Technology Corporation ..............           70,199        1,805,518
                  Liz Claiborne, Inc. ........................           19,838          588,197
                  Lockheed Martin Corporation ................           98,570        5,692,418
                  Loews Corporation ..........................           38,690        1,720,157
                + Louisiana-Pacific Corporation ..............           18,528          149,336
                  Lowe's Companies, Inc. .....................          158,740        5,952,750
                + Lucent Technologies Inc. ...................          666,158          839,359
                  MBIA, Inc. .................................           27,745        1,216,896
                  MBNA Corporation ...........................          263,272        5,007,433
                  MGIC Investment Corporation ................           22,080          911,904
                + Manor Care, Inc. ...........................           19,704          366,691
                  Marathon Oil Corporation ...................           58,447        1,244,337
                  Marriott International, Inc. (Class A) .....           53,927        1,772,580
                  Marsh & McLennan Companies, Inc. ...........          115,598        5,341,784
                  Marshall & Ilsley Corporation ..............           38,600        1,056,868
                  Masco Corporation ..........................           94,579        1,990,888
                  Mattel, Inc. ...............................           88,934        1,703,086
                  Maxim Integrated Products, Inc. ............           62,360        2,060,374
                  The May Department Stores Company ..........           60,428        1,388,635
                  Maytag Corporation .........................           15,803          450,386
                + McDermott International, Inc. ..............           11,755           51,487
                  McDonald's Corporation .....................          249,918        4,018,681
                  The McGraw-Hill Companies, Inc. ............           39,908        2,412,040
                  McKesson HBOC, Inc. ........................           59,284        1,602,447
                  MeadWestvaco Corporation ...................           35,372          874,042
                + MedImmune, Inc. ............................           51,052        1,387,083
                  Medtronic, Inc. ............................          252,740       11,524,944
                  Mellon Financial Corporation ...............           91,016        2,376,428
                  Merck & Co., Inc. ..........................          468,557       26,525,012
                + Mercury Interactive Corp. ..................           20,627          611,591
                  Meredith Corporation .......................            8,821          362,631
                  Merrill Lynch & Co., Inc.** ................          176,467        6,696,923
                  MetLife, Inc. ..............................          147,642        3,992,240
                + Micron Technology, Inc. ....................          121,768        1,186,020
                + Microsoft Corporation++ ....................        1,113,512       57,568,570
                + Millipore Corporation ......................            8,655          294,270
                + Mirant Corporation .........................           82,630          156,171
                  Molex Incorporated .........................           40,062          923,028
                  Monsanto Company ...........................           54,177        1,042,907
                  Moody's Corporation ........................           32,140        1,327,061
                  Morgan Stanley .............................          228,198        9,109,664
                  Motorola, Inc. .............................          463,069        4,005,547
                + NCR Corporation ............................           20,018          475,227
                  NICOR, Inc. ................................            8,054          274,078
                + NVIDIA Corporation .........................           33,520          385,815
                + Nabors Industries, Ltd. ....................           31,215        1,100,953
                  National City Corporation ..................          118,902        3,248,403
                  National Grid Group PLC (ADR) ..............                1               37
                + National Semiconductor Corporation .........           40,386          606,194
                + Navistar International Corporation .........           12,358          300,423
                + Network Appliance, Inc. ....................           76,821          768,210
                  The New York Times Company (Class A) .......           31,047        1,419,779
                  Newell Rubbermaid Inc. .....................           55,054        1,669,788
                  Newmont Mining Corporation .................           91,586        2,658,742
                + Nextel Communications, Inc. (Class A) ......          198,177        2,288,944
                  Nike, Inc. (Class B) .......................           55,210        2,455,189
                  NiSource Inc. ..............................           44,037          880,740
                + Noble Corporation ..........................           32,079        1,127,577
                  Nordstrom, Inc. ............................           27,036          512,873
                  Norfolk Southern Corporation ...............           71,742        1,434,123
                  North Fork Bancorporation ..................           34,300        1,157,282
                  Northern Trust Corporation .................           46,327        1,623,761
                  Northrop Grumman Corporation ...............           37,476        3,635,172
                + Novell, Inc. ...............................           63,824          213,172
                + Novellus Systems, Inc. .....................           33,500          940,680
                  Nucor Corporation ..........................           18,516          764,711



                                      3 & 4


                                                               December 31, 2002

SCHEDULE OF INVESTMENTS (continued)                            (in U.S. dollars)



                  Master S&P 500 Index Series (continued)
                  ------------------------------------------------------------------------------
                                                                          Shares
                  Issue                                                   Held           Value
================================================================================================

Common            Occidental Petroleum Corporation ...........           70,329      $ 2,000,860
Stocks          + Office Depot, Inc. .........................           63,258          933,688
(continued)       Omnicom Group Inc. .........................           41,097        2,654,866
                + Oracle Corporation .........................        1,114,685       12,038,598
                  PACCAR Inc. ................................           27,516        1,269,313
                + PG&E Corporation ...........................       73,377        1,019,940
                + PMC--Sierra, Inc. ..........................           43,454          241,604
                  PNC Bank Corp. .............................           61,668        2,583,889
                  PPG Industries, Inc. .......................           33,287        1,669,343
                  PPL Corporation ............................           26,892          932,615
                + Pactiv Corporation .........................           30,325          662,905
                  Pall Corporation ...........................           21,803          363,674
                + Parametric Technology Corporation ..........           46,865          118,100
                  Parker-Hannifin Corporation ................           23,288        1,074,275
                  Paychex, Inc. ..............................           77,258        2,155,498
                  Peoples Energy Corporation .................            7,304          282,300
                + PeopleSoft, Inc. ...........................           60,422        1,105,723
                  The Pepsi Bottling Group, Inc. .............           58,822        1,511,725
                  PepsiCo, Inc. ..............................          359,788       15,190,249
                  PerkinElmer, Inc. ..........................           25,284          208,593
                  Pfizer Inc. ................................        1,283,645       39,241,028
                  Pharmacia Corporation ......................          268,812       11,236,342
                + Phelps Dodge Corporation ...................           21,688          686,425
                  Philip Morris Companies Inc. ...............          436,018       17,671,810
                  Pinnacle West Capital Corporation ..........           17,432          594,257
                  Pitney Bowes Inc. ..........................           50,282        1,642,210
                  Plum Creek Timber Company Inc. .............           32,900          776,440
                + Power-One, Inc. ............................           13,968           79,199
                  Praxair, Inc. ..............................           36,823        2,127,265
                  The Principal Financial Group, Inc. ........           69,900        2,106,087
                  The Procter & Gamble Company ...............          270,798       23,272,380
                  Progress Energy, Inc. ......................           45,126        1,956,212
                + Progress Energy, Inc. ......................              900              117
                  The Progressive Corporation ................           45,340        2,250,224
                + Providian Financial Corporation ............           58,573          380,139
                  Prudential Financial, Inc. .................          112,800        3,580,272
                  Public Service Enterprise Group
                    Incorporated .............................           52,964        1,700,144
                  Pulte Corporation ..........................           12,393          593,253
                + QLogic Corporation .........................           22,008          759,496
                + QUALCOMM Incorporated ......................          164,680        5,992,705
                + Quest Diagnostics Incorporated .............           20,700        1,177,830
                + Quintiles Transnational Corp. ..............           23,586          285,391
                + Qwest Communications
                    International Inc. .......................          340,245        1,701,225
                  R.J. Reynolds Tobacco Holdings, Inc. .......           18,700          787,457
                  R.R. Donnelley & Sons Company ..............           21,625          470,776
                  RadioShack Corporation .....................           36,898          691,469
                + Rational Software Corporation ..............           40,430          420,068
                  Raytheon Company ...........................           78,474        2,413,076
                + Reebok International Ltd. ..................           12,187          358,298
                  Regions Financial Corporation ..............           41,158        1,373,031
                + Robert Half International Inc. .............           31,311          504,420
                  Rockwell Collins ...........................           32,415          753,973
                  Rockwell International Corporation .........           32,415          671,315
                  Rohm and Haas Company ......................           40,403        1,312,289
                  Rowan Companies, Inc. ......................           25,772          585,024
                  Ryder System, Inc. .........................           12,474          279,917
                  SAFECO Corporation .........................           34,122        1,183,010
                  SBC Communications Inc. ....................          692,605       18,776,522
                  SLM Corporation ............................           32,310        3,355,717
                  SUPERVALU Inc. .............................           24,142          398,584
                  SYSCO Corporation ..........................          141,900        4,227,201
                + Sabre Holdings Corporation .................           26,373          477,615
                + Safeway Inc. ...............................           93,458        2,183,179
                + St. Jude Medical, Inc. .....................           41,694        1,656,086
                  The St. Paul Companies, Inc. ...............           46,711        1,590,510
                + Sanmina Corporation ........................          107,763          483,856
                  Sara Lee Corporation .......................          161,841        3,643,041
                  Schering-Plough Corporation ................          298,825        6,633,915
                  Schlumberger Limited .......................          124,154        5,225,642
                  Scientific-Atlanta, Inc. ...................           38,194          452,981
                + Sealed Air Corporation .....................           16,269          606,834
                  Sears, Roebuck & Co. .......................           70,818        1,696,091
                  Sempra Energy ..............................           42,738        1,010,754
                  The Sherwin-Williams Company ...............           28,092          793,599
                + Siebel Systems, Inc. .......................           92,237          689,933
                  Sigma-Aldrich Corporation ..................           19,123          931,290
                  Simon Property Group, Inc. .................           37,100        1,263,997
                  Snap-On Incorporated .......................           11,352          319,105
                + Solectron Corporation ......................          156,912          557,038
                  The Southern Company .......................          155,323        4,409,620
                  SouthTrust Corporation .....................           63,644        1,581,553
                  Southwest Airlines Co. .....................          157,995        2,196,131
                + Sprint Corp. (PCS Group) ...................          203,339          890,625
                  Sprint Corporation .........................          182,881        2,648,117
                  The Stanley Works ..........................           17,543          606,637
                + Staples, Inc. ..............................           99,034        1,812,322
                + Starbucks Corporation ......................           87,912        1,791,647
                  Starwood Hotels & Resorts
                    Worldwide, Inc. ..........................           44,468        1,055,670
                  State Street Corporation ...................           69,623        2,715,297
                + Stilwell Financial, Inc. ...................           41,305          539,856
                  Stryker Corporation ........................           38,155        2,560,964
                + Sun Microsystems, Inc. .....................          705,156        2,193,035
                + Sungard Data Systems Inc. ..................           60,700        1,430,092
                  Sunoco, Inc. ...............................           21,185          702,918
                  SunTrust Banks, Inc. .......................           57,899        3,295,611
                  Symbol Technologies, Inc. ..................           47,111          387,252
                  Synovus Financial Corp. ....................           55,151        1,069,929
                  T. Rowe Price Group Inc. ...................           24,724          674,471
                  TECO Energy, Inc. ..........................           46,896          725,481
                  The TJX Companies, Inc. ....................          112,448        2,194,985
                + TMP Worldwide Inc. .........................           27,239          308,073
                  TXU Corp. ..................................           65,722        1,227,687
                  Target Corporation .........................          186,035        5,581,050
                + Tektronix, Inc. ............................           18,936          344,446
                + Tellabs, Inc. ..............................           84,487          614,220
                  Temple-Inland, Inc. ........................           12,553          562,500
                + Tenet Healthcare Corporation ...............          109,637        1,798,047
                + Teradyne, Inc. .............................           41,332          537,729
                  Texas Instruments Incorporated .............          352,972        5,298,110
                  Textron, Inc. ..............................           25,514        1,096,847
                + Thermo Electron Corporation ................           36,657          737,539
                + Thomas & Betts Corporation .................           11,967          202,242
                  Tiffany & Co. ..............................           29,901          714,933
                  Torchmark Corporation ......................           24,456          893,378
                + Toys `R' Us, Inc. ..........................           49,997          499,970
                  Transocean Inc. ............................           65,641        1,522,871
                + Travelers Property Casualty Corp. (Class B)           211,879        3,104,027
                  Tribune Company ............................           57,942        2,634,043
                  Tupperware Corporation .....................           11,933          179,950
                  Tyco International Ltd. ....................          409,525        6,994,687
                  U.S. Bancorp ...............................          398,565        8,457,549
                  UST Inc. ...................................           32,635        1,090,988
                  Union Pacific Corporation ..................           51,176        3,063,907
                  Union Planters Corporation .................           40,881        1,150,391
                + Unisys Corporation .........................           56,982          564,122
                  United Parcel Service, Inc. (Class B) ......          235,700       14,867,956
                  United States Steel Corporation ............           27,422          359,777
                  United Technologies Corporation ............          100,248        6,209,361
                  UnitedHealth Group Incorporated ............           64,809        5,411,552
                + Univision Communications Inc. (Class A) ....           47,171        1,155,690
                  Unocal Corporation .........................           47,374        1,448,697
                  UnumProvident Corporation ..................           48,067          843,095
                  V. F. Corporation ..........................           22,167          799,120
                + VERITAS Software Corporation ...............           90,981        1,421,123
                  Verizon Communications .....................          569,428       22,065,335
                + Viacom, Inc. (Class B) .....................          367,563       14,981,868
                  Visteon Corporation ........................           26,826          186,709
                  Vulcan Materials Company ...................           19,547          733,013
                  W. W. Grainger, Inc. .......................           18,245          940,530
                  Wachovia Corporation .......................          285,576       10,406,389
                  Wal-Mart Stores, Inc. ......................          919,355       46,436,621
                  Walgreen Co. ...............................          208,524        6,086,816
                  The Walt Disney Company ....................          425,347        6,937,410
                  Washington Mutual, Inc. ....................          196,198        6,774,717
                  Waste Management, Inc. .....................          129,414        2,966,169
                + Waters Corporation .........................           26,920          586,318
                + Watson Pharmaceuticals, Inc. ...............           20,381          576,171
                + WellPoint Health Networks Inc. .............           33,406        2,377,171
                  Wells Fargo Company ........................          353,822       16,583,637
                  Wendy's International, Inc. ................           22,572          611,024
                  Weyerhaeuser Company .......................           45,361        2,232,215
                  Whirlpool Corporation ......................           16,560          864,763
                  The Williams Companies, Inc. ...............          121,186          327,202



                                      5 & 6


                                                               December 31, 2002

SCHEDULE OF INVESTMENTS (concluded)                            (in U.S. dollars)



                  Master S&P 500 Index Series (concluded)
                  ------------------------------------------------------------------------------
                                                                          Shares
                  Issue                                                   Held           Value
================================================================================================

Common            Winn-Dixie Stores, Inc. ................             28,980      $     442,814
Stocks            Wm. Wrigley Jr. Company ................             46,470          2,550,274
(concluded)       Worthington Industries, Inc. ...........             17,567            267,721
                  Wyeth ..................................            276,099         10,326,103
                  XL Capital Ltd. (Class A) ..............             29,105          2,248,361
                  Xcel Energy, Inc. ......................             90,402            994,422
                + Xerox Corporation ......................            148,402          1,194,636
                + Xilinx, Inc. ...........................             74,993          1,544,856
                + YUM! Brands, Inc. ......................             60,034          1,454,023
                + Yahoo! Inc. ............................            119,699          1,957,079
                + Zimmer Holdings, Inc. ..................             39,977          1,659,845
                  Zions Bancorporation ...................             21,402            842,147
                  ------------------------------------------------------------------------------
                  Total Common Stocks (Cost--$2,015,763,982)--97.8%                1,688,331,230
- ------------------------------------------------------------------------------------------------

Partnership
 Interest                        Short-Term Investments
- ------------------------------------------------------------------------------------------------

$22,760,915       Merrill Lynch Liquidity Series, LLC Cash Sweep Series I**           22,760,915
- ------------------------------------------------------------------------------------------------
Total Short-Term Investments (Cost--$22,760,915)--1.3%                                22,760,915
- ------------------------------------------------------------------------------------------------
Total Investments (Cost--$2,038,524,897)--99.1%                                    1,711,092,145
Variation Margin on Financial Futures Contracts*--0.0%                                    44,666
Other Assets Less Liabilities--0.9%                                                   15,567,844
                                                                                  --------------
Net Assets--100.0%                                                                $1,726,704,655
                                                                                  ==============
- ------------------------------------------------------------------------------------------------


 +    Non-income producing security.
++    All or a portion of security held as collateral in connection with open
      financial futures contracts.
 *    Financial futures contracts purchased as of December 31, 2002 were as
      follows:

      --------------------------------------------------------------------------
      Number of                                 Expiration
      Contracts           Issue                    Date                 Value
      --------------------------------------------------------------------------
         164        S&P 500 Stock Index         March 2003           $36,034,900
      --------------------------------------------------------------------------
      Total Financial Futures Contracts Purchased
      (Total Contract Price--$36,461,218)                            $36,034,900
                                                                     ===========
      --------------------------------------------------------------------------

**    Investments in companies considered to be an affiliate of the Series (such
      companies are defined as "Affiliated Companies" in Section 2(a)(3) of the
      Investment Company Act of 1940) are as follows:

      --------------------------------------------------------------------------
                                     Net                       Dividend/Interest
      Affiliate                   Activity        Net Cost          Income
      --------------------------------------------------------------------------
      Merrill Lynch & Co.             27,570    $ 1,282,303    $   104,987
      Merrill Lynch Liquidity    $22,760,915     22,760,915         61,040
      Series, LLC Cash Sweep
      Series I
      --------------------------------------------------------------------------

      See Notes to Financial Statements.

STATEMENT OF ASSETS AND LIABILITIES



MASTER
S&P 500
INDEX SERIES    As of December 31, 2002
- ----------------------------------------------------------------------------------------------------------------------

Assets:         Investments, at value (including securities loaned of $535,314,383)
                (identified cost--$2,038,524,897) .................................                    $ 1,711,092,145
                Investments held as collateral for loaned securities, at value ....                        550,276,850
                Cash ..............................................................                             51,158
                Receivables:
                  Contributions ...................................................    $ 23,874,584
                  Dividends .......................................................       2,699,271
                  Variation margin ................................................          44,666
                  Interest ........................................................          31,245
                  Loaned securities income ........................................          16,676
                  Securities sold .................................................           7,895         26,674,337
                                                                                       ------------
                Prepaid expenses ..................................................                             20,048
                                                                                                       ---------------
                Total assets ......................................................                      2,288,114,538
                                                                                                       ---------------
- ----------------------------------------------------------------------------------------------------------------------
Liabilities:    Collateral on securities loaned, at value .........................                        550,276,850
                Payables:
                  Withdrawals .....................................................      10,981,579
                  Investment adviser ..............................................           7,708         10,989,287
                                                                                       ------------
                Accrued expenses ..................................................                            143,746
                                                                                                       ---------------
                Total liabilities .................................................                        561,409,883
                                                                                                       ---------------
- ----------------------------------------------------------------------------------------------------------------------
Net Assets:     Net assets ........................................................                    $ 1,726,704,655
                                                                                                       ===============
- ----------------------------------------------------------------------------------------------------------------------
Net Assets      Investors' capital ................................................                    $ 2,054,563,725
Consist of:     Unrealized depreciation on investments--net .......................                       (327,859,070)
                                                                                                       ---------------
                Net assets ........................................................                    $ 1,726,704,655
                                                                                                       ===============
- ----------------------------------------------------------------------------------------------------------------------


      See Notes to Financial Statements.


                                      7 & 8


                                                               December 31, 2002

STATEMENT OF OPERATIONS



MASTER
S&P 500
INDEX SERIES          For the Year Ended December 31, 2002
- -------------------------------------------------------------------------------------------------------------

Investment            Dividends (net of $78,432 foreign withholding tax) .                      $  29,349,446
Income:               Interest ...........................................                            834,621
                      Securities lending--net ............................                            267,064
                                                                                                -------------
                      Total income .......................................                         30,451,131
                                                                                                -------------
- -------------------------------------------------------------------------------------------------------------
Expenses:             Accounting services ................................    $     358,967
                      Professional fees ..................................          127,824
                      Investment advisory fees ...........................           93,240
                      Custodian fees .....................................           57,655
                      Trustees' fees and expenses ........................           27,273
                      Printing and shareholder reports ...................            4,998
                      Other ..............................................           71,002
                                                                              -------------
                      Total expenses .....................................                            740,959
                                                                                                -------------
                      Investment income--net .............................                         29,710,172
                                                                                                -------------
- -------------------------------------------------------------------------------------------------------------
Realized &            Realized loss from:
Unrealized Loss         Investments--net .................................      (82,781,943)
On Investments &        Foreign currency transactions--net ...............             (177)      (82,782,120)
Foreign Currency                                                              -------------
Transactions--Net:    Change in unrealized appreciation/depreciation on
                      investments--net ...................................                       (435,785,828)
                                                                                                -------------
                      Total realized and unrealized loss on investments
                      and foreign currency transactions--net .............                       (518,567,948)
                                                                                                -------------
                      Net Decrease in Net Assets Resulting from Operations                      $(488,857,776)
                                                                                                =============
- -------------------------------------------------------------------------------------------------------------


      See Notes to Financial Statements.

STATEMENTS OF CHANGES IN NET ASSETS



                                                                                                For the Year Ended
MASTER                                                                                             December 31,
S&P 500                                                                               -----------------------------------
INDEX SERIES    Increase (Decrease) in Net Assets:                                           2002                2001
- -------------------------------------------------------------------------------------------------------------------------

Operations:     Investment income--net ...........................................    $    29,710,172     $    23,558,016
                Realized loss on investments--net ................................        (82,782,120)        (28,757,480)
                Change in unrealized appreciation/depreciation on investments--net       (435,785,828)       (207,282,579)
                                                                                      ---------------     ---------------
                Net decrease in net assets resulting from operations .............       (488,857,776)       (212,482,043)
                                                                                      ---------------     ---------------
- -------------------------------------------------------------------------------------------------------------------------
Capital         Proceeds from contributions ......................................        589,333,536         976,860,074
Transactions:   Fair value of withdrawals ........................................       (267,267,758)       (585,512,826)
                                                                                      ---------------     ---------------
                Net increase in net assets derived from capital transactions .....        322,065,778         391,347,248
                                                                                      ---------------     ---------------
- -------------------------------------------------------------------------------------------------------------------------
Net Assets:     Total increase (decrease) in net assets ..........................       (166,791,998)        178,865,205
                Beginning of year ................................................      1,893,496,653       1,714,631,448
                                                                                      ---------------     ---------------
                End of year ......................................................    $ 1,726,704,655     $ 1,893,496,653
                                                                                      ===============     ===============
- -------------------------------------------------------------------------------------------------------------------------


      See Notes to Financial Statements.

FINANCIAL HIGHLIGHTS



MASTER               The following ratios have been derived                       For the Year Ended December 31,
S&P 500              from information provided in the         ----------------------------------------------------------------------
INDEX SERIES         financial statements.                       2002           2001           2000           1999           1998
- ------------------------------------------------------------------------------------------------------------------------------------

Total Investment                                                 (22.22%)       (11.97%)            --             --             --
Return:*                                                      ==========     ==========     ==========     ==========     ==========
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios to Average    Expenses .............................         .04%           .05%           .07%           .07%           .10%
Net Assets:                                                   ==========     ==========     ==========     ==========     ==========
                     Investment income--net ...............        1.59%          1.29%          1.16%          1.33%          1.56%
                                                              ==========     ==========     ==========     ==========     ==========
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental         Net assets, end of year (in thousands)   $1,726,705     $1,893,497     $1,714,631     $1,690,336     $1,118,220
Data:                                                         ==========     ==========     ==========     ==========     ==========
                     Portfolio turnover ...................        4.59%          3.21%          9.71%         29.91%         25.97%
                                                              ==========     ==========     ==========     ==========     ==========
- ------------------------------------------------------------------------------------------------------------------------------------


*     Total return is required to be disclosed for fiscal years beginning after
      December 15, 2000.

      See Notes to Financial Statements.


                                     9 & 10


                                                               December 31, 2002

NOTES TO FINANCIAL STATEMENTS

MASTER
S&P 500
INDEX SERIES

1. Significant Accounting Policies:

Master S&P 500 Index Series (the "Series") is part of Quantitative Master Series
Trust (the "Trust"). The Trust is registered under the Investment Company Act of
1940 and is organized as a Delaware business trust. The Declaration of Trust
permits the Trustees to issue nontransferable interests in the Series, subject
to certain limitations. The Series' financial statements are prepared in
conformity with accounting principles generally accepted in the United States of
America, which may require the use of management accruals and estimates. The
following is a summary of significant accounting policies followed by the
Series.

(a) Valuation of investments -- Portfolio securities that are traded on stock
exchanges are valued at the last sale price as of the close of business on the
day the securities are being valued or, lacking any sales, at the closing bid
price. Securities traded in the over-the-counter market are valued at the last
quoted bid price at the close of trading on the New York Stock Exchange on each
day by brokers that make markets in the securities. Securities traded in the
NASDAQ National Market System are valued at the last sale price prior to the
time of valuation. Portfolio securities that are traded both in the
over-the-counter market and on a stock exchange are valued according to the
broadest and most representative market. Options written or purchased are valued
at the last sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last asked price
(options written) or the last bid price (options purchased). Other investments,
including futures contracts and related options, are stated at market value.
Short-term securities are valued at amortized cost, which approximates market
value. Securities and assets for which market quotations are not readily
available are valued at fair market value, as determined in good faith by or
under the direction of the Trust's Board of Trustees.

(b) Derivative financial instruments -- The Series may engage in various
portfolio investment strategies to provide liquidity or as a proxy for a direct
investment in securities underlying the Series' index. Losses may arise due to
changes in the value of the contract or if the counterparty does not perform
under the contract.

o Financial futures contracts -- The Series may purchase or sell financial
futures contracts and options on such futures contracts as a proxy for a direct
investment in securities underlying the Series' index. Upon entering into a
contract, the Series deposits and maintains as collateral such initial margin as
required by the exchange on which the transaction is effected. Pursuant to the
contract, the Series agrees to receive from or pay to the broker an amount of
cash equal to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Series as
unrealized gains or losses. When the contract is closed, the Series records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.

o Options -- The Series is authorized to purchase and write call and put
options. When the Series writes an option, an amount equal to the premium
received by the Series is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked to market to reflect the current
market value of the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from (or added to)
the proceeds of the security sold. When an option expires (or the Series enters
into a closing transaction), the Series realizes a gain or loss on the option to
the extent of the premiums received or paid (or a gain or loss to the extent
that the cost of the closing transaction exceeds the premium paid or received).

Written and purchased options are non-income producing investments.

(c) Foreign currency transactions -- Transactions denominated in foreign
currencies are recorded at the exchange rate prevailing when recognized. Assets
and liabilities denominated in foreign currencies are valued at the exchange
rate at the end of the period. Foreign currency transactions are the result of
settling (realized) or valuing (unrealized) assets or liabilities expressed in
foreign currencies into U.S. dollars. Realized and unrealized gains or losses
from investments include the effects of foreign exchange rates on investments.

(d) Income taxes -- The Series is classified as a partnership for Federal income
tax purposes. As a partnership for Federal income tax purposes, the Series will
not incur Federal income tax liability. Items of partnership income, gain, loss
and deduction will pass through to investors as partners in the Series.
Therefore, no Federal income tax provision is required. Under the applicable
foreign tax law, a withholding tax may be imposed on interest, dividends and
capital gains at various rates. It is intended that the Series' assets will be
managed so an investor in the series can satisfy the requirements of subchapter
M of the Internal Revenue Code.

(e) Security transactions and investment income -- Security transactions are
accounted for on the date the securities are purchased or sold (the trade
dates). Realized gains and losses on security transactions are determined on the
identified cost basis. Dividend income is recorded on the ex-dividend dates.
Interest income is recognized on the accrual basis.

(f) Securities lending -- The Series may lend securities to financial
institutions that provide cash or securities issued or guaranteed by the U.S.
government as collateral, which will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned securities.
Where the Series receives securities as collateral for the loaned securities, it
collects a fee from the borrower. The Series typically receives the income on
the loaned securities but does not receive the income on the collateral. Where
the Series receives cash collateral, it may invest such collateral and retain
the amount earned on such investment, net of any amount rebated to the borrower.
Loans of securities are terminable at any time and the borrower, after notice,
is required to return borrowed securities within five business days. The Series
may pay reasonable finder's, lending agent, administrative and custodial fees in
connection with its loans. In the event that the borrower defaults on its
obligation to return borrowed securities because of insolvency or for any other
reason, the Series could experience delays and costs in gaining access to the
collateral. The Series also could suffer a loss where the value of the
collateral falls below the market value of the borrowed securities, in the event
of borrower default or in the event of losses on investments made with cash
collateral.

2. Investment Advisory Agreement and Transactions with Affiliates:

The Trust has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML
& Co."), which is the limited partner.

FAM is responsible for the management of the Series' portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Series. For such services, the Series pays a monthly
fee at an annual rate of .005% of the average daily value of the Series' net
assets.

The Trust has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S"), a subsidiary of ML & Co., or its
affiliates. Pursuant to that order, the Trust also has retained Merrill Lynch
Investment Advisors, LLC ("MLIA"), an affiliate of FAM, as the securities
lending agent for a fee based on a share of the returns on investment of cash
collateral. MLIA may, on behalf of the Trust and the Series, invest cash
collateral received by the Series for such loans, among other things, in a
private investment company managed by MLIA or in registered money market funds
advised by FAM or its affiliates. As of December 31, 2002, cash collateral of
$291,646,731 was invested in the Money Market Series of the Merrill Lynch
Liquidity Series, LLC and $258,630,119 was invested in the Merrill Lynch Premier
Institutional Fund. As of December 31, 2002, the Series lent securities with a
value of $151,182,378 to MLPF&S. For the year ended December 31, 2002, MLIA
received $123,306 in securities lending agent fees from the Series.

Merrill Lynch Trust Company ("MLTC"), an indirect, wholly-owned subsidiary of ML
& Co., is the Series' custodian.

In  addition,  MLPF&S  received  $862 in  commissions  on the  execution  of
portfolio transactions for the Series for the year ended December 31, 2002.

For the year ended December 31, 2002, the Series reimbursed FAM $41,620 for
certain accounting services.


                                     11 & 12


                                                               December 31, 2002

NOTES TO FINANCIAL STATEMENTS (concluded)

MASTER
S&P 500
INDEX SERIES

Certain officers and/or trustees of the Series are officers and/or directors of
FAM, PSI, MLTC, and/or ML & Co.

3. Investments:

Purchases and sales of investments, excluding short-term securities, for the
year ended December 31, 2002 were $422,056,297 and $83,133,099, respectively.

Net realized losses for the year ended December 31, 2002 and net unrealized
losses as of December 31, 2002 were as follows:

- --------------------------------------------------------------------------------
                                                Realized            Unrealized
                                                 Losses               Losses
- --------------------------------------------------------------------------------
Long-term investments ................       $ (72,369,989)       $(327,432,752)
Financial futures contracts ..........         (10,411,954)            (426,318)
Foreign currency transactions ........                (177)                  --
                                             -------------        -------------
Total ................................       $ (82,782,120)       $(327,859,070)
                                             =============        =============
- --------------------------------------------------------------------------------

As of December 31, 2002, net unrealized depreciation for Federal income tax
purposes aggregated $402,863,518, of which $101,635,643 related to appreciated
securities and $504,499,161 related to depreciated securities. At December 31,
2002, the aggregate cost of investments for Federal income tax purposes was
$2,113,955,663.

4. Short-Term Borrowings:

The Series, along with certain other funds managed by FAM and its affiliates, is
a party to a credit agreement with Bank One, N.A. and certain other lenders.
Effective November 29, 2002, in conjunction with the renewal for one year at the
same terms, the total commitment was reduced from $1,000,000,000 to
$500,000,000. The Series may borrow under the credit agreement to fund partner
withdrawals and for other lawful purposes other than for leverage. The Series
may borrow up to the maximum amount allowable under the Series' current
prospectus and statement of additional information, subject to various other
legal, regulatory or contractual limits. The Series pays a commitment fee of
..09% per annum based on the Series pro rata share of the unused portion of the
credit agreement. Amounts borrowed under the credit agreement bear interest at a
rate equal to, at each fund's election, the Federal Funds rate plus .50% or a
base rate as determined by Bank One, N.A. The Series did not borrow under the
credit agreement during the year ended December 31, 2002.

INDEPENDENT AUDITORS' REPORT

The Board of Trustees and Investors, Master S&P 500 Index Series (One of the
series constituting Quantitative Master Series Trust):

We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of Master S&P 500 Index Series (one of the series
constituting Quantitative Master Series Trust) as of December 31, 2002, the
related statements of operations for the year then ended and changes in net
assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years presented. These financial statements
and the financial highlights are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial statements and
the financial highlights based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at December 31, 2002 by correspondence with the custodian and
brokers; where replies were not received, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Master S&P 500 Index
Series of the Quantitative Master Series Trust as of December 31, 2002, the
results of its operations, the changes in its net assets and the financial
highlights for the respective stated periods in conformity with accounting
principles generally accepted in the United States of America.


/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Princeton, New Jersey
February 18, 2003



                                   Appendix A

                               Ratings Definitions

Below are summaries of the rating definitions used by the nationally-recognized
rating agencies listed below. Those ratings represent the opinion of the agency
as to the credit quality of issues that they rate. The summaries below are based
upon publicly-available information provided by the rating organizations.


Moody's Investors Service, Inc. ("Moody's")


LONG-TERM (TAXABLE) BOND RATINGS

Aaa: Bonds rated "Aaa" are judged to be the best quality. They carry the
smallest degree of investment risk. Interest payments are protected by a large
or by an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, the changes that can be expected are
most unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds rated "Aa" are judged to be of high quality by all standards. Together
with the "Aaa" group, they comprise what are generally known as high-grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as with "Aaa" securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat larger than that of "Aaa"
securities.

A: Bonds rated "A" possess many favorable investment attributes and are to be
considered as upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment some time in the future.

Baa: Bonds rated "Baa" are considered medium-grade obligations; that is, they
are neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and have speculative
characteristics as well.

Ba: Bonds rated "Ba" are judged to have speculative elements. Their future
cannot be considered well-assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B: Bonds rated "B" generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or of maintenance of other terms of
the contract over any long period of time may be small.

Caa: Bonds rated "Caa" are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or
interest.

Ca: Bonds rated "Ca" represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

C: Bonds rated "C" are the lowest class of rated bonds and can be regarded as
having extremely poor prospects of ever attaining any real investment standing.
Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from "Aa" through "Caa." The modifier "1" indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
"2" indicates a mid-range ranking; and the modifier "3" indicates a ranking in
the lower end of that generic rating category. Advanced refunded issues that are
secured by certain assets are identified with a # symbol.

SHORT-TERM RATINGS - TAXABLE DEBT

These ratings apply to the ability of issuers to honor senior debt obligations
having an original maturity not exceeding one year:

Prime-1: Issuer has a superior ability for repayment of senior short-term
debt obligations.

Prime-2: Issuer has a strong ability for repayment of senior short-term debt
obligations. Earnings trends and coverage ratios, while sound, may be more
subject to variation. Capitalization characteristics, while appropriate, may be
more affected by external conditions. Ample alternate liquidity is maintained.

Prime-3: Issuer has an acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market compositions may
be more pronounced. Variability in earnings and profitability may result in
changes in the level of debt protection measurements and may require relatively
high financial leverage. Adequate alternate liquidity is maintained.

Not Prime: Issuer does not fall within any Prime rating category.


Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The
McGraw-Hill Companies, Inc.

LONG-TERM ISSUE CREDIT RATINGS


AAA: Bonds rated "AAA" have the highest rating assigned by Standard & Poor's.
The obligor's capacity to meet its financial commitment on the obligation is
extremely strong.


AA:  Bonds rated "AA" differ from the highest rated bonds only in small
degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.


A: Bonds rated "A" are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB: Bonds rated "BBB" exhibit adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial commitment on the
obligation.

BB, B, CCC, CC, and C

Obligations rated `BB', `B', `CCC', `CC', and `C' are regarded as having
significant speculative characteristics. `BB' indicates the least degree of
speculation and `C' the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: Bonds rated "BB" are less vulnerable to nonpayment than other speculative
issues. However, they face major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B: Bonds rated "B" are more vulnerable to nonpayment than bonds rated "BB", but
the obligor currently has the capacity to meet its financial commitment on the
obligation. Adverse business, financial, or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.

CCC: Bonds rated "CCC" are currently vulnerable to nonpayment, and are dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.


CC: Bonds rated "CC" are currently highly vulnerable to nonpayment.


C: Subordinated debt or preferred stock obligations rated "C" are currently
highly vulnerable to nonpayment. The "C" rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action taken, but payments
on this obligation are being continued. A "C" also will be assigned to a
preferred stock issue in arrears on dividends or sinking fund payments, but that
is currently paying.

D: Bonds rated "D" are in payment default. The "D" rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless Standard & Poor's believes that such
payments will be made during such grace period. The "D" rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.


The ratings from "AA" to "CCC" may be modified by the addition of a plus (+) or
minus (-) sign to show relative standing within the major rating categories. The
"r" symbol is attached to the ratings of instruments with significant noncredit
risks.

SHORT-TERM ISSUE CREDIT RATINGS


A-1: A short-term bond rated "A-1" is rated in the highest category by Standard
& Poor's. The obligor's capacity to meet its financial commitment on the
obligation is strong. Within this category, certain obligations are designated
with a plus sign (+). This indicates that the obligor's capacity to meet its
financial commitment on these obligations is extremely strong.

A-2: A short-term bond rated "A-2" is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rating categories. However, the obligor's capacity to meet its financial
commitment on the obligation is satisfactory.

A-3: A short-term bond rated "A-3" exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

B: A short-term bond rated "B" is regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

C: A short-term bond rated "C" is currently vulnerable to nonpayment and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D: A short-term bond rated "D" is in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The "D" rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.


Fitch, Inc.

INTERNATIONAL LONG-TERM CREDIT RATINGS

Investment Grade:

AAA: Highest Credit Quality. "AAA" ratings denote the lowest expectation of
credit risk. They are assigned only in the case of exceptionally strong
capacity for timely payment of financial commitments. This capacity is highly
unlikely to be adversely affected by foreseeable events.

AA: Very High Credit Quality. "AA" ratings denote a very low expectation of
credit risk. They indicate a very strong capacity for timely payment of
financial commitments. This capacity is not significantly vulnerable to
foreseeable events.

A: High Credit Quality. "A" ratings denote a low expectation of credit risk.
The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

BBB: Good Credit Quality. "BBB" ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and
in economic conditions are more likely to impair this capacity. This is the
lowest investment-grade category.

Speculative Grade:

BB: Speculative. "BB" ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time. However, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

B: Highly Speculative. "B" ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met. However, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

CCC, CC C: High Default Risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A "CC" rating indicates that default of
some kind appears probable. "C" ratings signal imminent default.

DDD, DD, and D: Default. The ratings of obligations in this category are based
on their prospects for achieving partial or full recovery in a reorganization or
liquidation of the obligor. While expected recovery values are highly
speculative and cannot be estimated with any precision, the following serve as
general guidelines. "DDD" obligations have the highest potential for recovery,
around 90%-100% of outstanding amounts and accrued interest. "DD" indicates
potential recoveries in the range of 50%-90%, and "D" the lowest recovery
potential, i.e., below 50%.

Entities rated in this category have defaulted on some or all of their
obligations. Entities rated "DDD" have the highest prospect for resumption of
performance or continued operation with or without a formal reorganization
process. Entities rated "DD" and "D" are generally undergoing a formal
reorganization or liquidation process; those rated "DD" are likely to satisfy a
higher portion of their outstanding obligations, while entities rated "D" have a
poor prospect for repaying all obligations.

Plus (+) and minus (-) signs may be appended to a rating symbol to denote
relative status within the major rating categories. Plus and minus signs are not
added to the "AAA" category or to categories below "CCC," nor to short-term
ratings other than "F1" (see below).

INTERNATIONAL SHORT-TERM CREDIT RATINGS

F1: Highest credit quality. Strongest capacity for timely payment of
financial commitments. May have an added "+" to denote any exceptionally
strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the
case of higher ratings.

F3: Fair credit quality. Capacity for timely payment of financial commitments
is adequate. However, near-term adverse changes could result in a reduction
to non-investment grade.

B:  Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.

C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business
and economic environment.

D: Default. Denotes actual or imminent payment default.







                                       B-1
                                   Appendix B

                            Industry Classifications


Aerospace & Defense                     Household Products
Air Freight & Couriers                  Industrial Conglomerates
Airlines                                Insurance
Auto Components                         Internet & Catalog Retail
Automobiles                             Internet Software & Services
Banks                                   Information Technology Consulting &
                                        Services
Beverages Leisure Equipment & Products Biotechnology Machinery Building Products
Marine Chemicals Media Commercial Services & Supplies Metals & Mining
Communications Equipment Multiline Retail Computers & Peripherals
Multi-Utilities Construction & Engineering Office Electronics Construction
Materials Oil & Gas Containers & Packaging Paper & Forest Products Distributors
Personal Products Diversified Financials Pharmaceuticals Diversified
Telecommunication Services Real Estate Electric Utilities Road & Rail Electrical
Equipment Semiconductor Equipment & Products Electronic Equipment & Instruments
Software Energy Equipment & Services Specialty Retail Food & Drug Retailing
Textiles & Apparel Food Products Tobacco Gas Utilities Trading Companies &
Distributors Health Care Equipment & Supplies Transportation Infrastructure
Health Care Providers & Services Water Utilities Hotels Restaurants & Leisure
Wireless Telecommunication Services Household Durables








                                      C-11
                                   Appendix C

        OppenheimerFunds Special Sales Charge Arrangements and Waivers

In certain cases, the initial sales charge that applies to purchases of Class A
shares1 of the Oppenheimer funds or the contingent deferred sales charge that
may apply to Class A, Class B or Class C shares may be waived.2 That is because
of the economies of sales efforts realized by OppenheimerFunds Distributor,
Inc., (referred to in this document as the "Distributor"), or by dealers or
other financial institutions that offer those shares to certain classes of
investors.

Not all waivers apply to all funds. For example, waivers relating to Retirement
Plans do not apply to Oppenheimer municipal funds, because shares of those funds
are not available for purchase by or on behalf of retirement plans. Other
waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds, the
term "Retirement Plan" refers to the following types of plans:
         1) plans qualified under Sections 401(a) or 401(k) of the Internal
            Revenue Code,
         2) non-qualified deferred compensation plans, 3) employee benefit
            plans3
         4) Group Retirement Plans4 5) 403(b)(7) custodial plan accounts
         6) Individual Retirement Accounts ("IRAs"), including traditional IRAs,
            Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the "Transfer
Agent") of the particular Oppenheimer fund. These waivers and special
arrangements may be amended or terminated at any time by a particular fund, the
Distributor, and/or OppenheimerFunds, Inc. (referred to in this document as the
"Manager").


Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request. I.






 Applicability of Class A Contingent Deferred Sales Charges in Certain Cases
- ------------------------------------------------------------------------------

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to Initial
Sales Charge but May Be Subject to the Class A Contingent Deferred Sales Charge
(unless a waiver applies).

      There is no initial sales charge on purchases of Class A shares of any of
the Oppenheimer funds in the cases listed below. However, these purchases may be
subject to the Class A contingent deferred sales charge if redeemed within 18
months (24 months in the case of Oppenheimer Rochester National Municipals and
Rochester Fund Municipals) of the beginning of the calendar month of their
purchase, as described in the Prospectus (unless a waiver described elsewhere in
this Appendix applies to the redemption). Additionally, on shares purchased
under these waivers that are subject to the Class A contingent deferred sales
charge, the Distributor will pay the applicable concession described in the
Prospectus under "Class A Contingent Deferred Sales Charge."5 This waiver
provision applies to: |_| Purchases of Class A shares aggregating $1 million or
more. |_| Purchases of Class A shares by a Retirement Plan that was permitted to
         purchase such shares at net asset value but subject to a contingent
         deferred sales charge prior to March 1, 2001. That included plans
         (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
         costing $500,000 or more, 2) had at the time of purchase 100 or more
         eligible employees or total plan assets of $500,000 or more, or 3)
         certified to the Distributor that it projects to have annual plan
         purchases of $200,000 or more.
|_|   Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
         purchases are made:
         1) through a broker, dealer, bank or registered investment adviser
            that has made special arrangements with the Distributor for those
            purchases, or
         2) by a direct rollover of a distribution from a qualified Retirement
            Plan if the administrator of that Plan has made special arrangements
            with the Distributor for those purchases.
|_|      Purchases of Class A shares by Retirement Plans that have any of the
         following record-keeping arrangements: 1) The record keeping is
         performed by Merrill Lynch Pierce Fenner &
            Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
            Retirement Plan. On the date the plan sponsor signs the
            record-keeping service agreement with Merrill Lynch, the Plan must
            have $3 million or more of its assets invested in (a) mutual funds,
            other than those advised or managed by Merrill Lynch Investment
            Management, L.P. ("MLIM"), that are made available under a Service
            Agreement between Merrill Lynch and the mutual fund's principal
            underwriter or distributor, and (b) funds advised or managed by MLIM
            (the funds described in (a) and (b) are referred to as "Applicable
            Investments").
         2) The record keeping for the Retirement Plan is performed on a daily
            valuation basis by a record keeper whose services are provided under
            a contract or arrangement between the Retirement Plan and Merrill
            Lynch. On the date the plan sponsor signs the record keeping service
            agreement with Merrill Lynch, the Plan must have $3 million or more
            of its assets (excluding assets invested in money market funds)
            invested in Applicable Investments.
         3) The record keeping for a Retirement Plan is handled under a service
            agreement with Merrill Lynch and on the date the plan sponsor signs
            that agreement, the Plan has 500 or more eligible employees (as
            determined by the Merrill Lynch plan conversion manager).

      II.






            Waivers of Class A Sales Charges of Oppenheimer Funds
- ------------------------------------------------------------------------------

A. Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers.

Class A shares purchased by the following investors are not subject to any Class
A sales charges (and no concessions are paid by the Distributor on such
purchases):
|_|   The Manager or its affiliates.

|_|   Present or former officers, directors, trustees and employees (and
         their "immediate families") of the Fund, the Manager and its
         affiliates, and retirement plans established by them for their
         employees. The term "immediate family" refers to one's spouse,
         children, grandchildren, grandparents, parents, parents-in-law,
         brothers and sisters, sons- and daughters-in-law, a sibling's
         spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
         relatives by virtue of a remarriage (step-children, step-parents,
         etc.) are included.

|_|      Registered management investment companies, or separate accounts of
         insurance companies having an agreement with the Manager or the
         Distributor for that purpose.
|_|      Dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans for
         their employees.
|_|   Employees and registered representatives (and their spouses) of dealers
         or brokers described above or financial institutions that have
         entered into sales arrangements with such dealers or brokers (and
         which are identified as such to the Distributor) or with the
         Distributor. The purchaser must certify to the Distributor at the
         time of purchase that the purchase is for the purchaser's own
         account (or for the benefit of such employee's spouse or minor
         children).
|_|      Dealers, brokers, banks or registered investment advisors that have
         entered into an agreement with the Distributor providing specifically
         for the use of shares of the Fund in particular investment products
         made available to their clients. Those clients may be charged a
         transaction fee by their dealer, broker, bank or advisor for the
         purchase or sale of Fund shares.
|_|      Investment advisors and financial planners who have entered into an
         agreement for this purpose with the Distributor and who charge an
         advisory, consulting or other fee for their services and buy shares for
         their own accounts or the accounts of their clients.
|_|      "Rabbi trusts" that buy shares for their own accounts, if the purchases
         are made through a broker or agent or other financial intermediary that
         has made special arrangements with the Distributor for those purchases.
|_|   Clients of investment advisors or financial planners (that have entered
         into an agreement for this purpose with the Distributor) who buy
         shares for their own accounts may also purchase shares without sales
         charge but only if their accounts are linked to a master account of
         their investment advisor or financial planner on the books and
         records of the broker, agent or financial intermediary with which
         the Distributor has made such special arrangements . Each of these
         investors may be charged a fee by the broker, agent or financial
         intermediary for purchasing shares.
|_|      Directors, trustees, officers or full-time employees of OpCap Advisors
         or its affiliates, their relatives or any trust, pension, profit
         sharing or other benefit plan which beneficially owns shares for those
         persons.
|_|      Accounts for which Oppenheimer Capital (or its successor) is the
         investment advisor (the Distributor must be advised of this
         arrangement) and persons who are directors or trustees of the company
         or trust which is the beneficial owner of such accounts.
|_|      A unit investment trust that has entered into an appropriate agreement
         with the Distributor.
|_|      Dealers, brokers, banks, or registered investment advisers that have
         entered into an agreement with the Distributor to sell shares to
         defined contribution employee retirement plans for which the dealer,
         broker or investment adviser provides administration services.
      Retirement Plans and deferred compensation plans and trusts used to fund
         those plans (including, for example, plans qualified or created under
         sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue Code),
         in each case if those purchases are made through a broker, agent or
         other financial intermediary that has made special arrangements with
         the Distributor for those purchases.
|_|      A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
         Advisors) whose Class B or Class C shares of a Former Quest for Value
         Fund were exchanged for Class A shares of that Fund due to the
         termination of the Class B and Class C TRAC-2000 program on November
         24, 1995.
|_|      A qualified Retirement Plan that had agreed with the former Quest for
         Value Advisors to purchase shares of any of the Former Quest for Value
         Funds at net asset value, with such shares to be held through
         DCXchange, a sub-transfer agency mutual fund clearinghouse, if that
         arrangement was consummated and share purchases commenced by December
         31, 1996.

B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.

Class A shares issued or purchased in the following transactions are not subject
to sales charges (and no concessions are paid by the Distributor on such
purchases):
|_|      Shares issued in plans of reorganization, such as mergers, asset
         acquisitions and exchange offers, to which the Fund is a party.
|_|      Shares purchased by the reinvestment of dividends or other
         distributions reinvested from the Fund or other Oppenheimer funds
         (other than Oppenheimer Cash Reserves) or unit investment trusts for
         which reinvestment arrangements have been made with the Distributor.
|_|   Shares purchased through a broker-dealer that has entered into a
         special agreement with the Distributor to allow the broker's
         customers to purchase and pay for shares of Oppenheimer funds using
         the proceeds of shares redeemed in the prior 30 days from a mutual
         fund (other than a fund managed by the Manager or any of its
         subsidiaries) on which an initial sales charge or contingent
         deferred sales charge was paid. This waiver also applies to shares
         purchased by exchange of shares of Oppenheimer Money Market Fund,
         Inc. that were purchased and paid for in this manner. This waiver
         must be requested when the purchase order is placed for shares of
         the Fund, and the Distributor may require evidence of qualification
         for this waiver.
|_|      Shares purchased with the proceeds of maturing principal units of any
         Qualified Unit Investment Liquid Trust Series.
|_|      Shares purchased by the reinvestment of loan repayments by a
         participant in a Retirement Plan for which the Manager or an affiliate
         acts as sponsor.

C. Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions.

The Class A contingent deferred sales charge is also waived if shares that would
otherwise be subject to the contingent deferred sales charge are redeemed in the
following cases:
|_|      To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|      Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|      For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes: 1)
         Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established.
         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact. 4) Hardship
         withdrawals, as defined in the plan.6 5) Under a Qualified Domestic
         Relations Order, as defined in the
            Internal Revenue Code, or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries. 9) Separation from
            service.7
         10)Participant-directed redemptions to purchase shares of a mutual
            fund (other than a fund managed by the Manager or a subsidiary of
            the Manager) if the plan has made special arrangements with the
            Distributor.
         11)Plan termination or "in-service distributions," if the redemption
            proceeds are rolled over directly to an OppenheimerFunds-sponsored
            IRA.
|_|      For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|      For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with the
         Distributor.
|_|      For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.
III.    Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer
                                        Funds
- --------------------------------------------------------------------------------

The Class B, Class C and Class N contingent deferred sales charges will not be
applied to shares purchased in certain types of transactions or redeemed in
certain circumstances described below.

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases: |_| Shares redeemed
involuntarily, as described in "Shareholder Account
         Rules and Policies," in the applicable Prospectus.
|_|   Redemptions from accounts other than Retirement Plans following the

         death or disability of the last surviving shareholder. The death or
         disability must have occurred after the account was established, and
         for disability you must provide evidence of a determination of
         disability by the Social Security Administration.
|_|   The contingent deferred sales charges are generally not waived
         following the death or disability of a grantor or trustee for a
         trust account. The contingent deferred sales charges will only be
         waived in the limited case of the death of the trustee of a grantor
         trust or revocable living trust for which the trustee is also the
         sole beneficiary. The death or disability must have occurred after
         the account was established, and for disability you must provide
         evidence of a determination of disability by the Social Security
         Administration.

|_|      Distributions from accounts for which the broker-dealer of record has
         entered into a special agreement with the Distributor allowing this
         waiver.
|_|      Redemptions of Class B shares held by Retirement Plans whose records
         are maintained on a daily valuation basis by Merrill Lynch or an
         independent record keeper under a contract with Merrill Lynch.
|_|      Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
         accounts of clients of financial institutions that have entered into a
         special arrangement with the Distributor for this purpose.
|_|      Redemptions requested in writing by a Retirement Plan sponsor of Class
         C shares of an Oppenheimer fund in amounts of $500,000 or more and made
         more than 12 months after the Retirement Plan's first purchase of Class
         C shares, if the redemption proceeds are invested in Class N shares of
         one or more Oppenheimer funds.
|_|      Distributions8 from Retirement Plans or other employee benefit plans
         for any of the following purposes: 1) Following the death or disability
         (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established in an Oppenheimer fund.
         2) To return excess contributions made to a participant's account. 3)
         To return contributions made due to a mistake of fact. 4) To make
         hardship withdrawals, as defined in the plan.9 5) To make distributions
         required under a Qualified Domestic
            Relations Order or, in the case of an IRA, a divorce or separation
            agreement described in Section 71(b) of the Internal Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
         Revenue Code.
         7) To make "substantially equal periodic payments" as described in
         Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.10 9) On account of the
         participant's separation from service.11 10) Participant-directed
         redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with the
            Distributor.
         11)Distributions made on account of a plan termination or "in-service"
            distributions, if the redemption proceeds are rolled over directly
            to an OppenheimerFunds-sponsored IRA.
         12)For distributions from a participant's account under an Automatic
            Withdrawal Plan after the participant reaches age 59 1/2, as long as
            the aggregate value of the distributions does not exceed 10% of the
            account's value, adjusted annually.
         13)Redemptions of Class B shares under an Automatic Withdrawal Plan
            for an account other than a Retirement Plan, if the aggregate value
            of the redeemed shares does not exceed 10% of the account's value,
            adjusted annually.
         14)For distributions from 401(k) plans sponsored by broker-dealers
            that have entered into a special arrangement with the Distributor
            allowing this waiver.
|_|      Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.

B. Waivers for Shares Sold or Issued in Certain Transactions.

The contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases: |_| Shares sold to the Manager or
its affiliates.
|_|      Shares sold to registered management investment companies or separate
         accounts of insurance companies having an agreement with the Manager or
         the Distributor for that purpose.
|_| Shares issued in plans of reorganization to which the Fund is a party. |_|
Shares sold to present or former officers, directors, trustees or
         employees (and their "immediate families" as defined above in
         Section I.A.) of the Fund, the Manager and its affiliates and
         retirement plans established by them for their employees.
IV.        Special Sales Charge Arrangements for Shareholders of Certain
      Oppenheimer Funds Who Were Shareholders of Former Quest for Value Funds
- ------------------------------------------------------------------------------

The initial and contingent deferred sales charge rates and waivers for Class A,
Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described below
for certain persons who were shareholders of the former Quest for Value Funds.
To be eligible, those persons must have been shareholders on November 24, 1995,
when OppenheimerFunds, Inc. became the investment advisor to those former Quest
for Value Funds. Those funds include:
   Oppenheimer Quest Value Fund, Inc.           Oppenheimer Small Cap Value
   Fund
   Oppenheimer Quest Balanced Value Fund        Oppenheimer Quest Global
   Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

      These arrangements also apply to shareholders of the following funds when
they merged (were reorganized) into various Oppenheimer funds on November 24,
1995:

   Quest for Value U.S. Government Income Fund  Quest for Value New York
   Tax-Exempt Fund
   Quest for Value Investment Quality Income Fund     Quest for Value
   National Tax-Exempt Fund
   Quest for Value Global Income Fund     Quest for Value California
   Tax-Exempt Fund

      All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds." The waivers of initial and contingent deferred
sales charges described in this Appendix apply to shares of an Oppenheimer fund
that are either:
|_|      acquired by such shareholder pursuant to an exchange of shares of an
         Oppenheimer fund that was one of the Former Quest for Value Funds, or
|_|      purchased by such shareholder by exchange of shares of another
         Oppenheimer fund that were acquired pursuant to the merger of any of
         the Former Quest for Value Funds into that other Oppenheimer fund on
         November 24, 1995.

A. Reductions or Waivers of Class A Sales Charges.

|X| Reduced Class A Initial Sales Charge Rates for Certain Former Quest for
Value Funds Shareholders.

Purchases by Groups and Associations. The following table sets forth the initial
sales charge rates for Class A shares purchased by members of "Associations"
formed for any purpose other than the purchase of securities. The rates in the
table apply if that Association purchased shares of any of the Former Quest for
Value Funds or received a proposal to purchase such shares from OCC Distributors
prior to November 24, 1995.

- --------------------------------------------------------------------------------
                      Initial Sales       Initial Sales Charge   Concession as
Number of Eligible    Charge as a % of    as a % of Net Amount   % of Offering
Employees or Members  Offering Price      Invested               Price
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9 or Fewer                   2.50%                2.56%              2.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
At  least  10 but not        2.00%                2.04%              1.60%
more than 49
- --------------------------------------------------------------------------------

- ------------------------------------------------------------------------------
      For purchases by Associations having 50 or more eligible employees or
members, there is no initial sales charge on purchases of Class A shares, but
those shares are subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.

      Purchases made under this arrangement qualify for the lower of either the
sales charge rate in the table based on the number of members of an Association,
or the sales charge rate that applies under the Right of Accumulation described
in the applicable fund's Prospectus and Statement of Additional Information.
Individuals who qualify under this arrangement for reduced sales charge rates as
members of Associations also may purchase shares for their individual or
custodial accounts at these reduced sales charge rates, upon request to the
Distributor.

|X| Waiver of Class A Sales Charges for Certain Shareholders. Class A shares
purchased by the following investors are not subject to any Class A initial or
contingent deferred sales charges:
o           Shareholders who were shareholders of the AMA Family of Funds on
            February 28, 1991 and who acquired shares of any of the Former Quest
            for Value Funds by merger of a portfolio of the AMA Family of Funds.
o           Shareholders who acquired shares of any Former Quest for Value Fund
            by merger of any of the portfolios of the Unified Funds.

|X| Waiver of Class A Contingent Deferred Sales Charge in Certain Transactions.
The Class A contingent deferred sales charge will not apply to redemptions of
Class A shares purchased by the following investors who were shareholders of any
Former Quest for Value Fund:

      Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations adopted under that law.

B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

|X| Waivers for Redemptions of Shares Purchased Prior to March 6, 1995. In the
following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged. Those shares must have been
purchased prior to March 6, 1995 in connection with:
o           withdrawals under an automatic withdrawal plan holding only either
            Class B or Class C shares if the annual withdrawal does not exceed
            10% of the initial value of the account value, adjusted annually,
            and
o           liquidation of a shareholder's account if the aggregate net asset
            value of shares held in the account is less than the required
            minimum value of such accounts.

|X| Waivers for Redemptions of Shares Purchased on or After March 6, 1995 but
Prior to November 24, 1995. In the following cases, the contingent deferred
sales charge will be waived for redemptions of Class A, Class B or Class C
shares of an Oppenheimer fund. The shares must have been acquired by the merger
of a Former Quest for Value Fund into the fund or by exchange from an
Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on or
after March 6, 1995, but prior to November 24, 1995: o redemptions following the
death or disability of the shareholder(s) (as
            evidenced by a determination of total disability by the U.S.
            Social Security Administration);
o           withdrawals under an automatic withdrawal plan (but only for Class B
            or Class C shares) where the annual withdrawals do not exceed 10% of
            the initial value of the account value; adjusted annually, and
o           liquidation of a shareholder's account if the aggregate net asset
            value of shares held in the account is less than the required
            minimum account value.

      A shareholder's account will be credited with the amount of any contingent
deferred sales charge paid on the redemption of any Class A, Class B or Class C
shares of the Oppenheimer fund described in this section if the proceeds are
invested in the same Class of shares in that fund or another Oppenheimer fund
within 90 days after redemption.
V.         Special Sales Charge Arrangements for Shareholders of Certain
          Oppenheimer Funds Who Were Shareholders of Connecticut Mutual
                            Investment Accounts, Inc.
- ---------------------------------------------------------------------------

The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix) of
the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
   Oppenheimer U. S. Government Trust,
   Oppenheimer Bond Fund,
   Oppenheimer Value Fund and
   Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:
   Connecticut Mutual Liquid Account Connecticut Mutual Total Return Account
   Connecticut Mutual Government Securities Account CMIA LifeSpan Capital
   Appreciation Account Connecticut Mutual Income Account CMIA LifeSpan Balanced
   Account Connecticut Mutual Growth Account CMIA Diversified Income Account

A. Prior Class A CDSC and Class A Sales Charge Waivers.

|X| Class A Contingent Deferred Sales Charge. Certain shareholders of a Fund and
the other Former Connecticut Mutual Funds are entitled to continue to make
additional purchases of Class A shares at net asset value without a Class A
initial sales charge, but subject to the Class A contingent deferred sales
charge that was in effect prior to March 18, 1996 (the "prior Class A CDSC").
Under the prior Class A CDSC, if any of those shares are redeemed within one
year of purchase, they will be assessed a 1% contingent deferred sales charge on
an amount equal to the current market value or the original purchase price of
the shares sold, whichever is smaller (in such redemptions, any shares not
subject to the prior Class A CDSC will be redeemed first).

      Those shareholders who are eligible for the prior Class A CDSC are: 1)
         persons whose purchases of Class A shares of a Fund and other
            Former Connecticut Mutual Funds were $500,000 prior to March 18,
            1996, as a result of direct purchases or purchases pursuant to the
            Fund's policies on Combined Purchases or Rights of Accumulation, who
            still hold those shares in that Fund or other Former Connecticut
            Mutual Funds, and
         2) persons whose intended purchases under a Statement of Intention
            entered into prior to March 18, 1996, with the former general
            distributor of the Former Connecticut Mutual Funds to purchase
            shares valued at $500,000 or more over a 13-month period entitled
            those persons to purchase shares at net asset value without being
            subject to the Class A initial sales charge

      Any of the Class A shares of a Fund and the other Former Connecticut
Mutual Funds that were purchased at net asset value prior to March 18, 1996,
remain subject to the prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant to this arrangement
they will be subject to the prior Class A CDSC.

|X| Class A Sales Charge Waivers. Additional Class A shares of a Fund may be
purchased without a sales charge, by a person who was in one (or more) of the
categories below and acquired Class A shares prior to March 18, 1996, and still
holds Class A shares:
         1) any purchaser, provided the total initial amount invested in the
            Fund or any one or more of the Former Connecticut Mutual Funds
            totaled $500,000 or more, including investments made pursuant to the
            Combined Purchases, Statement of Intention and Rights of
            Accumulation features available at the time of the initial purchase
            and such investment is still held in one or more of the Former
            Connecticut Mutual Funds or a Fund into which such Fund merged;
         2) any participant in a qualified plan, provided that the total initial
            amount invested by the plan in the Fund or any one or more of the
            Former Connecticut Mutual Funds totaled $500,000 or more;
         3) Directors of the Fund or any one or more of the Former Connecticut
            Mutual Funds and members of their immediate families;
         4) employee benefit plans sponsored by Connecticut Mutual Financial
            Services, L.L.C. ("CMFS"), the prior distributor of the Former
            Connecticut Mutual Funds, and its affiliated companies;
         5) one or more members of a group of at least 1,000 persons (and
            persons who are retirees from such group) engaged in a common
            business, profession, civic or charitable endeavor or other
            activity, and the spouses and minor dependent children of such
            persons, pursuant to a marketing program between CMFS and such
            group; and
         6) an institution acting as a fiduciary on behalf of an individual or
            individuals, if such institution was directly compensated by the
            individual(s) for recommending the purchase of the shares of the
            Fund or any one or more of the Former Connecticut Mutual Funds,
            provided the institution had an agreement with CMFS.

      Purchases of Class A shares made pursuant to (1) and (2) above may be
subject to the Class A CDSC of the Former Connecticut Mutual Funds described
above.

      Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State by
Connecticut Mutual Life Insurance Company through the Panorama Separate Account
which is beyond the applicable surrender charge period and which was used to
fund a qualified plan, if that holder exchanges the variable annuity contract
proceeds to buy Class A shares of the Fund.

B. Class A and Class B Contingent Deferred Sales Charge Waivers.

In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B shares
of a Fund into Class A or Class B shares of a Former Connecticut Mutual Fund
provided that the Class A or Class B shares of the Fund to be redeemed or
exchanged were (i) acquired prior to March 18, 1996 or (ii) were acquired by
exchange from an Oppenheimer fund that was a Former Connecticut Mutual Fund.
Additionally, the shares of such Former Connecticut Mutual Fund must have been
purchased prior to March 18, 1996:
   1) by the estate of a deceased shareholder;
   2) upon the disability of a shareholder, as defined in Section 72(m)(7) of
      the Internal Revenue Code;
   3) for retirement distributions (or loans) to participants or beneficiaries
      from retirement plans qualified under Sections 401(a) or 403(b)(7)of the
      Code, or from IRAs, deferred compensation plans created under Section 457
      of the Code, or other employee benefit plans;
   4) as tax-free returns of excess contributions to such retirement or employee
      benefit plans;
   5) in whole or in part, in connection with shares sold to any state, county,
      or city, or any instrumentality, department, authority, or agency thereof,
      that is prohibited by applicable investment laws from paying a sales
      charge or concession in connection with the purchase of shares of any
      registered investment management company;
   6) in connection with the redemption of shares of the Fund due to a
      combination with another investment company by virtue of a merger,
      acquisition or similar reorganization transaction;
   7) in connection with the Fund's right to involuntarily redeem or liquidate
      the Fund;
   8) in connection with automatic redemptions of Class A shares and Class B
      shares in certain retirement plan accounts pursuant to an Automatic
      Withdrawal Plan but limited to no more than 12% of the original value
      annually; or
   9) as involuntary redemptions of shares by operation of law, or under
      procedures set forth in the Fund's Articles of Incorporation, or as
      adopted by the Board of Directors of the Fund.
VI.       Special Reduced Sales Charge for Former Shareholders of Advance
                                America Funds, Inc.
- ------------------------------------------------------------------------------

Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Capital Income Fund
who acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those
Oppenheimer funds on October 18, 1991, and who held shares of Advance America
Funds, Inc. on March 30, 1990, may purchase Class A shares of those four
Oppenheimer funds at a maximum sales charge rate of 4.50%.

VII.     Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
                            Convertible Securities Fund
- ------------------------------------------------------------------------------

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to purchase
those shares at net asset value without sales charge: |_| the Manager and its
affiliates, |_| present or former officers, directors, trustees and employees
(and
         their "immediate families" as defined in the Fund's Statement of
         Additional Information) of the Fund, the Manager and its affiliates,
         and retirement plans established by them or the prior investment
         advisor of the Fund for their employees,
|_|      registered management investment companies or separate accounts of
         insurance companies that had an agreement with the Fund's prior
         investment advisor or distributor for that purpose,
|_|      dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans for
         their employees,
|_|      employees and registered representatives (and their spouses) of dealers
         or brokers described in the preceding section or financial institutions
         that have entered into sales arrangements with those dealers or brokers
         (and whose identity is made known to the Distributor) or with the
         Distributor, but only if the purchaser certifies to the Distributor at
         the time of purchase that the purchaser meets these qualifications,
      |_|dealers, brokers, or registered investment advisors that had entered
         into an agreement with the Distributor or the prior distributor of the
         Fund specifically providing for the use of Class M shares of the Fund
         in specific investment products made available to their clients, and
|_|      dealers, brokers or registered investment advisors that had entered
         into an agreement with the Distributor or prior distributor of the
         Fund's shares to sell shares to defined contribution employee
         retirement plans for which the dealer, broker, or investment advisor
         provides administrative services.





Oppenheimer Select Managers

Internet Web Site:
      WWW.OPPENHEIMERFUNDS.COM


Investment Adviser for OSM - Mercury Advisors S&P 500 Index Fund and
OSM - Mercury Advisors Focus Growth Fund

      Mercury Advisors
      800 Scudders Mill Road
      Plainsboro, New Jersey 08536


Investment Adviser for OSM - QM Active Balanced Fund, OSM - Jennison Growth
Fund, OSM - Salomon Brothers All Cap Fund and OSM - Gartmore Millennium
Growth Fund II

      OppenheimerFunds, Inc.
      498 Seventh Avenue
      New York, New York 10018

Distributor
      OppenheimerFunds Distributor, Inc.
      498 Seventh Avenue
      New York, New York 10018

Transfer Agent
      OppenheimerFunds Services

      P.O. Box 5270 Denver, Colorado 80217 1.800.CALL.OPP (225.5677)


Custodian Bank for the Funds

      Citibank, N.A.
      111 Wall Street
      New York, New York 10005

Custodian Bank for Master Focus Twenty Trust

      The Bank of New York
      23 William Street
      New York, New York 10286


Custodian Bank for the S&P 500 Index Series of the Quantitative
Master Series

Trust
      Merrill Lynch Trust Company
      800 Scudders Mill Road
      Plainsboro, New Jersey 08536

Independent Auditors
      Deloitte & Touche LLP
      555 Seventeenth Street
      Denver, Colorado  80202


Counsel to the Funds                      Counsel to the Independent Trustees
      Myer, Swanson, Adams & Wolf, P.C. Mayer, Brown, Rowe & Maw
      1600 Broadway                             1675 Broadway
      Denver, Colorado 80202                    New York, New York 10019


PX0000.0303


- --------
1. In accordance with Rule 12b-1 of the Investment Company Act, the term
"Independent Trustees" in this Statement of Additional Information refers to
those Trustees who are not "interested persons" of the Fund and who do not have
any direct or indirect financial interest in the operation of the distribution
plan or any agreement under the plan.
Certain waivers also apply to Class M shares of Oppenheimer Convertible
Securities Fund.
2 In the case of Oppenheimer Senior Floating Rate Fund, a
continuously-offered closed-end fund, references to contingent deferred sales
charges mean the Fund's Early Withdrawal Charges and references to "redemptions"
mean "repurchases" of shares.
3 An "employee benefit plan" means any plan or arrangement, whether or not it is
"qualified" under the Internal Revenue Code, under which Class N shares of an
Oppenheimer fund or funds are purchased by a fiduciary or other administrator
for the account of participants who are employees of a single employer or of
affiliated employers. These may include, for example, medical savings accounts,
payroll deduction plans or similar plans. The fund accounts must be registered
in the name of the fiduciary or administrator purchasing the shares for the
benefit of participants in the plan.
4 The term "Group Retirement Plan" means any qualified or non-qualified
retirement plan for employees of a corporation or sole proprietorship, members
and employees of a partnership or association or other organized group of persons
(the members of which may include other groups), if the group has made special
arrangements with the Distributor and all members of the group participating in
(or who are eligible to participate in) the plan purchase shares of an
Oppenheimer fund or funds through a single investment dealer, broker or other
financial institution designated by the group. Such plans include 457 plans,
SEP-IRAs, SARSEPs, SIMPLE plans and 403(b) plans other than plans for public
school employees. The term "Group Retirement Plan" also includes qualified
retirement plans and non-qualified deferred compensation plans and IRAs that
purchase shares of an Oppenheimer fund or funds through a single investment
dealer, broker or other financial institution that has made special arrangements
with the Distributor.
5 However, that concession will not be paid on purchases of shares in amounts of
$1 million or more (including any right of accumulation) by a Retirement Plan
that pays for the purchase with the redemption proceeds of Class C shares of one
or more Oppenheimer funds held by the Plan for more than one year.
6 This provision does not apply to IRAs.
7 This provision does not apply to 403(b)(7) custodial plans if the participant
is less than age 55, nor to IRAs.
8 The distribution must be requested prior to
Plan termination or the elimination of the Oppenheimer funds as an investment
option under the Plan.
9 This provision does not apply to IRAs.
10 This provision does not apply to loans from 403(b)(7) custodial plans and
loans from the OppenheimerFunds-sponsored Single K retirement plan. 11 This
provision does not apply to 403(b)(7) custodial plans if the participant is less
than age 55, nor to IRAs.

EX-99

                         OPPENHEIMER MIDCAP FUND
                Supplement dated February 11, 2003 to the
                  Statement of Additional Information
                           dated December 23, 2002


The Statement of Additional Information is changed as follows:

1.    The fourth paragraph on page 11, titled  "Futures," is replaced with the
   following:

         The Fund can buy and sell futures contracts that relate to (1) stock
         indices (these are referred to as "stock index futures"), (2) an
         individual stock ("single stock futures"), (3) foreign currencies
         (these are referred to as "forward contracts"), and (4) commodities
         (these are referred to as "commodity futures").

2.    In the section  titled  "Futures" on page 11, the  following is added as
   the third  paragraph:

         A single stock future obligates the seller to deliver (and the
         purchaser to take) cash or a specified equity security to settle the
         futures transaction. Either party could also enter into an
         offsetting contract to close out the position. Single stock futures
         trade on a very limited number of exchanges, with contracts
         typically not fungible among the exchanges.




February 11, 2003                                                 PX0745.016

Oppenheimer
MidCap Fund

Prospectus dated December 23, 2002


                                          Oppenheimer MidCap Fund is a mutual
                                          fund that seeks capital appreciation
                                          to make your investment grow.  It
                                          emphasizes investments in common
                                          stocks of growth companies having a
                                          market capitalization between $2
                                          billion and $11.5 billion.
                                             This Prospectus contains
                                          important information about the
                                          Fund's objective, its investment
                                          policies, strategies and risks.  It
                                          also contains important information
                                          about how to buy and sell shares of
                                          the Fund and other account
                                          features.  Please read this
                                          Prospectus carefully before you
As with all mutual funds, the             invest and keep it for future
Securities and Exchange Commission        reference about your account.
has not approved or disapproved the
Fund's securities nor has it
determined that this Prospectus is
accurate or complete. It is a
criminal offense to represent
otherwise.


                  1234

Contents

            ABOUT THE FUND
- ------------------------------------------------------------------------------

            The Fund's Investment Objective and Strategies

            Main Risks of Investing in the Fund

            The Fund's Past Performance

            Fees and Expenses of the Fund

            About the Fund's Investments

            How the Fund is Managed

            ABOUT YOUR ACCOUNT
- ------------------------------------------------------------------------------

            How to Buy Shares
            Class A Shares
            Class B Shares
            Class C Shares
            Class N Shares
            Class Y Shares

            Special Investor Services
            AccountLink
            PhoneLink
            OppenheimerFunds Internet Website
            Retirement Plans

            How to Sell Shares
            By Mail
            By Telephone

            How to Exchange Shares

            Shareholder Account Rules and Policies

            Dividends, Capital Gains and Taxes

            Financial Highlights

ABOUT THE FUND

The Fund's Investment Objective and Strategies
WHAT IS THE FUND'S INVESTMENT OBJECTIVE? The Fund seeks capital appreciation.

WHAT DOES THE FUND MAINLY INVEST IN? The Fund invests mainly in equity
securities, such as common and preferred stocks, and securities convertible
into common stock.  It invests primarily in equity securities of U.S.
companies, but can also buy foreign stocks.  Under normal market conditions,
the Fund invests at least 80% of its net assets (plus borrowings for
investment purposes) in equity securities of growth companies that have a
market capitalization of between $2 billion and $11.5 billion (referred to as
"mid-cap"stocks).   The Fund may invest its assets in a variety of industry
categories, although it may from time to time emphasize investments in one or
more industries.  For example, the Fund has, at certain times, invested a
significant amount of its assets in technology companies.  A technology
company is defined as a company using, producing and/or developing technology
products.  The types of companies the Fund's investment advisor,
OppenheimerFunds, Inc. (the "Manager") considers to be technology companies
can be expected to change over time as developments in technology occur.

HOW DOES THE PORTFOLIO MANAGER DECIDE WHAT SECURITIES TO BUY OR SELL?  In
selecting securities for the Fund, the Fund's portfolio manager looks for
high-growth companies using a "bottom-up" stock selection process.  The
"bottom-up" approach focuses on fundamental analysis of individual issuers
before considering overall economic, market or industry trends.  The stock
selection process includes analysis of other business and economic factors
that might contribute to the company's stock appreciation.  The portfolio
manager also looks for companies with revenues growing at above-average rates
that might support and sustain above-average earnings, and companies whose
revenue growth is primarily driven by strength in unit volume sales.  While
this process and the inter-relationship of the factors used may change over
time, and its implementation may vary in particular cases, the portfolio
manager currently searches primarily for stocks of companies having the
following characteristics:

o     Market capitalization between $2 billion and $11.5 billion;
o     What the portfolio manager believes to be a high rate of sustainable
   earnings growth;
o     Revenue growth the portfolio manager expects to be at a rate greater
         than 10% annually;
o     Established companies that are well-positioned to take advantage of
         product or technology advances in their industry or related growth
         sector.

      If the portfolio manager discerns a slowdown in the company's internal
revenue growth or earnings growth or a negative movement in the company's
fundamental economic condition, he will consider selling that stock if there
are other investment alternatives that offer what he believes to be better
appreciation possibilities.

WHO IS THE FUND DESIGNED FOR?  The Fund is designed primarily for investors
seeking capital growth in their investment over the long term.  Those
investors should be willing to assume the greater risks of short-term share
price fluctuations that are typical for an aggressive growth fund focusing on
mid-cap stock investments.  The Fund does not seek current income and the
income from its investments will likely be small.  It is not designed for
investors needing current income or preservation of capital.  Because of its
focus on long-term growth, the Fund may be appropriate for some portion of a
retirement plan investment for investors with a high risk tolerance. However,
the Fund is not a complete investment program.

Main Risks of Investing in the Fund

All investments have risks to some degree.  The Fund's investments in stocks
are subject to changes in their value from a number of factors described
below.  There is also the risk that poor security selection by the Manager
will cause the Fund to underperform other funds having similar objectives.

RISKS OF INVESTING IN STOCKS.  Stocks fluctuate in price, and their
short-term volatility at times may be great.  Because the Fund invests
primarily in common stocks, the value of the Fund's portfolio will be
affected by changes in the stock markets and the special economic and other
factors that might primarily affect the prices of mid-cap stocks in the
market.  Market risk will affect the Fund's net asset value per share, which
will fluctuate as the values of the Fund's portfolio securities change.  A
variety of factors can affect the price of a particular stock and the prices
of individual stocks do not all move in the same direction uniformly or at
the same time.  Different stock markets may behave differently from each
other.

      Other factors can affect a particular stock's price, such as poor
earnings reports by the issuer, loss of major customers, major litigation
against the issuer, or changes in government regulations affecting the issuer
or its industry.

Industry and Sector Focus. At times the Fund may increase the relative
      emphasis of its investments in a particular industry or sector. The
      prices of stocks of issuers in a particular industry or sector may go
      up and down in response to changes in economic conditions, government
      regulations, availability of basic resources or supplies, or other
      events that affect that industry or sector more than others. To the
      extent that the Fund increases the relative emphasis of its investments
      in a particular industry or sector, its share values may fluctuate in
      response to events affecting that industry or sector.

Risks of Growth Stocks. Stocks of growth companies, particularly newer
      companies, may offer opportunities for greater long-term capital
      appreciation but may be more volatile than stocks of larger, more
      established companies. They have greater risks if the company's
      earnings growth or stock price fails to increase as expected.
Risks of Technology Stocks.  To the extent the Fund is invested in stocks of
     technology companies, the value of the Fund's shares is particularly
     vulnerable to risks affecting technology companies and/or companies
     having investments in technology, including market and economic events
     that affect those technology companies.  The technology sector has
     historically exhibited great fluctuations in valuations. We take this
     into account when evaluating the long-term merits of our investments.

     The stock prices of technology companies during the past few years have
     been highly volatile, largely due to the rapid pace of product change
     and development within this sector.  This phenomenon may also result in
     future stock price volatility. In addition, technologies that are
     dependent on consumer demand may be more sensitive to changes in
     consumer spending patterns. Technology companies focusing on the
     information and telecommunications sectors may also be subject to
     international, federal and state regulations and may be adversely
     affected by changes in those regulations.

SPECIAL RISKS OF MID-CAP STOCKS.  While stocks of mid-cap companies may offer
greater capital appreciation potential than investments in larger
capitalization companies, they may also present greater risks.  Mid-cap
stocks tend to be more sensitive to changes in an issuer's earnings
expectations.  They tend to have lower trading volumes than large
capitalization securities. As a result, they may experience more abrupt and
erratic price movements.

      Since mid-cap companies typically reinvest a high proportion of
earnings in their own businesses, they may lack the dividend yield that can
help cushion their total return in a declining market.  Many mid-cap stocks
are traded in over-the-counter markets and therefore may be less liquid than
stocks of larger exchange-traded issuers.  That means the Fund could have
greater difficulty selling a security at an acceptable price, especially in
periods of market volatility.  That factor increases the potential for losses
to the Fund.

HOW RISKY IS THE FUND OVERALL? The risks described above collectively form
the overall risk profile of the Fund, and can affect the value of the Fund's
investments, its investment performance and its prices per share.  Particular
investments and investment strategies also have risks.  These risks mean that
you can lose money by investing in the Fund.  When you redeem your shares,
they may be worth more or less than what you paid for them.  There is no
assurance that the Fund will achieve its investment objective.  The Fund
focuses its investments on mid-cap equity securities for long-term growth,
and in the short term, they can be volatile. The price of the Fund's shares
can go up and down substantially. The Fund generally does not use
income-oriented investments to help cushion the Fund's total return from
changes in stock prices, except for defensive purposes. In the
OppenheimerFunds spectrum, the Fund is an aggressive investment vehicle,
designed for investors willing to assume greater risks in the hope of
achieving greater gains.  In the short-term the Fund may be less volatile
than small-cap and emerging markets stock funds, but it may be subject to
greater fluctuations in its share prices than funds that emphasize large
capitalization stocks, or funds that focus on both stocks and bonds.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.

The Fund's Past Performance

The bar chart and table below show one measure of the risks of investing in
the Fund, by showing the Fund's performance (for its Class A shares) from
year to year for the full calendar years since the Fund's inception and by
showing how the average annual total returns of the Fund's shares, both
before and after taxes, compare to those of a broad-based market index.

      The after-tax returns are shown for Class A shares only and are
calculated using the historical highest individual federal marginal income
tax rates in effect during the periods shown, and do not reflect the impact
of state or local taxes.  The after-tax returns for the other classes of
shares will vary. In certain cases, the figure representing "Return After
Taxes on Distributions and Sale of Fund Shares" may be higher than the other
return figures for the same period. A higher after-tax return results when a
capital loss occurs upon redemption and translates into an assumed tax
deduction that benefits the shareholder. The after-tax returns are calculated
based on certain assumptions mandated by regulation and your actual after-tax
returns may differ from those shown, depending on your individual tax
situation.  The after-tax returns set forth below are not relevant to
investors who hold their fund shares through tax-deferred arrangements such
as 401(k) plans or IRAs or to institutional investors not subject to tax. The
Fund's past investment performance, before and after taxes, is not
necessarily an indication of how the Fund will perform in the future.

            Annual Total Returns (Class A) (as of 12/31 each year)

    [See appendix to prospectus for data in bar chart showing annual total
                                   returns]

Sales  charges  and taxes are not  included in the  calculations  of return in
this bar chart, and if those charges and taxes were included,  the returns may
be less than those shown.
For the period  from  1/1/02  through  9/30/02,  the  cumulative  return  (not
annualized) before taxes for Class A shares was -29.32%.
During the period shown in the bar chart,  the highest return (not annualized)
before  taxes for a  calendar  quarter  was  43.43%  (4Qtr `99) and the lowest
return (not annualized)  before taxes for a calendar quarter was -32.06% (4Qtr
`00).

- ------------------------------------------------------------------
Average Annual Total Returns
- ------------------------------                      5 Years
for    the    periods    ended                    (or life of
December 31, 2001                  1 Year       class, if less)
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Class  A   Shares   (inception
12/1/97)                           -37.92%           9.55%
  Return Before Taxes              -37.92%           9.54%
  Return After Taxes on
  Distributions                    -23.09%           7.83%
  Return    After   Taxes   on
  Distributions  and  Sale  of
  Fund Shares
- ------------------------------------------------------------------
S&P MidCap 400 Index
(reflects no deduction for
fees, expenses or taxes)           -0.62%           13.18%1
- ------------------------------------------------------------------
Class  B   Shares   (inception     -37.86%           10.00%
12/1/97)
- ------------------------------------------------------------------
Class  C   Shares   (inception     -35.29%           10.35%
12/1/97)
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Class  N   Shares   (inception N/A2            N/A2
3/1/01)
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Class  Y   Shares   (inception     -33.87%           11.68%
12/1/97)
- ------------------------------------------------------------------
1  From 11/30/97.
2  Because this is a new class of shares, return data for the period
specified is not available.

The Fund's average annual total returns include applicable sales charges: for
Class A, the current maximum initial sales charge of 5.75%; for Class B, the
contingent deferred sales charge of 5% (1-year) and 3% (life of class); and
for Class C, the 1% contingent deferred sales charge for the 1-year period.
There is no sales charge for Class Y shares. The returns measure the
performance of a hypothetical account and assume that all dividends and
capital gains distributions have been reinvested in additional shares. The
performance of the Fund's Class A shares is compared to the S&P Midcap 400
Index, an unmanaged index of midcap equity securities. The index performance
includes reinvestment of income but does not reflect transaction costs. The
Fund's investments vary from those in the index.

Fees and Expenses of the Fund

The following tables are provided to help you understand the fees and
expenses you may pay if you buy and hold shares of the Fund. The Fund pays a
variety of expenses directly for management of its assets, administration,
distribution of its shares and other services. Those expenses are subtracted
from the Fund's assets to calculate the Fund's net asset values per share.
All shareholders therefore pay those expenses indirectly.  Shareholders pay
other transaction expenses directly, such as sales charges. The numbers below
are based on the Fund's expenses during its fiscal year ended October 31,
2002.

Shareholder Fees (charges paid directly from your investment):

- -------------------------------------------------------------------------------
                      Class A    Class B    Class C     Class N     Class Y
                      Shares     Shares     Shares      Shares      Shares
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Maximum Sales Charge
(Load) on purchases   5.75%      None       None        None        None
(as % of offering
price)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Maximum Deferred
Sales
Charge (Load) (as %   None1      5%2        1%3         1%4         None
of the
lower of the
original offering
price or redemption
proceeds)
- -------------------------------------------------------------------------------
1.    A contingent deferred sales charge may apply to redemptions of
   investments of $1 million or more ($500,000 for certain retirement plan
   accounts) of Class A shares. See "How to Buy Shares" for details.
2.    Applies to redemptions in first year after purchase. The contingent
   deferred sales charge declines to 1% in the sixth year and is eliminated
   after that.
3.    Applies to shares redeemed within 12 months of purchase.
4.    Applies to shares redeemed within 18 months of retirement plan's first
purchase of Class N Shares.

Annual Fund Operating Expenses (deducted from Fund assets):
(% of average daily net assets)

 -------------------------------------------------------------------------------
                                  Class A  Class B  Class C   Class N  Class Y
                                  Shares   Shares   Shares    Shares   Shares
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Management Fees                   0.69%    0.69%     0.69%    0.69%    0.69%
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Distribution and/or Service       0.23%    1.00%     1.00%    0.50%     N/A
 (12b-1)Fees
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Other Expenses                    0.76%    0.79%     0.78%    0.68%    0.14%
 -------------------------------------------------------------------------------
 -------------------------------------------------------------------------------
 Total Annual Operating Expenses   1.68%    2.48%     2.47%    1.87%    0.83%
 -------------------------------------------------------------------------------
  The management fee rate was reduced, effective March 1, 2002, as described
  below in "How the Fund is Managed - The Manager - The Manager's Fee."
  Expenses may vary in future years. "Other Expenses" include transfer agent
  fees, custodial expenses, and accounting and legal expenses the Fund pays.
  The "Other Expenses" in the table are based on, among other things, the
  fees the Fund would have paid if the transfer agent had not waived a
  portion of its fee under a voluntary undertaking to the Fund to limit these
  fees to 0.25% of average daily net assets per fiscal year for Class Y
  shares and 0.35% of average daily net assets per fiscal year for all other
  classes.  That undertaking may be amended or withdrawn at any time.  After
  the waiver, the actual "Other Expenses" and "Total Annual Operating
  Expenses" as percentages of average daily net assets were 0.55% and 1.47%
  for Class A shares, 0.58% and 2.27% for Class B shares, 0.57% and 2.26% for
  Class C shares, 0.47% and 1.66% for Class N shares, and 0.14% and 0.83%,
  respectively for Class Y shares.  Effective November 1, 2002, the limit on
  transfer agent fees for Class Y shares increased to 0.35% of average daily
  net assets per fiscal year.  Had that limit been in effect during the
  Fund's prior fiscal year, the transfer agent fees would not have exceeded
  the expense limitation described above.

EXAMPLES.  The following examples are intended to help you compare the cost
of investing in the Fund with the cost of investing in other mutual funds.
The examples assume that you invest $10,000 in a class of shares of the Fund
for the time periods indicated and reinvest your dividends and distributions.

      The first example assumes that you redeem all of your shares at the end
of those periods. The second example assumes that you keep your shares.  Both
examples also assume that your investment has a 5% return each year and that
the class's operating expenses remain the same. Your actual costs may be
higher or lower because expenses will vary over time. Based on these
assumptions your expenses would be as follows:

 ------------------------------------------------------------------------------
 If shares are redeemed:  1 Year       3 Years       5 Years       10 Years
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class A Shares           $736         $1,074        $1,435        $2,448
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class B Shares           $751         $1,073        $1,521        $2,4381
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class C Shares           $350         $770          $1,316        $2,806
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class N Shares           $290         $588          $1,011        $2,190
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class Y Shares           $85          $265          $460          $1,025
 ------------------------------------------------------------------------------

 ------------------------------------------------------------------------------
 If shares are not        1 Year       3 Years       5 Years       10 Years
 redeemed:
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class A Shares           $736         $1,074        $1,435        $2,448
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class B Shares           $251         $773          $1,321        $2,4381
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class C Shares           $250         $770          $1,316        $2,806
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class N Shares           $190         $588          $1,011        $2,190
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Class Y Shares           $85          $265          $460          $1,025
 ------------------------------------------------------------------------------
  In the first example, expenses include the initial sales charge for Class A
  and the applicable Class B,  Class C or Class N contingent deferred sales
  charges. In the second example, the Class A expenses include the sales
  charge, but Class B, Class C and Class N expenses do not include the
  contingent deferred sales charges. There is no sales charge on Class Y
  shares.
  1.  Class B expenses for years 7 through 10 are based on Class A expenses,
    since Class B shares automatically convert to Class A shares 72 months
    after purchase.

About the Fund's Investments

THE FUND'S PRINCIPAL INVESTMENT POLICIES.  The allocation of the Fund's
portfolio among different investments will vary over time based upon the
Manager's evaluation of economic and market trends.  The Fund's portfolio
might not always include all of the different types of investments described
in this prospectus.  The Statement of Additional Information contains more
detailed information about the Fund's investment policies and risks.

      The Manager tries to reduce risks by carefully researching securities
before they are purchased, and in some cases by using hedging techniques.
The Fund attempts to reduce its exposure to market risks by diversifying its
investments, that is, by not holding a substantial percentage of the stock of
any one company and by not investing too great a percentage of the Fund's
assets in any one company.  Also, the Fund does not concentrate 25% or more
of its investments in companies in any one industry.

      However, changes in the overall market prices of securities can occur
at any time. The share prices of the Fund will change daily based on changes
in market prices of securities and market conditions, and in response to
other economic events.

Mid-Cap Stock Investments.  Mid-cap companies are those that have completed
      their initial start-up cycle, and in many cases have established
      markets and developed seasoned management teams. The portfolio manager
      searches for stocks of mid-cap companies that have the financial
      stability approximating that of larger companies and the high growth
      potential associated with smaller companies.  The portfolio manager
      will not normally invest in stocks of companies in "turnaround"
      situations until the company's operating characteristics have improved.

      In general, growth companies tend to retain a large part of their
      earnings for research, development or investment in capital assets.
      Therefore, they do not tend to emphasize paying dividends, and may not
      pay any dividends for some time.  They are selected for the Fund's
      portfolio because the Manager believes the price of the stock will
      increase over the long term.

      The Fund's investments are not limited only to mid-cap issuers, and
      under normal market conditions the Fund can invest up to 20%  of its
      net assets (plus borrowings for investment purposes) in stocks of
      companies in other market capitalizations, if the Manager believes they
      offer opportunities for growth.

      The Fund measures the market capitalization of an issuer at the time of
      investment to determine if it fits within the Fund's mid-cap
      definition.  Because the relative sizes of companies change over time
      as the stock market changes, the Fund's definition of what is a
      "mid-cap" company may change over time as well.  Also, as individual
      companies grow, they may no longer fit within the Fund's definition of
      a "mid-cap" issuer after the Fund buys their stock.  While the Fund is
      not required to sell stocks of companies whose market capitalizations
      grow beyond the Fund's mid-cap definition, the Manager might sell some
      of those holdings to try to lower the median capitalization of its
      portfolio (measured on a dollar weighted basis).  This could cause the
      Fund to realize capital gains on its investments, which could increase
      taxable distributions to shareholders.  Of course, there is no
      assurance that mid-cap stocks will grow in value.

Cyclical Opportunities.  The Fund may also seek to take advantage of changes
      in the business cycle by investing in companies that are sensitive to
      those changes if the Manager believes they have growth potential.  For
      example, when the economy is expanding, companies in the consumer
      cyclicals and technology sectors may benefit and offer long-term growth
      opportunities. The Fund focuses on seeking growth over the long term,
      but may seek to take tactical advantage of short-term market movements
      or events affecting particular issuers or industries.

CAN THE FUND'S INVESTMENT OBJECTIVE AND POLICIES CHANGE?  The Fund's Board of
Trustees can change non-fundamental investment policies without shareholder
approval, although significant changes will be described in amendments to
this Prospectus.  Fundamental policies are those that cannot be changed
without the approval of a majority of the Fund's outstanding voting shares.
The Fund's objective is a fundamental policy.  Other Investment restrictions
that are fundamental policies are listed in the Statement of Additional
Information. An investment policy or technique is not fundamental unless this
Prospectus or the Statement of Additional Information says that it is.

OTHER INVESTMENT STRATEGIES.  To seek its objective, the Fund can also use
the investment techniques and strategies described below.  The Manager might
not always use all of the different types of techniques and investments
described below.  These techniques have certain risks, although some are
designed to help reduce overall investment or market risks.

Other Equity Securities.  While the Fund emphasizes investments in common
      stocks, it can also buy preferred stocks, warrants and securities
      convertible into common stock.  The Manager considers some convertible
      securities to be "equity equivalents" because of the conversion feature
      and in that case their rating has less impact on the investment
      decision than in the case of other debt securities.

      The Fund will not invest more than 5% of its net assets in convertible
      securities that are rated below investment grade by a nationally
      recognized rating organization such as Moody's Investors Service or
      that are assigned a comparable rating by the Manager.  "Investment
      grade" securities are debt securities in the four highest ratings
      categories of ratings organizations or unrated securities assigned a
      comparable rating by the Manager.  Lower-grade securities may be
      subject to greater market fluctuations and risks of loss of income and
      principal and have less liquidity than investments in investment-grade
      securities.  Debt securities are subject to credit risk (the risk that
      the issuer will not make timely payments of interest and principal) and
      interest rate risk (the risk that the value of the security will fall
      if interest rates rise).

Investing in Small, Unseasoned Companies.  The Fund can invest in small,
      unseasoned companies. These are companies that have been in operation
      less than three years, including the operations of any predecessors.
      These securities may have limited liquidity, which means that the Fund
      might not be able to sell them quickly at an acceptable price.  Their
      prices may be very volatile, especially in the short term.

Foreign Investing.  The Fund can buy securities in any country, including
      developed countries and emerging markets.  The Fund has no limits on
      the amount of its assets that can be invested in foreign securities,
      but has adopted an operating policy limiting its investments in foreign
      securities to 10% of its total assets.  It does not expect to invest
      substantial amounts of its assets in foreign stocks.

Special Risks of Foreign Investing.  While foreign securities may offer
      special investment opportunities, there are also special risks.  The
      change in value of a foreign currency against the U.S. dollar will
      result in a change in the U.S. dollar value of securities denominated
      in that foreign currency.  Foreign issuers are not subject to the same
      accounting and disclosure requirements that U.S. companies are subject
      to.  The value of foreign investments may be affected by exchange
      control regulations, expropriation or nationalization of a company's
      assets, foreign taxes, delays in settlement of transactions, changes in
      governmental economic or monetary policy in the U.S. or abroad, or
      other political and economic factors.  Securities in underdeveloped
      countries may be more difficult to sell and their prices may be more
      volatile.  These risks could cause the prices of foreign stocks to fall
      and could therefore decrease the Fund's share prices.

Illiquid and Restricted Securities.  Investments may be illiquid because they
      do not have an active trading market, making it difficult to value them
      or dispose of them promptly at an acceptable price.  Restricted
      securities may have terms that limit their resale to other investors or
      to any required registration under applicable securities laws before
      they may be sold publicly.  The Fund will not invest more than 15% of
      its net assets in illiquid or restricted securities. That percentage
      limitation is not a fundamental policy.  Certain restricted securities
      that are eligible for resale to qualified institutional purchasers may
      not be subject to that limit. The Manager monitors holdings of illiquid
      securities on an ongoing basis to determine whether to sell any
      holdings to maintain adequate liquidity.

Derivative Investments. The Fund can invest in a number of different kinds of
      "derivative" investments.  In general terms, a derivative investment is
      an investment contract whose value depends on (or is derived from) the
      value of an underlying asset, interest rate or index.  In the broadest
      sense, options, futures contracts, and other hedging instruments the
      Fund might use may be considered "derivative" investments.  In addition
      to using derivatives for hedging, the Fund might use other derivative
      investments because they offer the potential for increased value.  The
      Fund currently does not use derivatives to a significant degree and is
      not required to use them in seeking its objective.

      Derivatives have special risks.  If the issuer of the derivative
      investment does not pay the amount due, the Fund can lose money on the
      investment.  The underlying security or investment on which the
      derivative is based, and the derivative itself, may not perform the way
      the Manager expected it to perform.  Interest rate and stock market
      changes in the U.S. and abroad may also influence the performance of
      derivatives.  As a result of these risks the Fund could realize less
      principal or income from the investment than expected or its hedge
      might be unsuccessful.  If that happens, the Fund's share prices could
      fall.  Certain derivative investments held by the Fund may be
      illiquid.

o     Hedging.  The Fund can buy and sell certain kinds of futures contracts,
      put and call options and forward contracts. These are all referred to
      as "hedging instruments."  The Fund does not currently use hedging
      extensively and is not required to do so to seek its objective. It does
      not use hedging instruments for speculative purposes.  It has limits on
      the extent of its use of hedging and the types of hedging instruments
      that it can use.

     Some of  these  strategies  could  be used to hedge  the  Fund's  portfolio
     against  price  fluctuations.  Other  hedging  strategies,  such as  buying
     futures  and call  options,  could  increase  the  Fund's  exposure  to the
     securities  market.  Forward contracts can be used to try to manage foreign
     currency risks on the Fund's foreign investments.  Foreign currency options
     can be used to try to  protect  against  declines  in the  dollar  value of
     foreign  securities the Fund owns, or to protect against an increase in the
     dollar cost of buying foreign securities.

      There are also special risks in particular hedging strategies.  Options
      trading involves the payment of premiums and has special tax effects on
      the Fund.  If the Manager used a hedging instrument at the wrong time
      or judged market conditions incorrectly, the hedge might fail and the
      strategy could reduce the Fund's return.  The Fund could also
      experience losses if the prices of its futures and options positions
      were not correlated with its other investments or if it could not close
      out a position because of an illiquid market.

Portfolio Turnover.  The Fund can engage in active and frequent short-term
      trading to try to achieve its objective.  It might have a portfolio
      turnover rate in excess of 100% annually.  Portfolio turnover increases
      brokerage costs the Fund pays (and reduces performance). If the Fund
      realizes capital gains when it sells its portfolio investments,
      generally it must pay out those gains to shareholders, increasing their
      taxable distributions.  The Financial Highlights table at the end of
      this prospectus shows the Fund's portfolio turnover rates during past
      fiscal years.

Temporary Defensive and Interim Investments.  In times of adverse or unstable
      market, economic or political conditions, the Fund can invest up to
      100% of its assets in temporary defensive investments that are
      inconsistent with the Fund's principal investment strategies. Generally
      they would be cash equivalents (such as commercial paper), money market
      instruments, short-term debt securities, U.S. government securities, or
      repurchase agreements.  They could include other investment grade debt
      securities.  The Fund might also hold these types of securities pending
      the investment of proceeds from the sale of Fund shares or portfolio
      securities or to meet anticipated redemptions of Fund shares. To the
      extent the Fund invests defensively in these securities, it might not
      achieve its investment objective of capital appreciation.

How the Fund Is Managed

THE MANAGER.  The Manager chooses the Fund's investments and handles its
day-to-day business. The Manager carries out its duties, subject to the
policies established by the Fund's Board of Trustees, under an investment
advisory agreement that states the Manager's responsibilities.  The agreement
sets the fees the Fund pays to the Manager and describes the expenses that
the Fund is responsible to pay to conduct its business.

     The Manager has been an investment advisor since January 1960. The
Manager and its subsidiaries and controlled affiliates managed more than $120
billion in assets as of September 30, 2002, including other Oppenheimer funds
with more than 7 million shareholder accounts. The Manager is located at 498
Seventh Avenue, New York, New York 10018.

Portfolio Manager.  The portfolio manager of the Fund is Bruce Bartlett who
      is principally responsible for the day-to-day management of the Fund's
      portfolio.  Mr. Bartlett has been the Fund's portfolio manager since
      April 1, 1998, and is a Senior Vice President of the Manager since
      January 1999. He is also an officer and portfolio manager of other
      Oppenheimer funds.  Mr. Bartlett joined the Manager as a portfolio
      manager for other funds in 1995.

Advisory Fees.   Under the investment advisory agreement, effective March 1,
      2002, the Fund pays the Manager an advisory fee at an annual rate that
      declines on additional assets as the Fund grows: 0.75% of the first
      $200 million of average annual net assets of the Fund; 0.72% of the
      next $200 million; 0.69% of the next $200 million; 0.66% of the next
      $200 million; 0.60% of the next $700 million; 0.58% of the next $1
      billion and 0.56% of average annual net assets in excess of $2.5
      billion. Prior to March 1, 2002, the annual advisory fee rate was:
      0.75% of the first $200 million of average annual net assets of the
      Fund; 0.72% of the next $200 million; 0.69% of the next $200 million;
      0.66% of the next $200 million; and 0.60% of average annual net assets
      in excess of $800 million. The Fund's management fee for the fiscal
      year ended October 31, 2002 was 0.69% of average annual net assets for
      each class of shares.

A B O U T Y O U R A C C O U N T

How to Buy Shares

You can buy shares several ways, as described below. The Fund's Distributor,
OppenheimerFunds Distributor, Inc., may appoint servicing agents to accept
purchase (and redemption) orders. The Distributor, in its sole discretion,
may reject any purchase order for the Fund's shares.

Buying Shares Through Your Dealer. You can buy shares through any dealer,
      broker or financial institution that has a sales agreement with the
      Distributor. Your dealer will place your order with the Distributor on
      your behalf.
Buying Shares Through the Distributor. Complete an OppenheimerFunds New
      Account Application and return it with a check payable to
      "OppenheimerFunds Distributor, Inc." Mail it to P.O. Box 5270, Denver,
      Colorado 80217. If you don't list a dealer on the application, the
      Distributor will act as your agent in buying the shares. However, we
      recommend that you discuss your investment with a financial advisor
      before you make a purchase to be sure that the Fund is appropriate for
      you.
o     Paying by Federal Funds Wire. Shares purchased through the Distributor
      may be paid for by Federal Funds wire. The minimum investment is
      $2,500. Before sending a wire, call the Distributor's Wire Department
      at 1.800.225.5677 to notify the Distributor of the wire and to receive
      further instructions.
o     Buying Shares Through OppenheimerFunds AccountLink. With AccountLink,
      you pay for shares by electronic funds transfers from your bank
      account. Shares are purchased for your account by a transfer of money
      from your bank account through the Automated Clearing House (ACH)
      system. You can provide those instructions automatically, under an
      Asset Builder Plan, described below, or by telephone instructions using
      OppenheimerFunds PhoneLink, also described below. Please refer to
      "AccountLink," below for more details.
o     Buying Shares Through Asset Builder Plans. You may purchase shares of
      the Fund automatically each month from your account at a bank or other
      financial institution under an Asset Builder Plan with AccountLink.
      Details are in the Asset Builder Application and the Statement of
      Additional Information.

WHAT IS THE MINIMUM AMOUNT YOU MUST INVEST? In most cases, you can buy Fund
shares with a minimum initial investment of $1,000 and make additional
investments at any time with as little as $50. There are reduced minimums
available under the following special investment plans:
o     If you establish one of the many types of retirement plan accounts that
      OppenheimerFunds offers, more fully described below under "Special
      Investor Services," you can start your account with as little as $500.
o     By using an Asset Builder Plan or Automatic Exchange Plan (details are
      in the Statement of Additional Information), or government allotment
      plan, you can make subsequent investments (after making the initial
      investment of $500) for as little as $50. For any type of account
      established under one of these plans prior to November 1, 2002, the
      minimum additional investment will remain $25.
o     The minimum investment requirement does not apply to reinvesting
      dividends from the Fund or other Oppenheimer funds (a list of them
      appears in the Statement of Additional Information, or you can ask your
      dealer or call the Transfer Agent), or reinvesting distributions from
      unit investment trusts that have made arrangements with the Distributor.

AT WHAT PRICE ARE SHARES SOLD? Shares are sold at their offering price which
is the net asset value per share plus any initial sales charge that applies.
The offering price that applies to a purchase order is based on the next
calculation of the net asset value per share that is made after the
Distributor receives the purchase order at its offices in Colorado, or after
any agent appointed by the Distributor receives the order.

Net Asset Value. The Fund calculates the net asset value of each class of
      shares as of the close of The New York Stock Exchange, on each day the
      Exchange is open for trading (referred to in this Prospectus as a
      "regular business day"). The Exchange normally closes at 4:00 P.M.,
      Eastern time, but may close earlier on some days. All references to
      time in this Prospectus mean "Eastern time."

      The net asset value per share is determined by dividing the value of
      the Fund's net assets attributable to a class by the number of shares
      of that class that are outstanding. To determine net asset value, the
      Fund's Board of Trustees has established procedures to value the Fund's
      securities, in general, based on market value. The Board has adopted
      special procedures for valuing illiquid and restricted securities and
      obligations for which market values cannot be readily obtained. Because
      some foreign securities trade in markets and on exchanges that operate
      on weekends and U.S. holidays, the values of some of the Fund's foreign
      investments may change on days when investors cannot buy or redeem Fund
      shares.

      If, after the close of the principal market on which a security held by
      the Fund is traded, and before the time the Fund's securities are
      priced that day, an event occurs that the Manager deems likely to cause
      a material change in the value of such security, the Fund's Board of
      Trustees has authorized the Manager, subject to the Board's review, to
      ascertain a fair value for such security.  A security's valuation may
      differ depending on the method used for determining value.

The Offering Price. To receive the offering price for a particular day, in
      most cases the Distributor or its designated agent must receive your
      order by the time The New York Stock Exchange closes that day. If your
      order is received on a day when the Exchange is closed or after it has
      closed, the order will receive the next offering price that is
      determined after your order is received.
Buying Through a Dealer. If you buy shares through a dealer, your dealer must
      receive the order by the close of The New York Stock Exchange and
      transmit it to the Distributor so that it is received before the
      Distributor's close of business on a regular business day (normally
      5:00 P.M.) to receive that day's offering price, unless your dealer has
      made alternative arrangements with the Distributor. Otherwise, the
      order will receive the next offering price that is determined.

- ------------------------------------------------------------------------------
WHAT CLASSES OF SHARES DOES THE FUND OFFER? The Fund offers investors five
different classes of shares. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject
to different expenses and will likely have different share prices. When you
buy shares, be sure to specify the class of shares. If you do not choose a
class, your investment will be made in Class A shares.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Class A Shares. If you buy Class A shares, you pay an initial sales charge
      (on investments up to $1 million for regular accounts or lesser amounts
      for certain retirement plans). The amount of that sales charge will
      vary depending on the amount you invest. The sales charge rates are
      listed in "How Can You Buy Class A Shares?" below.
- ------------------------------------------------------------------------------
Class B Shares. If you buy Class B shares, you pay no sales charge at the
      time of purchase, but you will pay an annual asset-based sales charge.
      If you sell your shares within 6 years of buying them, you will
      normally pay a contingent deferred sales charge. That contingent
      deferred sales charge varies depending on how long you own your shares,
      as described in "How Can You Buy Class B Shares?" below.
- ------------------------------------------------------------------------------
Class C Shares. If you buy Class C shares, you pay no sales charge at the
      time of purchase, but you will pay an annual asset-based sales charge.
      If you sell your shares within 12 months of buying them, you will
      normally pay a contingent deferred sales charge of 1.0%, as described
      in "How Can You Buy Class C Shares?" below.
- ------------------------------------------------------------------------------
Class N Shares. If you buy Class N shares (available only through certain
      retirement plans), you pay no sales charge at the time of purchase, but
      you will pay an annual asset-based sales charge. If you sell your
      shares within 18 months of the retirement plan's first purchase of
      Class N shares, you may pay a contingent deferred sales charge of 1.0%,
      as described in "How Can You Buy Class N Shares?" below.
Class Y Shares. Class Y shares are offered only to certain institutional
      investors that have special agreements with the Distributor.

WHICH CLASS OF SHARES SHOULD YOU CHOOSE? Once you decide that the Fund is an
appropriate investment for you, the decision as to which class of shares is
best suited to your needs depends on a number of factors that you should
discuss with your financial advisor. Some factors to consider are how much
you plan to invest and how long you plan to hold your investment. If your
goals and objectives change over time and you plan to purchase additional
shares, you should re-evaluate those factors to see if you should consider
another class of shares. The Fund's operating costs that apply to a class of
shares and the effect of the different types of sales charges on your
investment will vary your investment results over time.

      The discussion below is not intended to be investment advice or a
recommendation, because each investor's financial considerations are
different. The discussion below assumes that you will purchase only one class
of shares and not a combination of shares of different classes. Of course,
these examples are based on approximations of the effects of current sales
charges and expenses projected over time, and do not detail all of the
considerations in selecting a class of shares. You should analyze your
options carefully with your financial advisor before making that choice.

How Long Do You Expect to Hold Your Investment? While future financial needs
      cannot be predicted with certainty, knowing how long you expect to hold
      your investment will assist you in selecting the appropriate class of
      shares. Because of the effect of class-based expenses, your choice will
      also depend on how much you plan to invest. For example, the reduced
      sales charges available for larger purchases of Class A shares may,
      over time, offset the effect of paying an initial sales charge on your
      investment, compared to the effect over time of higher class-based
      expenses on shares of Class B, Class C or Class N. For retirement plans
      that qualify to purchase Class N shares, Class N shares will generally
      be more advantageous than Class B and Class C shares.

   o  Investing for the Shorter Term. While the Fund is meant to be a
      long-term investment, if you have a relatively short-term investment
      horizon (that is, you plan to hold your shares for not more than six
      years), you should probably consider purchasing Class A, or Class C
      shares rather than Class B shares. That is because of the effect of the
      Class B contingent deferred sales charge if you redeem within six
      years, as well as the effect of the Class B asset-based sales charge on
      the investment return for that class in the short-term. Class C shares
      might be the appropriate choice (especially for investments of less
      than $100,000), because there is no initial sales charge on Class C
      shares, and the contingent deferred sales charge does not apply to
      amounts you sell after holding them one year.

      However, if you plan to invest more than $100,000 for the shorter term,
      then as your investment horizon increases toward six years, Class C
      shares might not be as advantageous as Class A shares. That is because
      the annual asset-based sales charge on Class C shares will have a
      greater impact on your account over the longer term than the reduced
      front-end sales charge available for larger purchases of Class A
      shares.

      And for non-retirement plan investors who invest $1 million or more, in
      most cases Class A shares will be the most advantageous choice, no
      matter how long you intend to hold your shares. For that reason, the
      Distributor normally will not accept purchase orders of $500,000 or
      more of Class B shares or $1 million or more of Class C shares from a
      single investor.

o     Investing for the Longer Term.  If you are investing  less than $100,000
      for the  longer-term,  for example for retirement,  and do not expect to
      need  access to your money for seven  years or more,  Class B shares may
      be appropriate.

Are There  Differences  in Account  Features  That Matter to You? Some account
      features  may  not  be  available  to  Class  B,  Class  C and  Class  N
      shareholders.  Other  features  may  not be  advisable  (because  of the
      effect of the  contingent  deferred  sales  charge) for Class B, Class C
      and Class N shareholders.  Therefore,  you should  carefully  review how
      you plan to use your  investment  account before deciding which class of
      shares to buy.

      Additionally, the dividends payable to Class B, Class C and Class N
      shareholders will be reduced by the additional expenses borne by those
      classes that are not borne by Class A or Class Y shares, such as the
      Class B, Class C and Class N asset-based sales charge described below
      and in the Statement of Additional Information. Share certificates are
      only available for Class A shares. If you are considering using your
      shares as collateral for a loan, that may be a factor to consider.

How Do Share Classes Affect Payments to Your Broker? A financial advisor may
      receive different compensation for selling one class of shares than for
      selling another class. It is important to remember that Class B, Class
      C and Class N contingent deferred sales charges and asset-based sales
      charges have the same purpose as the front-end sales charge on sales of
      Class A shares: to compensate the Distributor for concessions and
      expenses it pays to dealers and financial institutions for selling
      shares. The Distributor may pay additional compensation from its own
      resources to securities dealers or financial institutions based upon
      the value of shares of the Fund owned by the dealer or financial
      institution for its own account or for its customers.

SPECIAL SALES CHARGE ARRANGEMENTS AND WAIVERS. Appendix B to the Statement of
Additional Information details the conditions for the waiver of sales charges
that apply in certain cases, and the special sales charge rates that apply to
purchases of shares of the Fund by certain groups, or under specified
retirement plan arrangements or in other special types of transactions. To
receive a waiver or special sales charge rate, you must advise the
Distributor when purchasing shares or the Transfer Agent when redeeming
shares that a special condition applies.

HOW CAN YOU BUY CLASS A SHARES? Class A shares are sold at their offering
price, which is normally net asset value plus an initial sales charge.
However, in some cases, described below, purchases are not subject to an
initial sales charge, and the offering price will be the net asset value. In
other cases, reduced sales charges may be available, as described below or in
the Statement of Additional Information. Out of the amount you invest, the
Fund receives the net asset value to invest for your account.

      The sales charge varies depending on the amount of your purchase. A
portion of the sales charge may be retained by the Distributor or allocated
to your dealer as a concession. The Distributor reserves the right to reallow
the entire concession to dealers. The current sales charge rates and
concessions paid to dealers and brokers are as follows:

 ------------------------------------------------------------------------------
 Amount of Purchase       Front-End Sales  Front-End Sales   Concession As
                                           Charge As a
                          Charge As a      Percentage of
                          Percentage of    Net               Percentage of
                          Offering Price   Amount Invested   Offering Price
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 Less than $25,000             5.75%             6.10%             4.75%
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $25,000 or more but           5.50%             5.82%             4.75%
 less than $50,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $50,000 or more but           4.75%             4.99%             4.00%
 less than $100,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $100,000 or more but          3.75%             3.90%             3.00%
 less than $250,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $250,000 or more but          2.50%             2.56%             2.00%
 less than $500,000
 ------------------------------------------------------------------------------
 ------------------------------------------------------------------------------
 $500,000 or more but          2.00%             2.04%             1.60%
 less than $1 million
 ------------------------------------------------------------------------------

Can You Reduce Class A Sales Charges? You may be eligible to buy Class A
      shares at reduced sales charge rates under the Fund's "Right of
      Accumulation" or a Letter of Intent, as described in "Reduced Sales
      Charges" in the Statement of Additional Information.

Class A Contingent Deferred Sales Charge. There is no initial sales charge on
      purchases of Class A shares of any one or more of the Oppenheimer funds
      aggregating $1 million or more, or for certain purchases by particular
      types of retirement plans that were permitted to purchase such shares
      prior to March 1, 2001 ("grandfathered retirement accounts").
      Retirement plans are not permitted to make initial purchases of Class A
      shares subject to a contingent deferred sales charge. The Distributor
      pays dealers of record concessions in an amount equal to 1.0% of
      purchases of $1 million or more other than by grandfathered retirement
      accounts. For grandfathered retirement accounts, the concession is
      0.75% of the first $2.5 million of purchases plus 0.25% of purchases in
      excess of $2.5 million. In either case, the concession will not be paid
      on purchases of shares by exchange or that were previously subject to a
      front-end sales charge and dealer concession.

      If you redeem any of those shares within an 18-month "holding period"
      measured from the beginning of the calendar month of their purchase, a
      contingent deferred sales charge (called the "Class A contingent
      deferred sales charge") may be deducted from the redemption proceeds.
      That sales charge will be equal to 1.0% of the lesser of:
o     the aggregate net asset value of the redeemed shares at the time of
      redemption (excluding shares purchased by reinvestment of dividends or
      capital gain distributions) or
o     the original net asset value of the redeemed shares.

      The Class A contingent deferred sales charge will not exceed the
      aggregate amount of the concessions the Distributor paid to your dealer
      on all purchases of Class A shares of all Oppenheimer funds you made
      that were subject to the Class A contingent deferred sales charge.

Purchases by Certain Retirement Plans. There is no initial sales charge on
      purchases of Class A shares of any one or more Oppenheimer funds by
      retirement plans that have $10 million or more in plan assets and that
      have entered into a special agreement with the Distributor and by
      retirement plans which are part of a retirement plan product or
      platform offered by certain banks, broker-dealers, financial advisors,
      insurance companies or recordkeepers which have entered into a special
      agreement with the Distributor. The Distributor currently pays dealers
      of record concessions in an amount equal to 0.25% of the purchase price
      of Class A shares by those retirement plans from its own resources at
      the time of sale, subject to certain exceptions as described in the
      Statement of Additional Information. There is no contingent deferred
      sales charge upon the redemption of such shares.

HOW CAN YOU BUY CLASS B SHARES? Class B shares are sold at net asset value
per share without an initial sales charge. However, if Class B shares are
redeemed within six years from the beginning of the calendar month of their
purchase, a contingent deferred sales charge will be deducted from the
redemption proceeds. The Class B contingent deferred sales charge is paid to
compensate the Distributor for its expenses of providing distribution-related
services to the Fund in connection with the sale of Class B shares.

      The amount of the contingent deferred sales charge will depend on the
number of years since you invested and the dollar amount being redeemed,
according to the following schedule for the Class B contingent deferred sales
charge holding period:

- -------------------------------------------------------------------------------
Years Since Beginning of Month in       Contingent Deferred Sales Charge on
Which Purchase Order was Accepted       Redemptions in That Year
                                        (As % of Amount Subject to Charge)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
0 - 1                                   5.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1 - 2                                   4.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2 - 3                                   3.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
3 - 4                                   3.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
4 - 5                                   2.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5 - 6                                   1.0%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
More than 6                             None
- -------------------------------------------------------------------------------
In the table, a "year" is a 12-month period. In applying the contingent
deferred sales charge, all purchases are considered to have been made on the
first regular business day of the month in which the purchase was made.

Automatic Conversion of Class B Shares. Class B shares automatically convert
      to Class A shares 72 months after you purchase them. This conversion
      feature relieves Class B shareholders of the asset-based sales charge
      that applies to Class B shares under the Class B Distribution and
      Service Plan, described below. The conversion is based on the relative
      net asset value of the two classes, and no sales load or other charge
      is imposed. When any Class B shares that you hold convert, any other
      Class B shares that were acquired by reinvesting dividends and
      distributions on the converted shares will also convert to Class A
      shares. For further information on the conversion feature and its tax
      implications, see "Class B Conversion" in the Statement of Additional
      Information.

How Can you Buy Class C Shares? Class C shares are sold at net asset value
per share without an initial sales charge. However, if Class C shares are
redeemed within a holding period of 12 months from the beginning of the
calendar month of their purchase, a contingent deferred sales charge of 1.0%
will be deducted from the redemption proceeds. The Class C contingent
deferred sales charge is paid to compensate the Distributor for its expenses
of providing distribution-related services to the Fund in connection with the
sale of Class C shares.

HOW CAN YOU BUY CLASS N SHARES? Class N shares are offered for sale to
retirement plans (including IRAs and 403(b) plans) that purchase $500,000 or
more of Class N shares of one or more Oppenheimer funds or to group
retirement plans (which do not include IRAs and 403(b) plans) that have
assets of $500,000 or more or 100 or more eligible participants. See
"Availability of Class N shares" in the Statement of Additional Information
for other circumstances where Class N shares are available for purchase.

      A contingent deferred sales charge of 1.0% will be imposed upon the
redemption of Class N shares, if:
o     The group retirement plan is terminated or Class N shares of all
      Oppenheimer funds are terminated as an investment option of the plan
      and Class N shares are redeemed within 18 months after the plan's first
      purchase of Class N shares of any Oppenheimer fund, or
o     With respect to an IRA or 403(b) plan, Class N shares are redeemed
      within 18 months of the plan's first purchase of Class N shares of any
      Oppenheimer fund.

      Retirement plans that offer Class N shares may impose charges on plan
participant accounts. The procedures for buying, selling, exchanging and
transferring the Fund's other classes of shares (other than the time those
orders must be received by the Distributor or Transfer Agent in Colorado) and
the special account features applicable to purchasers of those other classes
of shares described elsewhere in this Prospectus do not apply to Class N
shares offered through a group retirement plan. Instructions for buying,
selling, exchanging or transferring Class N shares offered through a group
retirement plan must be submitted by the plan, not by plan participants for
whose benefit the shares are held.

Who Can Buy Class Y Shares? Class Y shares are sold at net asset value per
share without a sales charge directly to institutional investors that have
special agreements with the Distributor for this purpose. They may include
insurance companies, registered investment companies and employee benefit
plans. Individual investors cannot buy Class Y shares directly.

      An institutional investor that buys Class Y shares for its customers'
accounts may impose charges on those accounts. The procedures for buying,
selling, exchanging and transferring the Fund's other classes of shares
(other than the time those orders must be received by the Distributor or
Transfer Agent at their Colorado office) and the special account features
available to investors buying those other classes of shares do not apply to
Class Y shares. Instructions for buying, selling, exchanging or transferring
Class Y shares held by institutional investors must be submitted by the
institutional investor, not by its customers for whose benefit the shares are
held.

DISTRIBUTION AND SERVICE (12b-1) PLANS.

Service Plan for Class A Shares. The Fund has adopted a Service Plan for
      Class A shares. It reimburses the Distributor for a portion of its
      costs incurred for services provided to accounts that hold Class A
      shares. Reimbursement is made quarterly at an annual rate of up to
      0.25% of the average annual net assets of Class A shares of the Fund.
      The Distributor currently uses all of those fees to pay dealers,
      brokers, banks and other financial institutions quarterly for providing
      personal service and maintenance of accounts of their customers that
      hold Class A shares. With respect to Class A shares subject to a Class
      A contingent deferred sales charge purchased by grandfathered
      retirement accounts, the Distributor pays the 0.25% service fee to
      dealers in advance for the first year after the shares are sold by the
      dealer.  During the first year the shares are sold, the Distributor
      retains the service fee.  After the shares have been held for a year,
      the Distributor pays the service fee to dealers on a quarterly basis.

Distribution and Service Plans for Class B, Class C and Class N Shares. The
      Fund has adopted Distribution and Service Plans for Class B, Class C
      and Class N shares to pay the Distributor for its services and costs in
      distributing Class B, Class C and Class N shares and servicing
      accounts. Under the plans, the Fund pays the Distributor an annual
      asset-based sales charge of 0.75% on Class B and Class C shares and
      0.25% on Class N shares. The Distributor also receives a service fee of
      0.25% per year under the Class B, Class C  and Class N plans.

      The asset-based sales charge and service fees increase Class B and
      Class C expenses by 1.0% and increase Class N expenses by 0.50% of the
      net assets per year of the respective class. Because these fees are
      paid out of the Fund's assets on an on-going basis, over time these
      fees will increase the cost of your investment and may cost you more
      than other types of sales charges.

      The Distributor uses the service fees to compensate dealers for
      providing personal services for accounts that hold Class B, Class C or
      Class N shares. The Distributor pays the 0.25% service fees to dealers
      in advance for the first year after the shares are sold by the dealer.
      After the shares have been held for a year, the Distributor pays the
      service fees to dealers on a quarterly basis. The Distributor retains
      the service fees for accounts for which it renders the required
      personal services.

      The Distributor currently pays a sales concession of 3.75% of the
      purchase price of Class B shares to dealers from its own resources at
      the time of sale. Including the advance of the service fee, the total
      amount paid by the Distributor to the dealer at the time of sale of
      Class B shares is therefore 4.00% of the purchase price. The
      Distributor retains the Class B asset-based sales charge. See the
      Statement of Additional Information for exceptions.

      The Distributor currently pays a sales concession of 0.75% of the
      purchase price of Class C shares to dealers from its own resources at
      the time of sale. Including the advance of the service fee, the total
      amount paid by the Distributor to the dealer at the time of sale of
      Class C shares is therefore 1.0% of the purchase price. The Distributor
      pays the asset-based sales charge as an ongoing concession to the
      dealer on Class C shares that have been outstanding for a year or more.
      See the Statement of Additional Information for exceptions.

      The Distributor currently pays a sales concession of 0.75% of the
      purchase price of Class N shares to dealers from its own resources at
      the time of sale. Including the advance of the service fee, the total
      amount paid by the Distributor to the dealer at the time of sale of
      Class N shares is therefore 1.0% of the purchase price. The Distributor
      retains the asset-based sales charge on Class N shares. See the
      Statement of Additional Information for exceptions.

Special Investor Services

ACCOUNTLINK. You can use our AccountLink feature to link your Fund account
with an account at a U.S. bank or other financial institution. It must be an
Automated Clearing House (ACH) member. AccountLink lets you:
    o transmit funds electronically to purchase shares by telephone (through
      a service representative or by PhoneLink) or automatically under Asset
      Builder Plans, or
    o have the Transfer Agent send redemption proceeds or transmit dividends
      and distributions directly to your bank account. Please call the
      Transfer Agent for more information.

      You may purchase shares by telephone only after your account has been
established. To purchase shares in amounts up to $250,000 through a telephone
representative, call the Distributor at 1.800.225.5677. The purchase payment
will be debited from your bank account.

      AccountLink privileges should be requested on your Application or your
dealer's settlement instructions if you buy your shares through a dealer.
After your account is established, you can request AccountLink privileges by
sending signature-guaranteed instructions and proper documentation to the
Transfer Agent. AccountLink privileges will apply to each shareholder listed
in the registration on your account as well as to your dealer representative
of record unless and until the Transfer Agent receives written instructions
terminating or changing those privileges. After you establish AccountLink for
your account, any change of bank account information must be made by
signature-guaranteed instructions to the Transfer Agent signed by all
shareholders who own the account.

PHONELINK. PhoneLink is the OppenheimerFunds automated telephone system that
enables shareholders to perform a number of account transactions
automatically using a touch-tone phone. PhoneLink may be used on
already-established Fund accounts after you obtain a Personal Identification
Number (PIN), by calling the PhoneLink number, 1.800.225.5677.

Purchasing Shares. You may purchase shares in amounts up to $100,000 by
      phone, by calling 1.800.225.5677. You must have established AccountLink
      privileges to link your bank account with the Fund to pay for these
      purchases.
Exchanging Shares. With the OppenheimerFunds Exchange Privilege, described
      below, you can exchange shares automatically by phone from your Fund
      account to another OppenheimerFunds account you have already
      established by calling the special PhoneLink number.
Selling Shares. You can redeem shares by telephone automatically by calling
      the PhoneLink number and the Fund will send the proceeds directly to
      your AccountLink bank account. Please refer to "How to Sell Shares,"
      below for details.

CAN YOU SUBMIT TRANSACTION REQUESTS BY FAX? You may send requests for certain
types of account transactions to the Transfer Agent by fax (telecopier).
Please call 1.800.225.5677 for information about which transactions may be
handled this way. Transaction requests submitted by fax are subject to the
same rules and restrictions as written and telephone requests described in
this Prospectus.

OPPENHEIMERFUNDS INTERNET WEBSITE. You can obtain information about the Fund,
as well as your account balance, on the OppenheimerFunds Internet website, at
www.oppenheimerfunds.com. Additionally, shareholders listed in the account
- ------------------------
registration (and the dealer of record) may request certain account
transactions through a special section of that website. To perform account
transactions or obtain account information online, you must first obtain a
user I.D. and password on that website. If you do not want to have Internet
account transaction capability for your account, please call the Transfer
Agent at 1.800.225.5677. At times, the website may be inaccessible or its
transaction features may be unavailable.

AUTOMATIC WITHDRAWAL AND EXCHANGE PLANS. The Fund has several plans that
enable you to sell shares automatically or exchange them to another
OppenheimerFunds account on a regular basis. Please call the Transfer Agent
or consult the Statement of Additional Information for details.

REINVESTMENT PRIVILEGE. If you redeem some or all of your Class A or Class B
shares of the Fund, you have up to six months to reinvest all or part of the
redemption proceeds in Class A shares of the Fund or other Oppenheimer funds
without paying a sales charge. This privilege applies only to Class A shares
that you purchased subject to an initial sales charge and to Class A or Class
B shares on which you paid a contingent deferred sales charge when you
redeemed them. This privilege does not apply to Class C, Class N or Class Y
shares. You must be sure to ask the Distributor for this privilege when you
send your payment.

RETIREMENT PLANS. You may buy shares of the Fund for your retirement plan
account. If you participate in a plan sponsored by your employer, the plan
trustee or administrator must buy the shares for your plan account. The
Distributor also offers a number of different retirement plans that
individuals and employers can use:
Individual Retirement Accounts (IRAs). These include regular IRAs, Roth IRAs,
      SIMPLE IRAs and rollover IRAs.
SEP-IRAs. These are Simplified Employee Pension Plan IRAs for small business
      owners or self-employed individuals.
403(b)(7) Custodial Plans. These are tax-deferred plans for employees of
      eligible tax-exempt organizations, such as schools, hospitals and
      charitable organizations.
401(k) Plans. These are special retirement plans for businesses.
Pension and Profit-Sharing Plans. These plans are designed for businesses and
      self-employed individuals.
      Please call the Distributor for OppenheimerFunds retirement plan
documents, which include applications and important plan information.

How to Sell Shares

You can sell (redeem) some or all of your shares on any regular business day.
Your shares will be sold at the next net asset value calculated after your
order is received in proper form (which means that it must comply with the
procedures described below) and is accepted by the Transfer Agent. The Fund
lets you sell your shares by writing a letter, or by telephone. You can also
set up Automatic Withdrawal Plans to redeem shares on a regular basis. If you
have questions about any of these procedures, and especially if you are
redeeming shares in a special situation, such as due to the death of the
owner or from a retirement plan account, please call the Transfer Agent
first, at 1.800.225.5677, for assistance

Certain Requests Require a Signature Guarantee. To protect you and the Fund
      from fraud, the following redemption requests must be in writing and
      must include a signature guarantee (although there may be other
      situations that also require a signature guarantee):
   o  You wish to redeem more than $100,000 and receive a check
   o  The redemption check is not payable to all shareholders listed on the
      account statement
   o  The redemption check is not sent to the address of record on your
      account statement
   o  Shares are being transferred to a Fund account with a different owner
      or name
   o  Shares are being redeemed by someone (such as an Executor) other than
      the owners.

Where Can You Have Your Signature Guaranteed? The Transfer Agent will accept
      a guarantee of your signature by a number of financial institutions,
      including:
o     a U.S. bank, trust company, credit union or savings association,
o     a foreign bank that has a U.S. correspondent bank,
o     a U.S. registered dealer or broker in securities, municipal securities
      or government securities, or
o     a U.S. national securities exchange, a registered securities
      association or a clearing agency.
      If you are signing on behalf of a corporation, partnership or other
      business or as a fiduciary, you must also include your title in the
      signature.

Retirement Plan Accounts. There are special procedures to sell shares in an
      OppenheimerFunds retirement plan account. Call the Transfer Agent for a
      distribution request form. Special income tax withholding requirements
      apply to distributions from retirement plans. You must submit a
      withholding form with your redemption request to avoid delay in getting
      your money and if you do not want tax withheld. If your employer holds
      your retirement plan account for you in the name of the plan, you must
      ask the plan trustee or administrator to request the sale of the Fund
      shares in your plan account.

HOW DO you SELL SHARES BY MAIL? Write a letter of instruction that includes:
   o  Your name
   o  The Fund's name
   o  Your Fund account number (from your account statement)
   o  The dollar amount or number of shares to be redeemed
   o  Any special payment instructions
   o  Any share certificates for the shares you are selling
   o  The signatures of all registered owners exactly as the account is
      registered, and
   o  Any special documents requested by the Transfer Agent to assure proper
      authorization of the person asking to sell the shares.

Use the following address for            Send courier or express mail
requests by mail:                        requests to:
OppenheimerFunds Services                OppenheimerFunds Services
P.O. Box 5270                            10200 E. Girard Avenue, Building D
Denver, Colorado 80217                   Denver, Colorado 80231

HOW DO you SELL SHARES BY TELEPHONE? You and your dealer representative of
record may also sell your shares by telephone. To receive the redemption
price calculated on a particular regular business day, your call must be
received by the Transfer Agent by the close of The New York Stock Exchange
that day, which is normally 4:00 P.M., but may be earlier on some days. You
may not redeem shares held in an OppenheimerFunds retirement plan account or
under a share certificate by telephone.
   o  To redeem shares through a service representative or automatically on
      PhoneLink, call 1.800.225.5677.
      Whichever method you use, you may have a check sent to the address on
the account statement, or, if you have linked your Fund account to your bank
account on AccountLink, you may have the proceeds sent to that bank account.

Are There Limits on Amounts Redeemed by Telephone?
Telephone Redemptions Paid by Check. Up to $100,000 may be redeemed by
      telephone in any seven-day period. The check must be payable to all
      owners of record of the shares and must be sent to the address on the
      account statement. This service is not available within 30 days of
      changing the address on an account.

Telephone Redemptions Through AccountLink. There are no dollar limits on
      telephone redemption proceeds sent to a bank account designated when
      you establish AccountLink. Normally the ACH transfer to your bank is
      initiated on the business day after the redemption. You do not receive
      dividends on the proceeds of the shares you redeemed while they are
      waiting to be transferred.

CAN  YOU  SELL  SHARES  THROUGH  your  DEALER?   The   Distributor   has  made
arrangements  to repurchase  Fund shares from dealers and brokers on behalf of
their  customers.  Brokers or dealers  may  charge for that  service.  If your
shares are held in the name of your dealer,  you must redeem them through your
dealer.

HOW CONTINGENT DEFERRED SALES CHARGES AFFECT REDEMPTIONS. If you purchase
shares subject to a Class A, Class B, Class C or Class N contingent deferred
sales charge and redeem any of those shares during the applicable holding
period for the class of shares, the contingent deferred sales charge will be
deducted from the redemption proceeds (unless you are eligible for a waiver
of that sales charge based on the categories listed in Appendix B to the
Statement of Additional Information and you advise the Transfer Agent of your
eligibility for the waiver when you place your redemption request.)

      A  contingent  deferred  sales charge will be based on the lesser of the
net  asset  value of the  redeemed  shares  at the time of  redemption  or the
original net asset value.  A contingent  deferred  sales charge is not imposed
on:
o     the amount of your  account  value  represented  by an  increase  in net
      asset value over the initial purchase price,
o     shares  purchased by the  reinvestment  of  dividends  or capital  gains
      distributions, or
o     shares redeemed in the special circumstances  described in Appendix B to
      the Statement of Additional Information.
      To determine whether a contingent deferred sales charge applies to a
redemption, the Fund redeems shares in the following order:
   1. shares acquired by reinvestment of dividends and capital gains
      distributions,
   2. shares held for the holding period that applies to the class, and
   3. shares held the longest during the holding period.

      Contingent deferred sales charges are not charged when you exchange
shares of the Fund for shares of other Oppenheimer funds. However, if you
exchange them within the applicable contingent deferred sales charge holding
period, the holding period will carry over to the fund whose shares you
acquire. Similarly, if you acquire shares of this Fund by exchanging shares
of another Oppenheimer fund that are still subject to a contingent deferred
sales charge holding period, that holding period will carry over to this Fund.

How to Exchange Shares

Shares of the Fund may be exchanged for shares of certain Oppenheimer funds
at net asset value per share at the time of exchange, without sales charge.
Shares of the Fund can be purchased by exchange of shares of other
Oppenheimer funds on the same basis. To exchange shares, you must meet
several conditions:
   o  Shares of the fund selected for exchange must be available for sale in
      your state of residence.
   o  The prospectuses of both funds must offer the exchange privilege.
   o  You must hold the shares you buy when you establish your account for at
      least seven days before you can exchange them. After the account is
      open seven days, you can exchange shares every regular business day.
   o  You must meet the minimum purchase requirements for the fund whose
      shares you purchase by exchange.
   o  Before exchanging into a fund, you must obtain and read its prospectus.
      Shares of a particular class of the Fund may be exchanged only for
shares of the same class in the other Oppenheimer funds. For example, you can
exchange Class A shares of this Fund only for Class A shares of another fund.
In some cases, sales charges may be imposed on exchange transactions. For tax
purposes, exchanges of shares involve a sale of the shares of the fund you
own and a purchase of the shares of the other fund, which may result in a
capital gain or loss. Please refer to "How to Exchange Shares" in the
Statement of Additional Information for more details.

      You can find a list of Oppenheimer funds currently available for
exchanges in the Statement of Additional Information or obtain one by calling
a service representative at 1.800.225.5677. That list can change from time to
time.

HOW DO you SUBMIT EXCHANGE REQUESTS? Exchanges may be requested in writing or
by telephone:

Written Exchange Requests. Submit an OppenheimerFunds Exchange Request form,
      signed by all owners of the account. Send it to the Transfer Agent at
      the address on the back cover. Exchanges of shares held under
      certificates cannot be processed unless the Transfer Agent receives the
      certificates with the request.
Telephone  Exchange  Requests.  Telephone exchange requests may be made either
      by calling a service  representative or by using PhoneLink for automated
      exchanges by calling  1.800.225.5677.  Telephone  exchanges  may be made
      only  between  accounts  that are  registered  with the same name(s) and
      address.  Shares  held  under  certificates  may  not  be  exchanged  by
      telephone.

ARE THERE LIMITATIONS ON EXCHANGES? There are certain exchange policies you
should be aware of:
o     Shares are redeemed from one fund and purchased from the other fund in
      the exchange transaction on the same regular business day on which the
      Transfer Agent receives an exchange request that conforms to the
      policies described above. It must be received by the close of The New
      York Stock Exchange that day, which is normally 4:00 P.M. but may be
      earlier on some days.
o     The interests of the Fund's long-term shareholders and its ability to
      manage its investments may be adversely affected when its shares are
      repeatedly bought and sold in response to short-term market
      fluctuations--also known as "market timing." When large dollar amounts
      are involved, the Fund may have difficulty implementing long-term
      investment strategies, because it cannot predict how much cash it will
      have to invest. Market timing also may force the Fund to sell portfolio
      securities at disadvantageous times to raise the cash needed to buy a
      market timer's Fund shares. These factors may hurt the Fund's
      performance and its shareholders. When the Manager believes frequent
      trading would have a disruptive effect on the Fund's ability to manage
      its investments, the Manager and the Fund may reject purchase orders
      and exchanges into the Fund by any person, group or account that the
      Manager believes to be a market timer.
   o  The Fund may amend, suspend or terminate the exchange privilege at any
      time. The Fund will provide you notice whenever it is required to do so
      by applicable law, but it may impose changes at any time for emergency
      purposes.
   o  If the Transfer Agent cannot exchange all the shares you request
      because of a restriction cited above, only the shares eligible for
      exchange will be exchanged.

Shareholder Account Rules and Policies

More information about the Fund's policies and procedures for buying, selling
and exchanging shares is contained in the Statement of Additional Information.
A $12 annual fee is assessed on any account valued at less than $500. The fee
      is automatically deducted from accounts annually on or about the second
      to last business day of September. See the Statement of Additional
      Information, or visit the OppenheimerFunds website, to learn how you
      can avoid this fee and for circumstances when this fee will not be
      assessed.
The offering of shares may be suspended during any period in which the
      determination of net asset value is suspended, and the offering may be
      suspended by the Board of Trustees at any time the Board believes it is
      in the Fund's best interest to do so.
Telephone transaction privileges for purchases, redemptions or exchanges may
      be modified, suspended or terminated by the Fund at any time. The Fund
      will provide you notice whenever it is required to do so by applicable
      law. If an account has more than one owner, the Fund and the Transfer
      Agent may rely on the instructions of any one owner. Telephone
      privileges apply to each owner of the account and the dealer
      representative of record for the account unless the Transfer Agent
      receives cancellation instructions from an owner of the account.
The Transfer Agent will record any telephone calls to verify data concerning
      transactions and has adopted other procedures to confirm that telephone
      instructions are genuine, by requiring callers to provide tax
      identification numbers and other account data or by using PINs, and by
      confirming such transactions in writing. The Transfer Agent and the
      Fund will not be liable for losses or expenses arising out of telephone
      instructions reasonably believed to be genuine.
Redemption or transfer requests will not be honored until the Transfer Agent
      receives all required documents in proper form. From time to time, the
      Transfer Agent in its discretion may waive certain of the requirements
      for redemptions stated in this Prospectus.
Dealers that perform account transactions for their clients by participating
      in NETWORKING through the National Securities Clearing Corporation are
      responsible for obtaining their clients' permission to perform those
      transactions, and are responsible to their clients who are shareholders
      of the Fund if the dealer performs any transaction erroneously or
      improperly.
The redemption price for shares will vary from day to day because the value
      of the securities in the Fund's portfolio fluctuates. The redemption
      price, which is the net asset value per share, will normally differ for
      each class of shares. The redemption value of your shares may be more
      or less than their original cost.
Payment for redeemed shares ordinarily is made in cash. It is forwarded by
      check, or through AccountLink within seven days after the Transfer
      Agent receives redemption instructions in proper form. However, under
      unusual circumstances determined by the Securities and Exchange
      Commission, payment may be delayed or suspended. For accounts
      registered in the name of a broker-dealer, payment will normally be
      forwarded within three business days after redemption.
The Transfer Agent may delay processing any type of redemption payment as
      described under "How to Sell Shares" for recently purchased shares, but
      only until the purchase payment has cleared. That delay may be as much
      as 10 days from the date the shares were purchased. That delay may be
      avoided if you purchase shares by Federal Funds wire or certified
      check, or arrange with your bank to provide telephone or written
      assurance to the Transfer Agent that your purchase payment has cleared.
Involuntary redemptions of small accounts may be made by the Fund if the
      account value has fallen below $200 for reasons other than the fact
      that the market value of shares has dropped. In some cases, involuntary
      redemptions may be made to repay the Distributor for losses from the
      cancellation of share purchase orders.
Shares may be "redeemed in kind" under unusual circumstances (such as a lack
      of liquidity in the Fund's portfolio to meet redemptions). This means
      that the redemption proceeds will be paid with liquid securities from
      the Fund's portfolio.
"Backup withholding" of federal income tax may be applied against taxable
      dividends, distributions and redemption proceeds (including exchanges)
      if you fail to furnish the Fund your correct, certified Social Security
      or Employer Identification Number when you sign your application, or if
      you under-report your income to the Internal Revenue Service.
To avoid sending duplicate copies of materials to households, the Fund will
      mail only one copy of each prospectus, annual and semi-annual report
      and annual notice of the Fund's privacy policy to shareholders having
      the same last name and address on the Fund's records. The consolidation
      of these mailings, called householding, benefits the Fund through
      reduced mailing expense.

      If you want to receive multiple copies of these materials, you may call
      the Transfer Agent at 1.800.225.5677. You may also notify the Transfer
      Agent in writing. Individual copies of prospectuses, reports and
      privacy notices will be sent to you commencing within 30 days after the
      Transfer Agent receives your request to stop householding.

Dividends, Capital Gains and Taxes

Dividends.  The Fund intends to declare dividends separately for each class of
shares  from net  investment  income  on an  annual  basis  and to pay them to
shareholders  in  December  on a date  selected  by  the  Board  of  Trustees.
Dividends and distributions  paid to Class A and Class Y shares will generally
be  higher  than  dividends  for Class B,  Class C and  Class N shares,  which
normally have higher  expenses than Class A and Class Y. The Fund has no fixed
dividend  rate  and  cannot  guarantee  that it  will  pay  any  dividends  or
distributions.

Capital Gains. The Fund may realize capital gains on the sale of portfolio
securities. If it does, it may make distributions out of any net short-term
or long-term capital gains in December of each year. The Fund may make
supplemental distributions of dividends and capital gains following the end
of its fiscal year. There can be no assurance that the Fund will pay any
capital gains distributions in a particular year.

WHAT CHOICES DO YOU HAVE FOR RECEIVING DISTRIBUTIONS? When you open your
account, specify on your application how you want to receive your dividends
and distributions. You have four options:
Reinvest All Distributions in the Fund. You can elect to reinvest all
      dividends and capital gains distributions in additional shares of the
      Fund.
Reinvest Dividends or Capital Gains. You can elect to reinvest some
      distributions (dividends, short-term capital gains or long-term capital
      gains distributions) in the Fund while receiving the other types of
      distributions by check or having them sent to your bank account through
      AccountLink.
Receive All Distributions in Cash. You can elect to receive a check for all
      dividends and capital gains distributions or have them sent to your
      bank through AccountLink.
Reinvest Your Distributions in Another OppenheimerFunds Account. You can
      reinvest all distributions in the same class of shares of another
      OppenheimerFunds account you have established.

TAXES. If your shares are not held in a tax-deferred retirement account, you
should be aware of the following tax implications of investing in the Fund.
Distributions are subject to federal income tax and may be subject to state
or local taxes. Dividends paid from short-term capital gains and net
investment income are taxable as ordinary income. Long-term capital gains are
taxable as long-term capital gains when distributed to shareholders. It does
not matter how long you have held your shares. Whether you reinvest your
distributions in additional shares or take them in cash, the tax treatment is
the same.

      Every year the Fund will send you and the IRS a statement showing the
amount of any taxable distribution you received in the previous year. Any
long-term capital gains will be separately identified in the tax information
the Fund sends you after the end of the calendar year.

Avoid "Buying a Dividend." If you buy shares on or just before the
      ex-dividend date, or just before the Fund declares a capital gains
      distribution, you will pay the full price for the shares and then
      receive a portion of the price back as a taxable dividend or capital
      gain.
Remember, There May be Taxes on Transactions. Because the Fund's share prices
      fluctuate, you may have a capital gain or loss when you sell or
      exchange your shares. A capital gain or loss is the difference between
      the price you paid for the shares and the price you received when you
      sold them. Any capital gain is subject to capital gains tax.
Returns of Capital Can Occur. In certain cases, distributions made by the
      Fund may be considered a non-taxable return of capital to shareholders.
      If that occurs, it will be identified in notices to shareholders.

      This  information  is only a  summary  of  certain  federal  income  tax
information  about your  investment.  You should consult with your tax advisor
about  the  effect  of an  investment  in the  Fund  on  your  particular  tax
situation.

Financial Highlights

The Financial Highlights Table is presented to help you understand the Fund's
financial performance since inception. Certain information reflects financial
results for a single Fund share. The total returns in the table represent the
rate that an investor would have earned (or lost) on an investment in the
Fund (assuming reinvestment of all dividends and distributions). The
information for fiscal years 2002, 2001 and 2000 has been audited by KPMG
llp, the Fund's independent auditors, whose report, along with the Fund's
financial statements, is included in the Statement of Additional Information,
which is available on request.  Another accounting firm audited the
information for the fiscal years prior to 2000.

FINANCIAL HIGHLIGHTS

  Class A     Year Ended October 31                       2002
2001              2000           1999         1998 1
- ---------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.42
$30.41            $19.88         $10.83         $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                             (.13)
(.02)              .04           (.04)          (.02)
 Net realized and unrealized gain (loss)                 (2.86)
(15.97)            10.49           9.11            .85

- -------------------------------------------------------------------------
 Total from investment operations                        (2.99)
(15.99)            10.53           9.07            .83
- ---------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --                --           (.02)            --
- ---------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.43
$14.42            $30.41         $19.88         $10.83

=========================================================================

- ---------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (20.74)%
(52.58)%           52.97%         83.79%          8.30%

- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)             $351,983
$532,338        $1,055,967       $167,879        $14,607
- ---------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $460,797
$718,814          $728,168        $60,644         $7,185
- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                            (1.06)%
(0.09)%            0.28%         (0.49)%        (0.33)%
 Expenses                                                 1.68%
1.33%             1.16%          1.40%          1.59% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       1.47%
1.32%             1.16%          1.40%          1.59%
- ---------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%               23%            61%           117%


1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements
19 | OPPENHEIMER MIDCAP FUND



FINANCIAL HIGHLIGHTS  Continued




  Class B     Year Ended October 31                       2002
2001              2000           1999         1998 1
- ---------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.02
$29.79            $19.62         $10.77        $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                      (.30)
(.15)             (.07)          (.07)         (.05)
 Net realized and unrealized gain (loss)                 (2.70)
(15.62)            10.24           8.94           .82

- -------------------------------------------------------------------------
 Total from investment operations                        (3.00)
(15.77)            10.17           8.87           .77
- ---------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --                --           (.02)            --
- ---------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.02
$14.02            $29.79         $19.62         $10.77

=========================================================================

- ---------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (21.40)%
(52.94)%           51.83%         82.40%          7.70%

- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)             $291,397
$438,962          $874,830       $118,611         $7,654
- ---------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $385,917
$592,096          $594,390        $40,455         $3,521
- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                     (1.85)%
(0.84)%           (0.48)%        (1.25)%        (1.06)%
 Expenses                                                 2.48%
2.08%             1.91%          2.16%          2.35% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       2.27%
2.07%             1.91%          2.16%          2.35%
- ---------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%               23%            61%           117%


1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.


See accompanying Notes to Financial Statements
20 | OPPENHEIMER MIDCAP FUND


  Class C     Year Ended October 31                       2002
2001              2000           1999         1998 1
- ---------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.02
$29.78            $19.60         $10.76         $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                      (.30)
(.15)             (.07)          (.06)          (.05)
 Net realized and unrealized gain (loss)                 (2.70)
(15.61)            10.25           8.92            .81

- -------------------------------------------------------------------------
 Total from investment operations                        (3.00)
(15.76)            10.18           8.86            .76
- ---------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --                --           (.02)            --
- ---------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.02
$14.02            $29.78         $19.60         $10.76

=========================================================================

- ---------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (21.40)%
(52.92)%           51.94%         82.38%          7.60%

- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)              $83,351
$128,230          $247,566        $26,482         $2,587
- ---------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $112,436
$170,129          $161,221         $9,066         $1,271
- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                     (1.84)%
(0.85)%           (0.48)%        (1.26)%        (1.07)%
 Expenses                                                 2.47%
2.08%             1.91%          2.16%          2.35% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       2.26%
2.07%             1.91%          2.16%          2.35%
- ---------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%               23%            61%           117%


1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements
21 | OPPENHEIMER MIDCAP FUND


FINANCIAL HIGHLIGHTS  Continued


  Class N     Year Ended October 31
2002            2001 1
- ------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                  $
14.40           $ 19.54
- ------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss
(.14)             (.05)
 Net realized and unrealized loss
(2.88)            (5.09)

- -------------------------
 Total from investment operations
(3.02)            (5.14)
- ------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain
- --                --
- ------------------------------------------------------------------------------------------------
 Net asset value, end of period
$11.38            $14.40

=========================

- ------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2
(20.97)%          (26.31)%

- ------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)
$8,846            $2,268
- ------------------------------------------------------------------------------------------------
 Average net assets (in thousands)
$6,576            $1,250
- ------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss
(1.28)%           (0.94)%
 Expenses
1.87%             1.73%
 Expenses, net of voluntary waiver of transfer agent
 fees and/or reduction to custodian expenses
1.66%             1.72%
- ------------------------------------------------------------------------------------------------
 Portfolio turnover rate
51%               84%


1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

INFORMATION AND SERVICES

For More Information on Oppenheimer MidCap Fund
The following additional information about the Fund is available without
charge upon request:

STATEMENT OF ADDITIONAL INFORMATION. This document includes additional
information about the Fund's investment policies, risks, and operations. It
is incorporated by reference into this Prospectus (which means it is legally
part of this Prospectus).

ANNUAL AND SEMI-ANNUAL REPORTS. Additional information about the Fund's
investments and performance is available in the Fund's Annual and Semi-Annual
Reports to shareholders. The Annual Report includes a discussion of market
conditions and investment strategies that significantly affected the Fund's
performance during its last fiscal year.

How to Get More Information
You can request the Statement of Additional Information, the Annual and
Semi-Annual Reports, the notice explaining the Fund's privacy policy and
other information about the Fund or your account:

- ------------------------------------------------------------------------------
By Telephone:                 Call OppenheimerFunds Services toll-free:
                              1.800.CALL.OPP (225.5677)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
By Mail:                      Write to:
                              OppenheimerFunds Services
                              P.O. Box 5270
                              Denver, Colorado 80217-5270
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
On the Internet:              You can send us a request by e-mail or read or
                              down-load documents on the OppenheimerFunds
                              website: www.oppenheimerfunds.com
                                       ------------------------
- ------------------------------------------------------------------------------

Information about the Fund including the Statement of Additional Information
can be reviewed and copied at the SEC's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be
obtained by calling the SEC at 1.202.942.8090.  Reports and other information
about the Fund are available on the EDGAR database on the SEC's Internet
website at www.sec.gov. Copies may be obtained after payment of a duplicating
           -----------
fee by electronic request at the SEC's e-mail address: publicinfo@sec.gov or
by writing to the SEC's Public Reference Section, Washington, D.C. 20549-0102.
No one has been authorized to provide any information about the Fund or to
make any representations about the Fund other than what is contained in this
Prospectus. This Prospectus is not an offer to sell shares of the Fund, nor a
solicitation of an offer to buy shares of the Fund, to any person in any
state or other jurisdiction where it is unlawful to make such an offer.

The Fund's shares are distributed by:                [logo]   OppenheimerFunds
Distributor, Inc.
The Fund's SEC File No. 811-08297
PR0745.001.1202
Printed on recycled paper

                          Appendix to Prospectus of
                           Oppenheimer MidCap Fund

      Graphic Material included in the Prospectus of Oppenheimer MidCap Fund:
"Annual Total Returns (Class A) (% as of 12/31 each year)":

      A bar chart will be included in the Prospectus of Oppenheimer MidCap
Fund (the "Fund") depicting the annual total returns of a hypothetical
investment in Class A shares of the Fund for its four most recent calendar
years, without deducting sales charges. Set forth below are the relevant data
points that will appear on the bar chart.

Calendar
Year                                Oppenheimer MidCap Fund
Ended                               Class A Shares
- -----                               --------------

12/31/98                              29.76%
12/31/99                              94.87%
12/31/00                             -10.84%
12/31/01                             -34.13%

- ------------------------------------------------------------------------------
Oppenheimer MidCap Fund
- ------------------------------------------------------------------------------
6801 South Tucson Way, Centennial, Colorado 80112-3924
1.800.225.5677

         Statement of Additional Information dated December 23, 2002

      This  Statement of  Additional  Information  is not a  Prospectus.  This
document  contains  additional  information  about  the Fund  and  supplements
information  in the  Prospectus  dated  December 23,  2002.  It should be read
together with the Prospectus.  You can obtain the Prospectus by writing to the
Fund's Transfer Agent,  OppenheimerFunds  Services,  at P.O. Box 5270, Denver,
Colorado  80217,  or by calling the  Transfer  Agent at the  toll-free  number
shown above, or by downloading it from the  OppenheimerFunds  Internet website
at www.oppenheimerfunds.com.

            Contents
- ------------------------------------------------------------------------------
                                                                        Page
About the Fund
Additional Information About the Fund's Investment Policies and Risks..  2
    The Fund's Investment Policies.....................................  2
    Other Investment Techniques and Strategies.........................  5
    Investment Restrictions............................................ 21
How the Fund is Managed ............................................... 22
    Organization and History........................................... 22
    Trustees and Officers of the Fund.................................. 24
    The Manager........................................................ 30
Brokerage Policies of the Fund......................................... 33
Distribution and Service Plans......................................... 35
Performance of the Fund................................................ 39

            About Your Account
- ------------------------------------------------------------------------------
How To Buy Shares...................................................... 44
How To Sell Shares..................................................... 55
How To Exchange Shares................................................. 59
Dividends, Capital Gains and Taxes..................................... 63
Additional Information About the Fund.................................. 68

            Financial Information About the Fund
- ------------------------------------------------------------------------------
Independent Auditor's Report........................................... 69
Financial Statements................................................... 70

Appendix A: Industry Classifications................................... A-1
Appendix B: Special Sales Charge Arrangements and Waivers.............. B-1

- ------------------------------------------------------------------------------
ABOUT THE FUND
- ------------------------------------------------------------------------------

    Additional Information About the Fund's Investment Policies and Risks

      The  investment  objective,  the principal  investment  policies and the
main risks of the Fund are  described  in the  Prospectus.  This  Statement of
Additional Information contains supplemental  information about those policies
and risks and the types of  securities  that the  Fund's  investment  Manager,
OppenheimerFunds,  Inc., (the  "Manager") can select for the Fund.  Additional
information  is also provided  about the  strategies  that the Fund may use to
try to achieve its objective.

The Fund's  Investment  Policies.  The composition of the Fund's portfolio and
the techniques and strategies that the Manager may use in selecting  portfolio
securities  will vary over time.  The Fund is not  required  to use all of the
investment  techniques and strategies  described below at all times in seeking
its  goal.  It  may  use  some  of  the  special  investment   techniques  and
strategies at some times or not at all.

      |X| Cyclical  Opportunities.  The Fund might also seek to take advantage
of changes in the business  cycle by investing in companies that are sensitive
to those  changes if the  Manager  believes  they have growth  potential.  For
example,  when the economy is  expanding,  companies in the consumer  durables
and   technology   sectors   might   benefit   and  offer   long-term   growth
opportunities.  Other cyclical industries include insurance,  for example. The
fund  focuses on  seeking  growth  over the long term,  but could seek to take
tactical   advantage  of  short-term  market  movements  or  events  affecting
particular issuers or industries.

      |X| Investments in Equity  Securities.  The Fund focuses its investments
in equity  securities of mid-cap growth companies.  Equity securities  include
common  stocks,   preferred  stocks,  rights  and  warrants,   and  securities
convertible into common stock. The Fund's  investments will primarily  include
stocks of  companies  having a market  capitalization  between $2 billion  and
$11.5  billion,  generally  measured  at the  time of the  Fund's  investment.
However,  the Fund is not required to sell securities of an issuer it holds if
the issuer's capitalization exceeds $11.5 billion.

      At times,  in the  Manager's  view,  the  market  may favor or  disfavor
securities  of  issuers  of  a  particular   capitalization  range.  Therefore
although  the Fund  normally  invests  at least  80% of its net  assets  (plus
borrowings  for  investment  purposes) of its assets in equity  securities  of
mid-cap issuers,  the Fund may change the proportion of its equity investments
in securities  of different  capitalization  ranges,  based upon the Manager's
judgment  of  where  the best  market  opportunities  are to seek  the  Fund's
objective.

      Growth  companies might be providing new products or services that could
enable them to capture a dominant or important market position.  They may have
a special area of expertise or the  capability to take advantage of changes in
demographic  factors in a more  profitable way than larger,  more  established
companies.

      Growth  companies  tend to  retain a large  part of their  earnings  for
research,  development or investment in capital assets. Therefore, they do not
tend to emphasize  paying  dividends,  and may not pay any  dividends for some
time. They are selected for the Fund's portfolio  because the Manager believes
the price of the stock will increase over the long term.

      Current income is not a criterion used to select  portfolio  securities.
However,  certain debt securities may be selected for the Fund's portfolio for
defensive  purposes  (including debt securities that the Manager  believes may
offer some opportunities for capital appreciation when stocks are disfavored).

      In  general,  securities  of mid-cap  issuers  may be subject to greater
price   volatility  in  general  than   securities  of  large-cap   companies.
Therefore,   to  the  degree   that  the  Fund  has   investments   in  medium
capitalization  companies  at times of market  volatility,  the  Fund's  share
price may fluctuate more than funds holding large cap securities.

            |_|  Over-the-Counter  Securities.  Mid-cap growth  companies that
are growth companies may offer greater  opportunities for capital appreciation
than securities of large, more established companies.  However,  securities of
mid-cap  companies  also  involve  greater  risks  than  securities  of larger
companies.   Securities  of  medium   capitalization   issuers  may  trade  on
securities exchanges or in the  over-the-counter  market. The over-the-counter
markets,  both in the U.S. and abroad, may have less liquidity than securities
exchanges.  That lack of  liquidity  can  affect the price the Fund is able to
obtain  when it wants to sell a  security,  because if there are fewer  buyers
and less demand for a particular security,  the Fund might not be able to sell
it at an  acceptable  price  or might  have to  reduce  the  price in order to
dispose of the security.

      In the U.S., the principal  over-the-counter  market is the NASDAQ Stock
Market,  Inc.,  which is regulated by the National  Association  of Securities
Dealers,  Inc.  It  consists  of an  electronic  quotation  system for certain
securities, and a security must have at least two market makers to be
included  in NASDAQ.  Other  over-the-counter  markets  exist in the U.S.,  as
well as those  abroad,  wherever  a dealer  is  willing  to make a market in a
particular security.

            |_|  Convertible  Securities.   Convertible  securities  are  debt
securities  that are convertible  into an issuer's  common stock.  Convertible
securities  rank senior to common stock in a corporation's  capital  structure
and  therefore  are  subject  to less  risk than  common  stock in case of the
issuer's bankruptcy or liquidation.

            The  value  of  a  convertible  security  is  a  function  of  its
"investment  value"  and  its  "conversion  value."  If the  investment  value
exceeds  the  conversion  value,  the  security  will  behave more like a debt
security,  and the security's  price will likely  increase when interest rates
fall and decrease when interest  rates rise. If the  conversion  value exceeds
the investment  value,  the security will behave more like an equity security:
it will  likely sell at a premium  over its  conversion  value,  and its price
will tend to fluctuate directly with the price of the underlying security.

            While convertible  securities are a form of debt security, in many
cases their conversion  feature (allowing  conversion into equity  securities)
causes  them to be regarded  more as "equity  equivalents."  As a result,  the
rating  assigned to the security has less impact on the  Manager's  investment
decision  with  respect  to  convertible   securities  than  in  the  case  of
non-convertible  fixed-income  securities.  To determine  whether  convertible
securities  should be regarded as "equity  equivalents,"  the Manager examines
the following factors:

(1)   whether, at the option of the investor,  the convertible security can be
               exchanged  for a fixed  number of shares of common stock of the
               issuer,
(2)   whether  the  issuer of the  convertible  securities  has  restated  its
               earnings  per share of common  stock on a fully  diluted  basis
               (considering  the  effect  of  conversion  of  the  convertible
               securities), and
(3)   the extent to which the convertible  security may be a defensive "equity
               substitute,"  providing  the  ability  to  participate  in  any
               appreciation in the price of the issuer's common stock.

            |_| Preferred Stock.  Preferred stock,  unlike common stock, has a
stated  dividend  rate  payable  from the  corporation's  earnings.  Preferred
stock  dividends may be cumulative or  non-cumulative.  "Cumulative"  dividend
provisions  require  all or a portion  of prior  unpaid  dividends  to be paid
before  dividends can be paid on the issuer's  common stock.  Preferred  stock
may be  "participating"  stock,  which  means  that  it may be  entitled  to a
dividend exceeding the stated dividend in certain cases.

            If interest  rates rise,  the fixed  dividend on preferred  stocks
may be less  attractive,  causing  the price of  preferred  stocks to decline.
Preferred  stock  may  have  mandatory  sinking  fund  provisions,  as well as
provisions  allowing  calls or redemptions  prior to maturity,  which can also
have a negative impact on prices when interest rates decline.  Preferred stock
generally  has a  preference  over  common  stock  on  the  distribution  of a
corporation's  assets  in the event of  liquidation  of the  corporation.  The
rights of preferred stock on  distribution  of a  corporation's  assets in the
event of a liquidation  are  generally  subordinate  to the rights  associated
with a corporation's debt securities.

      |_| Credit  Risk.  Convertible  securities  are subject to credit  risk.
Credit risk  relates to the  ability of the issuer of a debt to make  interest
or  principal  payments  on the  security  as they  become  due. If the issuer
fails to pay  interest,  the Fund's  income  may be reduced  and if the issuer
fails to repay principal,  the value of that bond and of the Fund's shares may
be  reduced.  The  Manager  may  rely to some  extent  on  credit  ratings  by
nationally-recognized  ratings  agencies  in  evaluating  the  credit  risk of
securities  selected  for  the  Fund's  portfolio.  It may  also  use  its own
research  and  analysis.  Many  factors  affect an  issuer's  ability  to make
timely  payments,  and the credit  risks of a  particular  security may change
over  time.  The  Fund  may  invest  in   higher-yielding   lower-grade   debt
securities (that is,  securities below investment  grade),  which have special
risks.  Those are securities  rated below the four highest  rating  categories
of Standard & Poor's Rating Service  (Standard & Poor's") or Moody's Investors
Service,  Inc.,  ("Moody's") or equivalent ratings of other rating agencies or
ratings assigned to a security by the Manager.

      |_|  Special  Risks  of  Lower-Grade   Securities.   "Lower-grade"  debt
securities  are those rated below  "investment  grade" which means they have a
rating  lower than "Baa" by Moody's or lower than "BBB" by  Standard & Poor's,
or similar  ratings by other rating  organizations.  If they are unrated,  and
are determined by the Manager to be of comparable  quality to debt  securities
rated  below  investment  grade,  they  are  included  in  limitation  on  the
percentage  of  the  Fund's  assets  that  can  be  invested  in   lower-grade
securities.

Among the special credit risks of lower-grade securities is the greater risk that
     the  issuer may  default  on its  obligation  to pay  interest  or to repay
     principal than in the case of investment-grade securities. The issuer's low
     creditworthiness  may increase the  potential  for  insolvency.  An overall
     decline in values in the high-yield  bond market is also more likely during
     a period of general economic downturn.  An economic downturn or an increase
     in interest rates could severely  disrupt the market for high-yield  bonds,
     adversely  affecting the values of outstanding bonds as well as the ability
     of  issuers  to pay  interest  or repay  principal.  In the case of foreign
     high-yield  bonds,  these  risks are in  addition  to the  special  risk of
     foreign  investing  discussed in the  Prospectus  and in this  Statement of
     Additional  Information.  To the extent they can be  converted  into stock,
     convertible  securities  may be less  subject  to some of these  risks than
     non-convertible  high-yield bonds,  since stock may be more liquid and less
     affected by some of these risk factors.

Whilesecurities  rated  "Baa" by  Moody's  or "BBB" by  Standard  and Poor's are
     investment-grade  and are not regarded as junk bonds,  those securities may
     be subject to special risks, and have some speculative characteristics.

     |_| Interest  Rate Risks.  In addition to credit  risks,  convertible  debt
securities  are  subject  to changes in value  when  prevailing  interest  rates
change.  When  prevailing  interest rates fall,  the values of outstanding  debt
securities  generally  rise,  and the bonds may sell for more  than  their  face
amount.  When  prevailing  interest rates rise,  the values of outstanding  debt
securities  generally  decline,  and the bonds may sell at a discount from their
face amount. The magnitude of these price changes is generally greater for bonds
with longer maturities.  Therefore, when the average maturity of the Fund's debt
securities  is longer,  its share price may fluctuate  more when interest  rates
change.

            |_| Rights and  Warrants.  The Fund can invest up to 5% of its net
assets in warrants or rights.  That 5%  limitation  does not apply to warrants
and rights the Fund has  acquired as part of units of  securities  or that are
attached  to other  securities  that the Fund  buys.  Warrants  basically  are
options to purchase equity  securities at specific prices valid for a specific
period of time.  Their prices do not  necessarily  move parallel to the prices
of the  underlying  securities.  Rights are similar to warrants,  but normally
have a short  duration  and are  distributed  directly  by the  issuer  to its
shareholders.   Rights  and  warrants  have  no  voting  rights,   receive  no
dividends and have no rights with respect to the assets of the issuer.

      |X|  Portfolio  Turnover.  "Portfolio  turnover"  describes  the rate at
which  the Fund  traded  its  portfolio  securities  during  its  last  fiscal
period.  For example,  if a fund sold all of its  securities  during the year,
its  portfolio  turnover  rate  would have been  100%.  The  Fund's  portfolio
turnover rate will  fluctuate from year to year. The Fund may have a portfolio
turnover rate of more than 100% annually.

      Increased  portfolio  turnover  creates higher brokerage and transaction
costs for the Fund,  which can reduce its overall  performance.  Additionally,
the realization of capital gains from selling portfolio  securities may result
in distributions  of taxable  long-term  capital gains to shareholders,  since
the Fund will  normally  distribute  all of its capital  gains  realized  each
year, to avoid excise taxes under the Internal Revenue Code.

Other  Investment  Techniques and  Strategies.  In seeking its objective,  the
Fund  from  time  to time  can use the  types  of  investment  strategies  and
investments  described  below.  It  is  not  required  to  use  all  of  these
strategies at all times, and at times may not use them.

      |X| Foreign  Securities.  "Foreign  securities"  include equity and debt
securities of companies  organized  under the laws of countries other than the
United States and debt  securities of foreign  governments  that are traded on
foreign securities exchanges or in foreign over-the-counter  markets. The Fund
can purchase  equity and debt  securities  (which may be  denominated  in U.S.
dollars or non-U.S.  currencies) issued by foreign  corporations,  or that are
issued or guaranteed by certain  supranational  entities (described below), or
foreign  governments  or their  agencies or  instrumentalities.  These include
securities  issued by U.S.  corporations  denominated in non-U.S.  currencies.
In  normal  market  conditions  the Fund does not  expect to hold  significant
amounts of foreign debt securities.

      Securities  of  foreign   issuers  that  are   represented  by  American
Depository  Receipts  or that are  listed  on a U.S.  securities  exchange  or
traded  in the  U.S.  over-the-counter  markets  are not  considered  "foreign
securities"  for the  purpose of the Fund's  investment  allocations.  That is
because they are not subject to some of the special  considerations and risks,
discussed below, that apply to foreign securities traded and held abroad.

      Investing in foreign  securities offers potential benefits not available
from  investing  solely in  securities of domestic  issuers.  They include the
opportunity  to  invest  in  foreign  issuers  that  appear  to  offer  growth
potential,  or in foreign  countries with economic policies or business cycles
different  from  those of the U.S.,  or to reduce  fluctuations  in  portfolio
value by taking  advantage  of  foreign  stock  markets  that do not move in a
manner parallel to U.S.  markets.  The Fund will hold foreign currency only in
connection with the purchase or sale of foreign securities.

            |_|  Risks  of   Foreign   Investing.   Investments   in   foreign
securities  may offer  special  opportunities  for  investing but also present
special  additional  risks and  considerations  not typically  associated with
investments in domestic securities. Some of these additional risks are:

o     reduction of income by foreign taxes;
o     fluctuation in value of foreign  investments  due to changes in currency
         rates  or  currency  control   regulations  (for  example,   currency
         blockage);
o     transaction charges for currency exchange;
o     lack of public information about foreign issuers;
o     lack of uniform  accounting,  auditing and financial reporting standards
         in foreign  countries  comparable  to those  applicable  to  domestic
         issuers;
o     less volume on foreign exchanges than on U.S. exchanges;
o     greater  volatility  and less  liquidity on foreign  markets than in the
         U.S.;
o     less  governmental  regulation of foreign  issuers,  stock exchanges and
         brokers than in the U.S.;
o     greater difficulties in commencing lawsuits;
o     higher brokerage commission rates than in the U.S.;
o     increased  risks of delays in  settlement of portfolio  transactions  or
         loss of certificates for portfolio securities;
o     possibilities   in  some   countries  of   expropriation,   confiscatory
         taxation,  political,  financial  or social  instability  or  adverse
         diplomatic developments; and
o     unfavorable   differences   between   the  U.S.   economy   and  foreign
         economies.

      In  the  past,  U.S.   government   policies  have  discouraged  certain
investments abroad by U.S. investors,  through taxation or other restrictions,
and it is possible that such restrictions could be re-imposed.

      |_|  Special  Risks  of  Emerging   Markets.   Emerging  and  developing
markets abroad may also offer special  opportunities  for growth investing but
have  greater  risks than more  developed  foreign  markets,  such as those in
Europe,  Canada,  Australia,  New  Zealand  and Japan.  There may be even less
liquidity in their securities markets,  and settlements of purchases and sales
of  securities  may be  subject  to  additional  delays.  They are  subject to
greater  risks of  limitations  on the  repatriation  of  income  and  profits
because  of  currency   restrictions  imposed  by  local  governments.   Those
countries  may also be subject to the risk of greater  political  and economic
instability,  which can greatly  affect the volatility of prices of securities
in those countries.

      |X|  Investing in Small,  Unseasoned  Companies.  The Fund can invest in
securities  of small,  unseasoned  companies.  These are  companies  that have
been in operation for less than three (3) years,  including the  operations of
any  predecessors.  Securities of these companies may be subject to volatility
in their prices.  They may have a limited trading market,  which may adversely
affect  the  Fund's  ability  to  dispose of them and can reduce the price the
Fund might be able to obtain  for them.  Other  investors  that own a security
issued by a small,  unseasoned  issuer for which  there is  limited  liquidity
might  trade  the  security  when the Fund is  attempting  to  dispose  of its
holdings of that  security.  In that case the Fund might receive a lower price
for  its  holdings   than  might   otherwise  be  obtained.   These  are  more
speculative securities and can increase the Fund's overall portfolio risks.

      |X| Repurchase  Agreements.  The Fund can acquire  securities subject to
repurchase  agreements.  It  might  do  so  for  liquidity  purposes  to  meet
anticipated  redemptions  of Fund  shares,  or pending the  investment  of the
proceeds  from sales of Fund shares,  or pending the  settlement  of portfolio
securities  transactions,  or for temporary defensive  purposes,  as described
below.

      In a  repurchase  transaction,  the  Fund  buys  a  security  from,  and
simultaneously   resells  it  to,  an  approved  vendor  for  delivery  on  an
agreed-upon  future date.  The resale price  exceeds the purchase  price by an
amount that reflects an  agreed-upon  interest  rate  effective for the period
during which the repurchase  agreement is in effect.  Approved vendors include
U.S.  commercial banks, U.S. branches of foreign banks, or broker-dealers that
have been  designated as primary dealers in government  securities.  They must
meet credit  requirements  set by the Fund's  Board of  Trustees  from time to
time.

      The  majority of these  transactions  run from day to day,  and delivery
pursuant  to the  resale  typically  occurs  within  one to  five  days of the
purchase.  Repurchase  agreements  having a  maturity  beyond  seven  days are
subject to the Fund's limits on holding  illiquid  investments.  The Fund will
not enter into a  repurchase  agreement  that  causes more than 15% of its net
assets to be subject to repurchase  agreements  having a maturity beyond seven
(7) days.  There is no limit on the amount of the  Fund's net assets  that may
be subject to repurchase agreements having maturities of seven days or less.

      Repurchase  agreements,  considered "loans" under the Investment Company
Act  of  1940  (the  "Investment  Company  Act"),  are  collateralized  by the
underlying  security.  The Fund's  repurchase  agreements  require that at all
times  while  the  repurchase  agreement  is  in  effect,  the  value  of  the
collateral  must equal or exceed the repurchase  price to fully  collateralize
the  repayment  obligation.  However,  if the  vendor  fails to pay the resale
price on the  delivery  date,  the Fund may incur  costs in  disposing  of the
collateral and may  experience  losses if there is any delay in its ability to
do so. The Manager  will  monitor  the  vendor's  creditworthiness  to confirm
that the  vendor  is  financially  sound  and will  continuously  monitor  the
collateral's value.

      Pursuant to an  Exemptive  Order issued by the  Securities  and Exchange
Commission,  the Fund,  along with other  affiliated  entities  managed by the
Manager,  may  transfer  uninvested  cash  balances  into  one or  more  joint
repurchase  accounts.  These  balances are invested in one or more  repurchase
agreements,  secured  by  U.S.  government  securities.  Securities  that  are
pledged as collateral for  repurchase  agreements are held by a custodian bank
until the agreements mature. Each joint repurchase  arrangement  requires that
the  market  value  of the  collateral  be  sufficient  to cover  payments  of
interest and  principal;  however,  in the event of default by the other party
to the agreement,  retention or sale of the collateral may be subject to legal
proceedings.

      |X|  Illiquid  and  Restricted   Securities.   Under  the  policies  and
procedures   established  by  the  Fund's  Board  of  Trustees,   the  Manager
determines the liquidity of certain of the Fund's  investments.  To enable the
Fund to sell its holdings of a restricted  security not  registered  under the
applicable  securities laws, the Fund may have to cause those securities to be
registered.   The  expenses  of  registering   restricted  securities  may  be
negotiated  by the  Fund  with  the  issuer  at the  time  the  Fund  buys the
securities.  When the Fund must arrange  registration  because the Fund wishes
to sell the security,  a  considerable  period may elapse between the time the
decision is made to sell the security and the time the security is  registered
so that the Fund could sell it. The Fund would bear the risks of any  downward
price fluctuation during that period.

      The  Fund  can  also  acquire  restricted   securities  through  private
placements.  Those  securities have  contractual  restrictions on their public
resale.  Those  restrictions  might limit the Fund's ability to dispose of the
securities and might lower the amount the Fund could realize upon the sale.

      The  Fund  has  limitations   that  apply  to  purchases  of  restricted
securities,  as stated in the Prospectus.  Those  percentage  restrictions are
not fundamental  policies and do not limit purchases of restricted  securities
that are eligible for sale to qualified  institutional  purchasers  under Rule
144A of the Securities Act of 1933, if those  securities  have been determined
to be liquid by the Manager under Board-approved guidelines.  Those guidelines
take  into  account  the  trading   activity  for  such   securities  and  the
availability of reliable pricing  information,  among other factors.  If there
is a lack of trading  interest in a particular Rule 144A security,  the Fund's
holdings  of  that  security  may  be  considered  to  be  illiquid.  Illiquid
securities include repurchase agreements maturing in more than seven days.

      |X|  Loans  of  Portfolio  Securities.   To  raise  cash  for  liquidity
purposes,  the Fund can lend its portfolio securities to brokers,  dealers and
other  types  of  financial  institutions  approved  by the  Fund's  Board  of
Trustees.  These  loans are  limited  to not more than 25% of the value of the
Fund's total  assets.  The Fund  currently  does not intend to engage in loans
of securities,  but if it does so, such loans will not likely exceed 5% of the
Fund's total assets.

      There are some risks in connection  with  securities  lending.  The Fund
might experience a delay in receiving additional  collateral to secure a loan,
or a delay in  recovery of the loaned  securities  if the  borrower  defaults.
The  Fund  must  receive  collateral  for a  loan.  Under  current  applicable
regulatory  requirements  (which are subject to change),  on each business day
the  loan  collateral  must be at  least  equal  to the  value  of the  loaned
securities.  It must consist of cash,  bank letters of credit,  securities  of
the U.S.  government  or its  agencies  or  instrumentalities,  or other  cash
equivalents  in which the Fund is permitted  to invest.  To be  acceptable  as
collateral,  letters of credit must obligate a bank to pay amounts demanded by
the Fund if the  demand  meets  the  terms  of the  letter.  The  terms of the
letter of credit and the issuing bank both must be satisfactory to the Fund.

      When it  lends  securities,  the  Fund  receives  amounts  equal  to the
dividends or interest on loaned  securities.  It also  receives one or more of
(a) negotiated loan fees, (b) interest on securities  used as collateral,  and
(c)  interest  on any  short-term  debt  securities  purchased  with such loan
collateral.  Either type of  interest  may be shared  with the  borrower.  The
Fund may also pay reasonable  finder's,  custodian and administrative  fees in
connection  with  these  loans.  The  terms  of the  Fund's  loans  must  meet
applicable  tests under the Internal  Revenue Code and must permit the Fund to
reacquire  loaned  securities  on five (5) days'  notice or in time to vote on
any important matter.

      |X|  Borrowing  for  Leverage.  The Fund has the  ability  to borrow for
leverage up to 10% of the value of its net assets  from banks on an  unsecured
basis to invest the borrowed funds in portfolio  securities.  This speculative
technique  is  known as  "leverage."  The Fund may  borrow  only  from  banks.
Currently,  under the  Investment  Company  Act, a mutual fund may borrow only
from  banks and the  maximum  amount it may borrow is up to  one-third  of its
total  assets  (including  the  amount  borrowed)  less  all  liabilities  and
indebtedness  other than  borrowing.  If the value of the Fund's  assets fails
to meet this 300% asset  coverage  requirement,  the Fund will reduce its bank
debt within three days to meet the requirement.  To do so, the Fund might have
to sell a portion of its investments at a disadvantageous time.

      The Fund will pay interest on these  loans,  and that  interest  expense
will raise the  overall  expenses  of the Fund and reduce its  returns.  If it
does borrow,  its expenses will be greater than  comparable  funds that do not
borrow  for  leverage.  Additionally,  the  Fund's  net asset  value per share
might  fluctuate  more than that of funds that do not borrow.  Currently,  the
Fund does not  contemplate  using this  technique,  but if it does so, it will
not likely do so to a substantial degree.

|X|   Interfund Borrowing Arrangements. Consistent with its fundamental
         policies and pursuant to an exemptive order issued by the Securities
         and Exchange Commission ("SEC"), the Fund may engage in borrowing
         and lending activities with other funds in the OppenheimerFunds
         complex. Borrowing money from affiliated funds may afford the Fund
         the flexibility to use the most cost-effective alternative to
         satisfy its borrowing requirements. Lending money to an affiliated
         fund may allow the Fund to obtain a higher rate of return than it
         could from interest rates on alternative short-term investments.

o     Interfund Borrowing. The Fund will not borrow from affiliated funds
unless the terms of the borrowing arrangement are at least as favorable as
the terms the Fund could otherwise negotiate with a third party.  To assure
that the Fund will not be disadvantaged by borrowing from an affiliated fund,
certain safeguards may be implemented.  Examples of these safeguards include
the following:
o     the Fund will not borrow money from affiliated funds unless the
               interest rate is more favorable than available bank loan
               rates;
o     the Fund's borrowing from affiliated funds must be consistent with its
               investment objective and investment policies;
o     the loan rates will be the average of the overnight repurchase
               agreement rate available through the OppenheimerFunds joint
               repurchase agreement account and  a pre-established formula
               based on quotations from independent banks to approximate the
               lowest interest rate at which bank loans would be available to
               the Fund;
o     if the Fund has outstanding borrowings from all sources greater than
               10% of its total assets, then the Fund must secure each
               additional outstanding interfund loan by segregating liquid
               assets of the Fund as collateral;
o     the Fund cannot borrow from an affiliated fund in excess of 125% of its
               total redemptions for the preceding seven days;
o     each interfund loan may be repaid on any day by the Fund; and
o     the Trustees will be provided with a report of all interfund loans and
               the Trustees will monitor all such borrowings to ensure that
               the Fund's participation is appropriate.

      There is a risk that a borrowing fund could have a loan called on one
day's notice.  In that circumstance, the Fund might have to borrow from a
bank at a higher interest cost if money to lend were not available from
another Oppenheimer fund.

      |X|  Derivatives.  The  Fund  can  invest  in a  variety  of  derivative
investments to seek income for liquidity needs or for hedging  purposes.  Some
derivative  investments the Fund can use are the hedging instruments described
below in this Statement of Additional Information.  However, the Fund does not
use,  and  does  not  currently  contemplate  using,  derivatives  or  hedging
instruments  to a  significant  degree  and is not  obligated  to use  them in
seeking its objective.

      Some of the  derivative  investments  the  Fund  can use  include  "debt
exchangeable   for  common  stock"  of  an  issuer  or   "equity-linked   debt
securities"  of an issuer.  At maturity,  the debt  security is exchanged  for
common  stock of the issuer or it is  payable in an amount  based on the price
of the  issuer's  common  stock at the  time of  maturity.  Both  alternatives
present a risk  that the  amount  payable  at  maturity  will be less than the
principal  amount of the debt because the price of the  issuer's  common stock
might not be as high as the Manager expected.

Investment in Other Investment Companies. The Fund can also invest in the
securities of other investment companies, which can include open-end funds,
closed-end funds and unit investment trusts, subject to the limits set forth
in the Investment Company Act that apply to those types of investments.  For
example, the Fund can invest in Exchange-Traded Funds, which are typically
open-end funds or unit investment trusts, listed on a stock exchange.  The
Fund might do so as a way of gaining exposure to the segments of the equity
or fixed-income markets represented by the Exchange-Traded Funds' portfolio,
at times when the Fund may not be able to buy those portfolio securities
directly.

Investing   in  another   investment   company  may  involve  the  payment  of
substantial  premiums above the value of such investment  company's  portfolio
securities  and is subject to limitations  under the  Investment  Company Act.
The Fund does not intend to invest in other  investment  companies  unless the
Manager  believes that the potential  benefits of the  investment  justify the
payment of any premiums or sales  charges.  As a shareholder  of an investment
company,  the Fund would be subject to its  ratable  share of that  investment
company's expenses,  including its advisory and administration  expenses.  The
Fund does not anticipate  investing a substantial  amount of its net assets in
shares of other investment companies.

      |X| Hedging.  Although the Fund does not  anticipate  the  extensive use
of  hedging  instruments,  the Fund  can use  hedging  instruments.  It is not
required to do so in seeking its goal. To attempt to protect against  declines
in the  market  value of the  Fund's  portfolio,  to permit the Fund to retain
unrealized gains in the value of portfolio  securities which have appreciated,
or to facilitate selling securities for investment reasons, the Fund could:

      |_|   sell futures contracts,
      |_|   buy puts on such futures or on securities, or
      |_|   write covered  calls on  securities or futures.  Covered calls can
         also be used to seek  income,  but the  Manager  does not  expect  to
         engage extensively in that practice.

      The Fund can use  hedging  to  establish  a position  in the  securities
market as a temporary  substitute for  purchasing  particular  securities.  In
that case the Fund would  normally  seek to purchase the  securities  and then
terminate  that hedging  position.  The Fund might also use this type of hedge
to attempt to protect  against the possibility  that its portfolio  securities
would not be fully  included  in a rise in value of the  market.  To do so the
Fund could:

      |_| buy futures, or
      |_| buy calls on such futures or on securities.

      The Fund's  strategy of hedging with futures and options on futures will
be incidental  to the Fund's  activities in the  underlying  cash market.  The
particular  hedging  instruments  the Fund can use are  described  below.  The
Fund  may  employ  new  hedging  instruments  and  strategies  when  they  are
developed,  if  those  investment  methods  are  consistent  with  the  Fund's
investment   objective  and  are  permissible  under  applicable   regulations
governing the Fund.

      |_|  Futures.  The Fund can buy and sell futures  contracts  that relate
to (1) stock  indices  (these are referred to as "stock index  futures"),  (2)
foreign  currencies  (these are referred to as "forward  contracts"),  and (3)
commodities (these are referred to as "commodity futures").

      A  broadly-based  stock  index is used as the  basis for  trading  stock
index  futures.  In some cases stock indices may be based on stocks of issuers
in a  particular  industry  or  group of  industries.  A stock  index  assigns
relative  values  to the  common  stocks  included  in the index and its value
fluctuates  in response to the changes in value of the  underlying  stocks.  A
stock index cannot be purchased or sold  directly.  These  contracts  obligate
the seller to deliver,  and the  purchaser  to take cash to settle the futures
obligation.  There is no delivery of the  underlying  securities to settle the
obligation.

The  Fund can  invest a portion  of its assets in  commodity  future  contracts.
     Commodity  futures  may be  based  upon  commodities  within  five (5) main
     commodity  groups:  (1) energy,  which  includes  crude oil,  natural  gas,
     gasoline and heating oil; (2) livestock,  which  includes  cattle and hogs;
     (3) agriculture,  which includes wheat,  corn,  soybeans,  cotton,  coffee,
     sugar and cocoa; (4) industrial metals,  which includes  aluminum,  copper,
     lead, nickel,  tin and zinc; and (5) precious metals,  which includes gold,
     platinum  and silver.  The Fund may  purchase  and sell  commodity  futures
     contracts,  options  on  futures  contracts  and  options  and  futures  on
     commodity  indices with respect to these five main commodity groups and the
     individual  commodities  within  each  group,  as well as  other  types  of
     commodities.

      No money is paid or  received  by the Fund on the  purchase or sale of a
future.  Upon entering into a futures  transaction,  the Fund will be required
to deposit an initial  margin  payment  with the futures  commission  merchant
(the "futures  broker").  Initial  margin  payments will be deposited with the
Fund's  custodian bank in an account  registered in the futures broker's name.
However,  the  futures  broker  can gain  access to that  account  only  under
specified  conditions.  As the future is marked to market  (that is, its value
on the  Fund's  books is  changed)  to reflect  changes  in its market  value,
subsequent  margin payments,  called variation  margin,  will be paid to or by
the futures broker daily.

      At any time prior to  expiration  of the  future,  the Fund may elect to
close out its position by taking an opposite  position,  at which time a final
determination  of  variation  margin is made and any  additional  cash must be
paid by or  released  to the  Fund.  Any  loss or gain on the  future  is then
realized  by the Fund  for tax  purposes.  All  futures  transactions  (except
forward  contracts) are effected  through a clearinghouse  associated with the
exchange on which the contracts are traded.

            |_| Put and  Call  Options.  The  Fund  can buy and  sell  certain
kinds of put options  ("puts")  and call options  ("calls").  The fund can buy
and sell exchange-traded and over-the-counter put and call options,  including
options on indices, securities, currencies, commodities and futures.

            |_| Writing  Covered  Call  Options.  The Fund can write (that is,
sell)  covered  calls.  If the Fund sells a call  option,  it must be covered.
That means the Fund must own the  security  subject to the call while the call
is  outstanding,  or, for certain  types of calls,  the call may be covered by
segregating  liquid  assets to enable the Fund to satisfy its  obligations  if
the call is  exercised.  Not more than 25% of the Fund's  total  assets may be
subject to calls the Fund writes.

      When the Fund writes a call, it receives  cash (a premium).  In the case
of a call on a security,  the Fund agrees to sell the underlying security to a
purchaser of a corresponding  call on the same security during the call period
at a fixed exercise  price  regardless of market price changes during the call
period.  The call period is usually not more than nine  months.  The  exercise
price may differ from the market price of the  underlying  security.  The Fund
has the risk of loss that the price of the  underlying  security  may  decline
during  the  call  period.  That  risk may be  offset  to some  extent  by the
premium  the  Fund  receives.  If the  value of the  investment  does not rise
above the call  price,  it is likely  that the call will lapse  without  being
exercised.  In that  case  the  Fund  would  keep  the  cash  premium  and the
investment.

When the Fund writes a call on an index,  it receives  cash (a premium).  If the
     buyer of the call  exercises  it, the Fund will pay an amount of cash equal
     to the  difference  between the closing  price of the call and the exercise
     price,  multiplied by a specified  multiple that determines the total value
     of the call for each point of  difference.  If the value of the  underlying
     investment  does not rise above the call  price it is likely  that the call
     will lapse without being  exercised.  In that case, the Fund would keep the
     cash premium.

      The  Fund's  custodian,  or  a  securities  depository  acting  for  the
custodian,  will act as the Fund's escrow agent, through the facilities of the
Options Clearing  Corporation ("OCC"), as to the investments on which the Fund
has  written  calls  traded  on  exchanges  or as to other  acceptable  escrow
securities.  In that way, no margin will be  required  for such  transactions.
OCC will release the  securities  on the  expiration of the option or when the
Fund enters into a closing transaction.

      To  terminate  its  obligation  on a call it has  written,  the Fund may
purchase a corresponding  call in a "closing  purchase  transaction." The Fund
will then  realize a profit or loss,  depending  upon  whether  the net of the
amount of the option  transaction  costs and the premium  received on the call
the Fund  wrote is more or less than the price of the call the Fund  purchases
to  close  out the  transaction.  The Fund may  realize  a profit  if the call
expires unexercised,  because the Fund will retain the underlying security and
the  premium  it  received  when it  wrote  the  call.  Any such  profits  are
considered  short-term  capital gains for federal income tax purposes,  as are
the premiums on lapsed calls.  When  distributed  by the Fund they are taxable
as ordinary income.  If the Fund cannot effect a closing purchase  transaction
due to the lack of a  market,  it will  have to hold the  callable  securities
until the call expires or is exercised.

|_|   Writing Uncovered Call Options on Futures  Contracts.  The Fund may also
write  calls on a futures  contract  without  owning the  futures  contract or
securities  deliverable under the contract.  To do so, at the time the call is
written,  the Fund must cover the call by  segregating  an  equivalent  dollar
amount of liquid assets.  The Fund will segregate  additional liquid assets if
the value of the  segregated  assets drops below 100% of the current  value of
the  future.  Because of this  segregation  requirement,  in no  circumstances
would the Fund's  receipt of an exercise  notice as to that future require the
Fund to deliver a futures  contract.  It would  simply put the Fund in a short
futures position, which is permitted by the Fund's hedging policies.

|_|   Writing Put Options.  The Fund can sell put  options.  A put option on a
security  gives the purchaser the right to sell, and the writer the obligation
to buy,  the  underlying  security  at the  exercise  price  during the option
period.  The Fund  will not write  puts if, as a result,  more than 50% of the
Fund's net assets would have to be segregated to cover put options.

      If the Fund sells a put option,  it must be covered by segregated liquid
assets.  The premium the Fund receives from writing a put option  represents a
profit,  as long as the price of the underlying  investment  remains above the
exercise  price of the put.  However,  the Fund also  assumes  the  obligation
during the option period to buy the  underlying  investment  from the buyer of
the put at the  exercise  price,  even if the  value of the  investment  falls
below the exercise price.  If the Fund writes a put that expires  unexercised,
the  Fund  realizes  a gain in the  amount  of the  premium  less  transaction
costs.  If the put is  exercised,  the Fund must  fulfill  its  obligation  to
purchase the  underlying  investment  at the exercise  price.  That price will
usually  exceed  the market  value of the  investment  at that  time.  In that
case,  the Fund may incur a loss if it sells the underlying  investment.  That
loss will be equal to the sum of the sale price of the  underlying  investment
and  the  premium  received  minus  the  sum of the  exercise  price  and  any
transaction costs incurred.

      When  writing a put option on a security,  to secure its  obligation  to
pay for the  underlying  security the Fund will identify  liquid assets on its
books  having a value  equal to or  greater  than  the  exercise  price of the
underlying  security.  The Fund therefore forgoes the opportunity of investing
the segregated assets or writing calls against those assets.

      As long as the Fund's obligation as the put writer continues,  it may be
assigned an exercise  notice by the exchange or  broker-dealer  through  which
the put was sold.  That  notice will  require  the Fund to  exchange  currency
(for a put  written on a  currency)  at the  specified  rate of exchange or to
take  delivery of the  underlying  security  and pay the exercise  price.  The
Fund has no control  over when it may be required to purchase  the  underlying
security,  since it may be assigned  an  exercise  notice at any time prior to
the  termination of its  obligation as the writer of the put. That  obligation
terminates  upon  expiration of the put. It may also  terminate if, before the
Fund  receives  an  exercise  notice,  the Fund  effects  a  closing  purchase
transaction  by purchasing a put of the same series as it sold.  Once the Fund
has been  assigned an exercise  notice,  it cannot  effect a closing  purchase
transaction.

      The Fund may decide to effect a closing purchase  transaction to realize
a profit  on an  outstanding  put  option it has  written  or to  prevent  the
underlying  security from being put. Effecting a closing purchase  transaction
will permit the Fund to write  another  put option on the  security or to sell
the  security and use the proceeds  from the sale for other  investments.  The
Fund  will  realize  a profit  or loss  from a  closing  purchase  transaction
depending  on  whether  the cost of the  transaction  is less or more than the
premium  received  from writing the put option.  Any profits from writing puts
are  considered  short-term  capital gains for federal tax purposes,  and when
distributed by the Fund, are taxable as ordinary income.

|_|   Purchasing  Calls  and  Puts.  The Fund can  purchase  calls to  protect
against the possibility  that the Fund's  portfolio will not participate in an
anticipated  rise in the securities  market.  When the Fund buys a call (other
than in a closing purchase transaction),  it pays a premium. The Fund then has
the right to buy the underlying  investment  from a seller of a  corresponding
call on the  same  investment  during  the  call  period  at a fixed  exercise
price.  The Fund  benefits only if it sells the call at a profit or if, during
the call period,  the market price of the  underlying  investment is above the
sum of the call price plus the transaction  costs and the premium paid for the
call and the Fund  exercises  the call. If the Fund does not exercise the call
or sell it (whether or not at a profit),  the call will  become  worthless  at
its  expiration  date.  In that case the Fund will have paid the  premium  but
lost the right to purchase the underlying investment.

      The Fund can buy puts whether or not it holds the underlying  investment
in its  portfolio.  When the Fund  purchases  a put,  it pays a  premium  and,
except as to puts on indices, has the right to sell the underlying  investment
to a seller of a put on a corresponding  investment during the put period at a
fixed exercise price.

      Buying a put on  securities or futures the Fund owns enables the Fund to
attempt to  protect  itself  during  the put  period  against a decline in the
value of the  underlying  investment  below the exercise  price by selling the
underlying  investment  at the exercise  price to a seller of a  corresponding
put. If the market  price of the  underlying  investment  is equal to or above
the exercise price and, as a result,  the put is not exercised or resold,  the
put will become  worthless at its expiration  date. In that case the Fund will
have paid the  premium but lost the right to sell the  underlying  investment.
However,  the Fund may sell the put prior to its expiration.  That sale may or
may not be at a profit.

      Buying a put on an  investment  the Fund  does not own (such as an index
or  future)  permits  the  Fund to  resell  the  put or to buy the  underlying
investment  and sell it at the  exercise  price.  The  resale  price will vary
inversely to the price of the  underlying  investment.  If the market price of
the underlying  investment is above the exercise  price and, as a result,  the
put is not exercised, the put will become worthless on its expiration date.

      When the Fund  purchases a call or put on an index or Future,  it pays a
premium,  but  settlement is in cash rather than by delivery of the underlying
investment  to the  Fund.  Gain or loss  depends  on  changes  in the index in
question  (and thus on price  movements in the  securities  market  generally)
rather than on price movements in individual securities or futures contracts.

      The Fund may buy a call or put only if,  after the  purchase,  the value
of all call and put options  held by the Fund will not exceed 5% of the Fund's
total assets.

            |_| Buying and  Selling  Options on Foreign  Currencies.  The Fund
can buy and sell calls and puts on foreign  currencies.  They include puts and
calls  that  trade  on  a  securities  or  commodities   exchange  or  in  the
over-the-counter  markets  or are quoted by major  recognized  dealers in such
options.  The Fund could use these  calls and puts to try to  protect  against
declines  in the  dollar  value of foreign  securities  and  increases  in the
dollar cost of foreign securities the Fund wants to acquire.

      If the  Manager  anticipates  a rise in the  dollar  value of a  foreign
currency in which  securities  to be acquired are  denominated,  the increased
cost of those  securities  may be  partially  offset  by  purchasing  calls or
writing puts on that foreign  currency.  If the Manager  anticipates a decline
in the dollar value of a foreign currency,  the decline in the dollar value of
portfolio  securities  denominated in that currency might be partially  offset
by writing calls or purchasing  puts on that foreign  currency.  However,  the
currency rates could fluctuate in a direction  adverse to the Fund's position.
The Fund will then have  incurred  option  premium  payments  and  transaction
costs without a corresponding benefit.

      A call the Fund writes on a foreign  currency is  "covered"  if the Fund
owns the underlying  foreign  currency  covered by the call or has an absolute
and immediate right to acquire that foreign currency  without  additional cash
consideration (or it can do so for additional cash  consideration  from liquid
assets  identified  on the Fund's books upon  conversion  or exchange of other
foreign currency held in its portfolio.

      The Fund  could  write a call on a foreign  currency  to provide a hedge
against a decline in the U.S.  dollar value of a security  which the Fund owns
or has  the  right  to  acquire  and  which  is  denominated  in the  currency
underlying  the  option.  That  decline  might  be one that  occurs  due to an
expected   adverse  change  in  the  exchange   rate.   This  is  known  as  a
"cross-hedging"  strategy. In those circumstances,  the Fund covers the option
by  identifying  liquid  assets  on its  books  having  a value  equal  to the
aggregate amount of the Fund's commitment under such option position.

      |_| Risks of  Hedging  with  Options  and  Futures.  The use of  hedging
instruments  requires  special  skills and knowledge of investment  techniques
that are different than what is required for normal portfolio  management.  If
the  Manager  uses a hedging  instrument  at the wrong  time or judges  market
conditions  incorrectly,  hedging strategies may reduce the Fund's return. The
Fund could also  experience  losses if the prices of its  futures  and options
positions were not correlated with its other investments.

      The Fund's option  activities  could affect its portfolio  turnover rate
and  brokerage  commissions.  The exercise of calls  written by the Fund might
cause the Fund to sell  related  portfolio  securities,  thus  increasing  its
turnover rate.  The exercise by the Fund of puts on securities  will cause the
sale of underlying  investments,  increasing portfolio turnover.  Although the
decision  whether to  exercise  a put it holds is within  the Fund's  control,
holding  a put  might  cause  the Fund to sell  the  related  investments  for
reasons that would not exist in the absence of the put.

      The Fund could pay a  brokerage  commission  each time it buys a call or
put,  sells a call,  or buys or sells an  underlying  investment in connection
with the  exercise of a call or put.  Those  commissions  could be higher on a
relative  basis  than the  commissions  for direct  purchases  or sales of the
underlying  investments.  Premiums  paid for  options are small in relation to
the market value of the  underlying  investments.  Consequently,  put and call
options  offer large amounts of leverage.  The leverage  offered by trading in
options  could  result in the Fund's net asset value being more  sensitive  to
changes in the value of the underlying investment.

      If a covered  call  written by the Fund is  exercised  on an  investment
that has increased in value,  the Fund will be required to sell the investment
at the  call  price.  It  will  not be  able  to  realize  any  profit  if the
investment has increased in value above the call price.

      An option  position  may be closed  out only on a market  that  provides
secondary  trading for options of the same  series,  and there is no assurance
that a liquid  secondary  market  will exist for any  particular  option.  The
Fund might  experience  losses if it could not close out a position because of
an illiquid market for the future or option.

      There is a risk in using short hedging by selling  futures or purchasing
puts on  broadly-based  indices or  futures  to  attempt  to  protect  against
declines  in the value of the Fund's  portfolio  securities.  The risk is that
the prices of the futures or the applicable  index will correlate  imperfectly
with the  behavior of the cash prices of the Fund's  securities.  For example,
it is possible  that while the Fund has used  hedging  instruments  in a short
hedge,  the market may  advance  and the value of the  securities  held in the
Fund's  portfolio might decline.  If that occurred,  the Fund would lose money
on the hedging  instruments  and also experience a decline in the value of its
portfolio securities.  However, while this could occur for a very brief period
or to a very small degree,  over time the value of a diversified  portfolio of
securities  will tend to move in the same  direction as the indices upon which
the hedging instruments are based.

      The risk of imperfect  correlation  increases as the  composition of the
Fund's  portfolio  diverges  from the  securities  included in the  applicable
index.  To compensate for the imperfect  correlation of movements in the price
of the  portfolio  securities  being hedged and  movements in the price of the
hedging  instruments,  the Fund  might use  hedging  instruments  in a greater
dollar amount than the dollar amount of portfolio  securities being hedged. It
might  do so if the  historical  volatility  of the  prices  of the  portfolio
securities  being  hedged  is  more  than  the  historical  volatility  of the
applicable index.

      The ordinary  spreads between prices in the cash and futures markets are
subject to  distortions,  due to  differences  in the nature of those markets.
First,  all  participants  in the futures market are subject to margin deposit
and maintenance  requirements.  Rather than meeting  additional margin deposit
requirements,   investors  may  close  futures  contracts  through  offsetting
transactions which could distort the normal relationship  between the cash and
futures  markets.  Second,  the  liquidity  of the futures  market  depends on
participants  entering  into  offsetting  transactions  rather  than making or
taking delivery.  To the extent  participants decide to make or take delivery,
liquidity in the futures market could be reduced,  thus producing  distortion.
Third, from the point of view of speculators,  the deposit requirements in the
futures  market are less onerous than margin  requirements  in the  securities
markets.  Therefore,  increased  participation  by  speculators in the futures
market may cause temporary price distortions.

      The Fund can use  hedging  instruments  to  establish  a position in the
securities  markets as a temporary  substitute  for the purchase of individual
securities  (long  hedging) by buying  futures  and/or calls on such  futures,
broadly-based  indices or on  securities.  It is  possible  that when the Fund
does so the market might  decline.  If the Fund then  concludes  not to invest
in securities  because of concerns  that the market might  decline  further or
for other  reasons,  the Fund will  realize a loss on the hedging  instruments
that is not offset by a reduction in the price of the securities purchased.

      |_| Forward  Contracts.  Forward contracts are foreign currency exchange
contracts.  They are used to buy or sell foreign  currency for future delivery
at a fixed price.  The Fund uses them to "lock in" the U.S.  dollar price of a
security  denominated in a foreign  currency that the Fund has bought or sold,
or to protect  against  possible losses from changes in the relative values of
the U.S.  dollar  and a foreign  currency.  The Fund  limits its  exposure  in
foreign currency  exchange  contracts in a particular  foreign currency to the
amount of its assets  denominated  in that  currency  or a  closely-correlated
currency.  The  Fund  may  also use  "cross-hedging"  where  the  Fund  hedges
against  changes in currencies  other than the currency in which a security it
holds is denominated.

      Under a forward  contract,  one party  agrees to  purchase,  and another
party agrees to sell, a specific  currency at a future date.  That date may be
any  fixed  number of days from the date of the  contract  agreed  upon by the
parties.  The  transaction  price is set at the time the  contract  is entered
into. These contracts are traded in the inter-bank  market conducted  directly
among currency traders (usually large commercial banks) and their customers.

      The Fund may use forward  contracts to protect  against  uncertainty  in
the level of future  exchange  rates.  The use of forward  contracts  does not
eliminate the risk of fluctuations in the prices of the underlying  securities
the Fund owns or intends to  acquire,  but it does fix a rate of  exchange  in
advance.  Although  forward  contracts  may  reduce  the  risk of loss  from a
decline in the value of the hedged  currency,  at the same time they limit any
potential gain if the value of the hedged currency increases.

      When the Fund  enters  into a  contract  for the  purchase  or sale of a
security denominated in a foreign currency,  or when it anticipates  receiving
dividend  payments in a foreign  currency,  the Fund might desire to "lock-in"
the U.S.  dollar price of the security or the U.S.  dollar  equivalent  of the
dividend  payments.  To do so,  the Fund could  enter into a forward  contract
for the  purchase  or sale of the amount of foreign  currency  involved in the
underlying  transaction,  in a fixed  amount of U.S.  dollars  per unit of the
foreign currency.  This is called a "transaction hedge." The transaction hedge
will  protect the Fund  against a loss from an adverse  change in the currency
exchange  rates  during the period  between the date on which the  security is
purchased or sold or on which the payment is  declared,  and the date on which
the payments are made or received.

      The Fund could also use  forward  contracts  to lock in the U.S.  dollar
value of  portfolio  positions.  This is called a "position  hedge."  When the
Fund  believes  that  foreign  currency  might  suffer a  substantial  decline
against the U.S.  dollar,  it could  enter into a forward  contract to sell an
amount of that foreign currency  approximating the value of some or all of the
Fund's portfolio  securities  denominated in that foreign  currency.  When the
Fund believes that the U.S. dollar might suffer a substantial  decline against
a  foreign  currency,  it could  enter  into a  forward  contract  to buy that
foreign  currency for a fixed  dollar  amount.  Alternatively,  the Fund could
enter into a forward  contract  to sell a  different  foreign  currency  for a
fixed U.S.  dollar amount if the Fund  believes that the U.S.  dollar value of
the foreign  currency to be sold  pursuant to its forward  contract  will fall
whenever there is a decline in the U.S.  dollar value of the currency in which
portfolio  securities  of the Fund are  denominated.  That is referred to as a
"cross hedge."

      The Fund will cover its short  positions  in these cases by  identifying
liquid  assets on its books  having a value equal to the  aggregate  amount of
the Fund's  commitment under forward  contracts.  The Fund will not enter into
forward  contracts  or  maintain  a net  exposure  to  such  contracts  if the
consummation  of the contracts would obligate the Fund to deliver an amount of
foreign currency in excess of the value of the Fund's portfolio  securities or
other assets  denominated  in that  currency or another  currency  that is the
subject of the hedge.

      However,  to avoid excess  transactions and transaction  costs, the Fund
may  maintain a net  exposure to forward  contracts  in excess of the value of
the  Fund's  portfolio  securities  or other  assets  denominated  in  foreign
currencies if the excess amount is "covered" by liquid securities  denominated
in any  currency.  The cover must be at least equal at all times to the amount
of that  excess.  As one  alternative,  the Fund may  purchase  a call  option
permitting  the Fund to purchase the amount of foreign  currency  being hedged
by a forward  sale  contract at a price no higher  than the  forward  contract
price. As another  alternative,  the Fund may purchase a put option permitting
the Fund to sell the amount of foreign  currency subject to a forward purchase
contract at a price as high or higher than the forward contact price.

      The precise  matching of the amounts  under  forward  contracts  and the
value of the securities  involved  generally will not be possible  because the
future value of securities  denominated in foreign currencies will change as a
consequence  of market  movements  between  the date the  forward  contract is
entered into and the date it is sold.  In some cases the Manager  might decide
to sell the  security  and deliver  foreign  currency  to settle the  original
purchase  obligation.  If the market  value of the  security  is less than the
amount of foreign  currency the Fund is  obligated to deliver,  the Fund might
have to purchase  additional  foreign  currency on the "spot"  (that is, cash)
market to settle  the  security  trade.  If the market  value of the  security
instead  exceeds  the  amount of foreign  currency  the Fund is  obligated  to
deliver to settle the  trade,  the Fund might have to sell on the spot  market
some of the foreign  currency  received upon the sale of the  security.  There
will be additional transaction costs on the spot market in those cases.

      The  projection of  short-term  currency  market  movements is extremely
difficult,  and the successful  execution of a short-term  hedging strategy is
highly  uncertain.   Forward  contracts  involve  the  risk  that  anticipated
currency  movements  will not be  accurately  predicted,  causing  the Fund to
sustain losses on these  contracts and to pay additional  transactions  costs.
The  use  of  forward  contracts  in  this  manner  might  reduce  the  Fund's
performance  if there  are  unanticipated  changes  in  currency  prices  to a
greater degree than if the Fund had not entered into such contracts.

      At or before the maturity of a forward  contract  requiring  the Fund to
sell a  currency,  the Fund might sell a portfolio  security  and use the sale
proceeds to make delivery of the currency.  In the  alternative the Fund might
retain the  security  and offset its  contractual  obligation  to deliver  the
currency by  purchasing a second  contract.  Under that contract the Fund will
obtain,  on the same maturity date, the same amount of the currency that it is
obligated to deliver.  Similarly,  the Fund might close out a forward contract
requiring  it to  purchase a  specified  currency  by  entering  into a second
contract  entitling  it to sell the same  amount of the same  currency  on the
maturity  date of the first  contract.  The Fund would  realize a gain or loss
as a result of entering into such an offsetting  forward contract under either
circumstance.  The  gain or loss  will  depend  on the  extent  to  which  the
exchange  rate or rates  between the  currencies  involved  moved  between the
execution dates of the first contract and offsetting contract.

      The costs to the Fund of  engaging  in  forward  contracts  varies  with
factors such as the  currencies  involved,  the length of the contract  period
and the market  conditions  then  prevailing.  Because  forward  contracts are
usually  entered into on a principal  basis,  no brokerage fees or commissions
are  involved.  Because  these  contracts  are not traded on an exchange,  the
Fund must evaluate the credit and performance risk of the  counterparty  under
each forward contract.

      Although the Fund values its assets daily in terms of U.S.  dollars,  it
does not intend to  convert  its  holdings  of  foreign  currencies  into U.S.
dollars on a daily basis.  The Fund may convert foreign  currency from time to
time,  and will  incur  costs in doing so.  Foreign  exchange  dealers  do not
charge a fee for  conversion,  but they do seek to  realize a profit  based on
the  difference  between  the  prices  at  which  they  buy and  sell  various
currencies.  Thus,  a dealer  might  offer to sell a foreign  currency  to the
Fund at one  rate,  while  offering  a  lesser  rate of  exchange  if the Fund
desires to resell that currency to the dealer.

      |_| Regulatory  Aspects of Hedging  Instruments.  When using futures and
options on futures,  the Fund is required to operate within certain guidelines
and  restrictions  with  respect to the use of futures as  established  by the
Commodities Futures Trading Commission (the "CFTC").  In particular,  the Fund
is exempted from  registration with the CFTC as a "commodity pool operator" if
the Fund complies with the  requirements  of Rule 4.5 adopted by the CFTC. The
Rule does not limit the  percentage  of the Fund's assets that may be used for
futures  margin  and  related  options   premiums  for  a  bona  fide  hedging
position.  However,  under the Rule, the Fund must limit its aggregate initial
futures margin and related options  premiums to not more than 5% of the Fund's
net assets for hedging  strategies  that are not considered  bona fide hedging
strategies  under  the  Rule.  Under  the  Rule,  the Fund must also use short
futures and options on futures  solely for bona fide hedging  purposes  within
the meaning and intent of the applicable  provisions of the Commodity Exchange
Act.

      Transactions   in  options  by  the  Fund  are  subject  to  limitations
established by the option  exchanges.  The exchanges  limit the maximum number
of  options  that  may be  written  or held by a single  investor  or group of
investors  acting in concert.  Those  limits apply  regardless  of whether the
options were  written or  purchased on the same or different  exchanges or are
held in one or more  accounts or through one or more  different  exchanges  or
through one or more  brokers.  Thus,  the number of options  that the Fund may
write or hold may be  affected by options  written or held by other  entities,
including other  investment  companies having the same advisor as the Fund (or
an advisor that is an affiliate of the Fund's  advisor).  The  exchanges  also
impose  position  limits on futures  transactions.  An exchange  may order the
liquidation  of  positions  found to be in  violation  of those limits and may
impose certain other sanctions.

      Under  interpretations  of staff members of the Securities and Brokerage
Commission  regarding  applicable  provisions of the  Investment  Company Act,
when  the  Fund  purchases  a  future,  it  must  segregate  cash  or  readily
marketable  short-term  debt  instruments  in an amount  equal to the purchase
price of the future, less the margin deposit applicable to it.

      |_|  Tax  Aspects  of  Certain  Hedging  Instruments.   Certain  foreign
currency  exchange  contracts  in which the Fund may  invest  are  treated  as
"Section 1256 contracts"  under the Internal  Revenue Code. In general,  gains
or  losses  relating  to  Section  1256  contracts  are  characterized  as 60%
long-term  and  40%  short-term  capital  gains  or  losses  under  the  Code.
However,  foreign currency gains or losses arising from Section 1256 contracts
that are forward  contracts  generally are treated as ordinary income or loss.
In  addition,  Section  1256  contracts  held  by the  Fund at the end of each
taxable  year are  "marked-to-market,"  and  unrealized  gains or  losses  are
treated  as  though  they  were   realized.   These   contracts  also  may  be
marked-to-market  for purposes of  determining  the excise tax  applicable  to
investment   company   distributions   and  for  other  purposes  under  rules
prescribed  pursuant to the Internal  Revenue Code. An election can be made by
the Fund to exempt those transactions from this marked-to-market treatment.

      Certain   forward   contracts   the  Fund  enters  into  may  result  in
"straddles"  for federal  income tax purposes.  The straddle  rules may affect
the  character  and  timing of gains  (or  losses)  recognized  by the Fund on
straddle  positions.  Generally,  a loss  sustained  on the  disposition  of a
position  making up a  straddle  is allowed  only to the extent  that the loss
exceeds  any  unrecognized  gain in the  offsetting  positions  making  up the
straddle.  Disallowed  loss is  generally  allowed at the point where there is
no unrecognized  gain in the offsetting  positions making up the straddle,  or
the offsetting position is disposed of.

      Under the  Internal  Revenue  Code,  the  following  gains or losses are
treated as ordinary income or loss:
(1)   gains or losses  attributable  to  fluctuations  in exchange  rates that
         occur   between  the  time  the  Fund   accrues   interest  or  other
         receivables or accrues expenses or other  liabilities  denominated in
         a  foreign  currency  and the time the Fund  actually  collects  such
         receivables or pays such liabilities, and
(2)   gains or losses  attributable  to fluctuations in the value of a foreign
         currency   between  the  date  of  acquisition  of  a  debt  security
         denominated  in  a  foreign  currency  or  foreign  currency  forward
         contracts and the date of disposition.

      Currency  gains and losses are offset against market gains and losses on
each  trade  before  determining  a net  "Section  988" gain or loss under the
Internal  Revenue  Code for that trade,  which may  increase  or decrease  the
amount of the Fund's  investment  income  available  for  distribution  to its
shareholders.

      |X|  Temporary  Defensive   Investments.   When  market  conditions  are
unstable,  or the  Manager  believes  it is  otherwise  appropriate  to reduce
holdings in stocks,  the Fund can invest in a variety of debt  securities  for
defensive purposes.  The Fund can also purchase these securities for liquidity
purposes to meet cash needs due to the  redemption of Fund shares,  or to hold
while  waiting to  reinvest  cash  received  from the sale of other  portfolio
securities. The Fund can buy:

      |_|   high-quality,   short-term  money  market  instruments,  including
         those issued by the U. S. Treasury or other government agencies,
|_|   commercial paper  (short-term,  unsecured,  promissory notes of domestic
         or foreign companies),
|_|   short-term debt obligations of corporate issuers,
      |_|   certificates  of deposit and bankers'  acceptances of domestic and
         foreign banks and savings and loan associations, and
      |_|   repurchase agreements.

      Short-term debt  securities  would normally be selected for defensive or
cash  management  purposes  because  they can normally be disposed of quickly,
are not generally  subject to significant  fluctuations in principal value and
their value will be less subject to interest rate risk than  longer-term  debt
securities.

- ------------------------------------------------------------------------------
            Investment Restrictions

      |X| What Are  "Fundamental  Policies?"  Fundamental  policies  are those
policies  that the Fund has  adopted  to govern  its  investments  that can be
changed  only by the vote of a  "majority"  of the Fund's  outstanding  voting
securities.  Under the  Investment  Company Act, a "majority"  vote is defined
as the vote of the holders of the lesser of:

      |_|         67% or more of the shares  present or  represented  by proxy
         at a  shareholder  meeting,  if the  holders  of more than 50% of the
         outstanding shares are present or represented by proxy, or
      |_|         more than 50% of the outstanding shares.

      The Fund's investment  objective is a fundamental policy. Other policies
described in the  Prospectus or this Statement of Additional  Information  are
"fundamental"  only if they  are  identified  as  such.  The  Fund's  Board of
Trustees can change  non-fundamental  policies without  shareholder  approval.
However,  significant  changes to  investment  policies  will be  described in
supplements  or updates to the  Prospectus  or this  Statement  of  Additional
Information,  as appropriate.  The Fund's most significant investment policies
are described in the Prospectus.

      |X| What are the Fund's Additional  Fundamental Policies?  The following
investment restrictions are fundamental policies of the Fund.

      |_|   The Fund cannot buy  securities  issued or  guaranteed  by any one
         issuer if more  than 5% of its  total  assets  would be  invested  in
         securities  of that  issuer or if it would  then own more than 10% of
         that issuer's voting securities.  That restriction  applies to 75% of
         the  Fund's  total  assets.  The limit  does not apply to  securities
         issued  by  the  U.S.   government   or  any  of  its   agencies   or
         instrumentalities.
      |_|   The  Fund  cannot  invest  in  physical  commodities  or  physical
         commodity  contracts.  However,  the Fund  can buy and  sell  hedging
         instruments  to the  extent  specified  in its  Prospectus  and  this
         Statement of Additional  Information  from time to time. The Fund can
         also buy and sell options,  futures,  securities or other instruments
         backed by, or the investment  return from which, is linked to changes
         in the price of, physical commodities.
      |_|   The Fund  cannot lend  money.  However,  it can invest in all or a
         portion of an issue of bonds,  debentures,  commercial paper or other
         similar corporate  obligations.  The Fund may also lend its portfolio
         securities  subject to the restrictions  stated in the Prospectus and
         this  Statement  of  Additional   Information   and  can  enter  into
         repurchase transactions.
      |_|   The Fund  cannot  concentrate  investments.  That  means it cannot
         invest  25% or more  of its  total  assets  in  companies  in any one
         industry.
      |_|   The  Fund  cannot  underwrite  securities  of other  companies.  A
         permitted  exception  is in case it is  deemed  to be an  underwriter
         under the Securities  Act of 1933 when reselling any securities  held
         in its own portfolio.
|_|   The Fund cannot  invest in real estate or in  interests  in real estate.
         However,  the  Fund can  purchase  readily-marketable  securities  of
         companies holding real estate or interests in real estate.
|_|   The Fund cannot issue "senior  securities."  However,  that  restriction
         does not  prohibit  the Fund  from  borrowing  money  subject  to the
         provisions set forth in this Statement of Additional Information,  or
         from  entering  into  margin,   collateral  or  escrow   arrangements
         permitted by its other investment policies.

      |X| Non-Fundamental  Investment  Restrictions.  The Fund has a number of
other investment  restrictions that are not fundamental policies,  which means
that  they  can be  changed  by vote of a  majority  of the  Fund's  Board  of
Trustees without shareholder approval.

|_|   The Fund  cannot  invest  in  companies  for the  purpose  of  acquiring
         control or management of them.
|_|   The Fund cannot  invest in or hold  securities of any issuer if officers
         and Trustees or directors of the Fund or the Manager  individually or
         beneficially  own more than1/2of 1% of the  securities of that issuer
         and together own more than 5% of the securities of that issuer.
|_|   The Fund cannot  purchase  securities on margin.  However,  the Fund can
         make  margin   deposits  in  connection   with  any  of  the  hedging
         instruments permitted by any of its other investment policies.
|_|   The Fund  cannot  pledge,  mortgage  or  hypothecate  any of its assets.
         However, this does not prohibit the escrow arrangements  contemplated
         by  writing  covered  call  options  or other  collateral  or  margin
         arrangements  in  connection  with  any  of the  hedging  instruments
         permitted by any of its other investment policies.

      Unless  the  Prospectus  or this  Statement  of  Additional  Information
states that a percentage  restriction  applies on an ongoing basis, it applies
only  at the  time  the  Fund  makes  an  investment  (except  in the  case of
borrowing  and  investments  in  illquid  securities).  The Fund need not sell
securities  to meet the  percentage  limits  if the  value  of the  investment
increases in proportion to the size of the Fund.

      For purposes of the Fund's policy not to concentrate  its investments as
described above, the Fund has adopted the industry  classifications  set forth
in  Appendix A to this  Statement  of  Additional  Information.  That is not a
fundamental policy.

                           How the Fund is Managed

Organization  and  History.  The Fund is an open-end,  diversified  management
investment   company  with  an  unlimited  number  of  authorized   shares  of
beneficial interest.  The Fund was organized as a Massachusetts business trust
in June 1997.

Classes of Shares. The Trustees are authorized,  without shareholder approval,
to create new  series and  classes of  shares.  The  Trustees  may  reclassify
unissued shares of the Fund into additional  series or classes of shares.  The
Trustees  also may divide or  combine  the shares of a class into a greater or
lesser  number  of  shares  without  changing  the  proportionate   beneficial
interest of a shareholder in the Fund.  Shares do not have  cumulative  voting
rights or preemptive  or  subscription  rights.  Shares may be voted in person
or by proxy at shareholder meetings.

      The Fund currently has five classes of shares: Class A, Class B, Class
C, Class N and Class Y. All classes invest in the same investment portfolio.
Only retirement plans may purchase Class N shares. Only certain institutional
investors may elect to purchase Class Y shares.   Each class of shares:
o     has its own dividends and distributions,
o     pays certain expenses which may be different for the different classes,
o     may have a different net asset value,
o     may have separate voting rights on matters in which interests of one
      class are different from interests of another class, and
o     votes as a class on matters that affect that class alone.

      Shares are freely transferable, and each share of each class has one
vote at shareholder meetings, with fractional shares voting proportionally on
matters submitted to the vote of shareholders.  Each share of the Fund
represents an interest in the Fund proportionately equal to the interest of
each other share of the same class.

Meetings of Shareholders.  As a Massachusetts  business trust, the Fund is not
required  to hold,  and does not plan to  hold,  regular  annual  meetings  of
shareholders.  The Fund  will  hold  meetings  when  required  to do so by the
Investment  Company  Act or other  applicable  law.  It will also do so when a
shareholder  meeting is called by the  Trustees or upon proper  request of the
shareholders.

      Shareholders have the right, upon the declaration in writing or vote of
two-thirds of the outstanding shares of the Fund, to remove a Trustee.  The
Trustees will call a meeting of shareholders to vote on the removal of a
Trustee upon the written request of the record holders of 10% of its
outstanding shares.  If the Trustees receive a request from at least 10
shareholders stating that they wish to communicate with other shareholders to
request a meeting to remove a Trustee, the Trustees will then either make the
Fund's shareholder list available to the applicants or mail their
communication to all other shareholders at the applicants' expense. The
shareholders making the request must have been shareholders for at least six
months and must hold shares of the Fund valued at $25,000 or more or
constituting at least 1% of the Fund's outstanding shares. The Trustees may
also take other action as permitted by the Investment Company Act.

Shareholder and Trustee  Liability.  The Fund's  Declaration of Trust contains
an express  disclaimer  of  shareholder  or Trustee  liability  for the Fund's
obligations.  It  also  provides  for  indemnification  and  reimbursement  of
expenses  out of the  Fund's  property  for any  shareholder  held  personally
liable for its  obligations.  The  Declaration  of Trust also states that upon
request,  the Fund  shall  assume  the  defense  of any claim  made  against a
shareholder  for any act or  obligation  of the Fund  and  shall  satisfy  any
judgment  on  that  claim.  Massachusetts  law  permits  a  shareholder  of  a
business trust (such as the Fund) to be held personally  liable as a "partner"
under certain  circumstances.  However,  the risk that a Fund shareholder will
incur  financial  loss from being held  liable as a  "partner"  of the Fund is
limited  to the  relatively  remote  circumstances  in which the Fund would be
unable to meet its obligations.

      The Fund's contractual arrangements state that any person doing
business with the Fund (and each shareholder of the Fund) agrees under its
Declaration of Trust to look solely to the assets of the Fund for
satisfaction of any claim or demand that may arise out of any dealings with
the Fund. Additionally, the Trustees shall have no personal liability to any
such person, to the extent permitted by law.

Board of Trustees and Oversight Committees. The Fund is governed by a Board
of Trustees, which is responsible for protecting the interests of
shareholders under Massachusetts law. The Trustees meet periodically
throughout the year to oversee the Fund's activities, review its performance,
and review the actions of the Manager.  Although the Fund will not normally
hold annual meetings of its shareholders, it may hold shareholder meetings
from time to time on important matters, and shareholders have the right to
call a meeting to remove a Trustee or to take other action described in the
Fund's Declaration of Trust.

      The Board of Trustees has an Audit Committee which is comprised solely
of Independent Trustees. The Audit Committee provides the Board with
recommendations regarding the selection of the Fund's independent auditor.
The Audit Committee also reviews the scope and results of audits and the
audit fees charged, reviews reports from the Fund's independent auditors
concerning the Fund's internal accounting procedures and controls, and
reviews reports of the Manager's internal auditor. The members of the Audit
Committee are Paul Clinton (Chairman), Thomas Courtney, Robert Galli, Lacy
Herrmann and Brian Wruble. The Audit Committee met two times during the
Fund's fiscal year ended October 31, 2002.

Trustees and Officers of the Fund. Each of the Trustees is an "Independent
Trustee," as defined in the Investment Company Act. The Fund's Trustees and
officers and their positions held with the Fund and length of service in such
position(s) and their principal occupations and business affiliations during
the past five years are listed in the chart below. The information for the
Trustees also includes the dollar range of shares of the Fund as well as the
aggregate dollar range of shares beneficially owned in any of the Oppenheimer
funds overseen by the Trustees. All of the Trustees are also trustees or
directors of the following Oppenheimer funds (referred to as "Board III
Funds"):

Oppenheimer Quest For Value Funds, a
series fund having the following three
series:
  Oppenheimer Small Cap Value Fund,       Oppenheimer  Quest Global Value Fund,
                                          Inc.
  Oppenheimer Quest Balanced Value Fund   Oppenheimer   Quest   Capital   Value
  and                                     Fund, Inc.
  Oppenheimer Quest Opportunity Value     Oppenheimer Quest Value Fund, Inc.
  Fund
Rochester Portfolio Series, a series      Bond Fund Series, a series fund
fund having one series: Limited-Term New  having one series: Oppenheimer
York Municipal Fund                       Convertible Securities Fund
Rochester Fund Municipals                 Oppenheimer MidCap Fund

      In addition  to being a trustee or director of the Board III Funds,  Mr.
Galli  is  also  a  director  or  trustee  of  31  other   portfolios  in  the
OppenheimerFunds complex. Present or former officers,  directors, trustees and
employees (and their  immediate  family  members) of the Fund, the Manager and
its affiliates,  and retirement plans  established by them for their employees
are  permitted  to  purchase  Class  A  shares  of  the  Fund  and  the  other
Oppenheimer  funds at net asset value without sales charge.  The sales charges
on Class A shares is waived for that group  because of the  economies of sales
efforts realized by the Distributor.

      Messrs. Murphy, Masterson, Molleur, Vottiero, Wixted, Zack, and
Bartlett, and Mses. Bechtolt, Feld and Ives who are officers of the Fund,
respectively hold the same offices of one or more of the other Board III
Funds as with the Fund. As of November 27, 2002, the Trustees and officers of
the Fund, as a group, owned of record or beneficially less than 1% of each
class of shares of the Fund. The foregoing statement does not reflect
ownership of shares of the Fund held of record by an employee benefit plan
for employees of the Manager, other than the shares beneficially owned under
the plan by the officers of the Fund listed above. In addition, each
Independent Trustee, and his or her family members, do not own securities of
either the Manager or Distributor of the Board III Funds or any person
directly or indirectly controlling, controlled by or under common control
with the Manager or Distributor.

      The address of each Trustee in the chart below is 6803 S. Tucson Way,
Centennial, CO 80112-3924. Each Trustee serves for an indefinite term, until
his or her resignation, retirement, death or removal.

- -------------------------------------------------------------------------------------
                                Independent Trustees
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name,              Principal Occupation(s) During Past 5      Dollar     Aggregate
                                                                         Dollar
                                                                         Range Of
                                                                         Shares
                                                                         Beneficially
                                                                         Owned in
                   Years;                                     Range of   Any of the
Position(s) Held   Other Trusteeships/Directorships Held by   Shares     Oppenheimer
with Fund,         Trustee;                                   BeneficiallFunds
Length of Service, Number of Portfolios in Fund Complex       Owned in   Overseen
Age                Currently Overseen by Trustee              the Fund   by Trustee
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
                                                                As of December 31,
                                                                       2001
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Thomas W.          Principal  of  Courtney  Associates,  Inc. $0         $10,001-$50,000
Courtney,          (venture  capital  firm);  former  General
Chairman of the    Partner of Trivest  Venture Fund  (private
Board of Trustees, venture  capital fund);  former  President
Trustee since 1997 of   Investment    Counseling    Federated
Age: 69            Investors,  Inc.;  Trustee of Cash  Assets
                   Trust,  a money market  fund;  Director of
                   OCC Cash  Reserves,  Inc.  and  Trustee of
                   OCC Accumulation  Trust, both of which are
                   open-end investment companies;  Trustee of
                   four  funds for  Pacific  Capital  and Tax
                   Free  Trust  of   Arizona.   Oversees   10
                   portfolios    in   the    OppenheimerFunds
                   complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Paul Y. Clinton,   Principal     of    Clinton     Management $0         Over
Trustee, since     Associates,   a   financial   and  venture            $100,000
1997 Age: 70.      capital   consulting   firm;   Trustee  of
                   Capital   Cash    Management    Trust,   a
                   money-market    fund   and    Narragansett
                   Tax-Free  Fund,  a  tax-exempt  bond fund;
                   Director of OCC Cash  Reserves,  Inc.  and
                   Trustee of OCC  Accumulation  Trust,  both
                   of   which   are    open-end    investment
                   companies.  Formerly:  Director,  External
                   Affairs,  Kravco  Corporation,  a national
                   real estate owner and property  management
                   corporation;     President     of    Essex
                   Management   Corporation,   a   management
                   consulting  company;  a general partner of
                   Capital  Growth  Fund,  a venture  capital
                   partnership;  a general  partner  of Essex
                   Limited    Partnership,    an   investment
                   partnership;  President of Geneve Corp., a
                   venture   capital   fund;    Chairman   of
                   Woodland  Capital  Corp., a small business
                   investment company;  and Vice President of
                   W.R.  Grace & Co.  Oversees 10  portfolios
                   in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Robert G. Galli,   A   trustee   or    director    of   other $0         Over
Trustee since 1997 Oppenheimer funds.  Formerly Vice Chairman            $100,000
Age: 69            (October   1995-December   1997)   of  the
                   Manager.  Oversees  41  portfolios  in the
                   OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Lacy B. Herrmann,  Chairman  and Chief  Executive  Officer of $0         $10,001-$50,000
Trustee since 1997 Aquila   Management    Corporation,    the
Age: 73            sponsoring   organization   and   manager,
                   administrator  and/or  sub-Adviser  to the
                   following open-end  investment  companies,
                   and  Chairman of the Board of Trustees and
                   President   of   each:    Churchill   Cash
                   Reserves  Trust,   Aquila-Cascadia  Equity
                   Fund,  Pacific  Capital Cash Assets Trust,
                   Pacific   Capital  U.S.   Treasuries  Cash
                   Assets  Trust,  Pacific  Capital  Tax-Free
                   Cash  Assets   Trust,   Prime  Cash  Fund,
                   Narragansett   Insured   Tax-Free   Income
                   Fund,  Tax-Free  Fund For Utah,  Churchill
                   Tax-Free  Fund of Kentucky,  Tax-Free Fund
                   of  Colorado,  Tax-Free  Trust of  Oregon,
                   Tax-Free   Trust  of   Arizona,   Hawaiian
                   Tax-Free Trust,  and Aquila Rocky Mountain
                   Equity  Fund;  Vice  President,  Director,
                   Secretary,   and  formerly   Treasurer  of
                   Aquila Distributors,  Inc., distributor of
                   the above  funds;  President  and Chairman
                   of the Board of Trustees  of Capital  Cash
                   Management Trust ("CCMT"),  and an Officer
                   and  Trustee/Director of its predecessors;
                   President and Director of STCM  Management
                   Company,  Inc.,  sponsor  and  adviser  to
                   CCMT;  Chairman,  President and a Director
                   of InCap Management Corporation,  formerly
                   sub-adviser  and  administrator  of  Prime
                   Cash Fund and Short Term  Asset  Reserves;
                   Director of OCC Cash  Reserves,  Inc., and
                   Trustee of OCC  Accumulation  Trust,  both
                   of   which   are    open-end    investment
                   companies;   Trustee   Emeritus  of  Brown
                   University.  Oversees 10 portfolios in the
                   OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Brian Wruble,      Special  Limited  Partner  (since  January $1-$10,000 $50,001-$100,000
Trustee since 2001 1999) of Odyssey Investment Partners,  LLC
Age: 59            (private   equity   investment);   General
                   Partner (since  September 1996) of Odyssey
                   Partners,     L.P.    (hedge    fund    in
                   distribution   since  1/1/97);   Board  of
                   Governing  Trustees (since August 1990) of
                   The   Jackson   Laboratory   (non-profit);
                   Trustee  (since May 1992) of Institute for
                   Advanced  Study  (educational  institute);
                   Trustee   (since  May  2000)  of  Research
                   Foundation of AIMR  (investment  research,
                   non-profit);   formerly  Governor,  Jerome
                   Levy  Economics  Institute of Bard College
                   (economics        research)        (August
                   1990-September  2001);  Director  of Ray &
                   Berendtson,  Inc.  (executive search firm)
                   (May   2000-April   2002).   Oversees   10
                   portfolios    in   the    OppenheimerFunds
                   complex.
- -------------------------------------------------------------------------------------

      The address of the Officers in the chart below is as follows: for
Messrs. Bartlett, Molleur, Murphy and Zack and Ms. Feld, 498 Seventh Avenue,
New York, NY 10018, for Messrs. Masterson, Vottiero and Wixted and Mses.
Bechtolt and Ives, 6803 S. Tucson Way, Centennial, CO 80112-3924. Each
Officer serves for an annual term or until his or her earlier resignation,
death or removal.

- -------------------------------------------------------------------------------------
                                Officers of the Fund
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Name,                   Principal Occupation(s) During Past 5 Years
Position(s) Held with
Fund,
Length of Service,
Age
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Bruce Bartlett, Vice    Senior Vice President (since January 1999) of the Manager;
President and           an officer of 6 portfolios in the OppenheimerFunds complex.
Portfolio Manager       Prior to joining the Manager in April, 1995, he was a Vice
since 1998              President and Senior Portfolio Manager at First of America
Age:  52                Investment Corp. (September 1986 - April 1995).
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
John V. Murphy,         Chairman,  Chief Executive  Officer and director (since June
President since 2001    2001) and President  (since  September 2000) of the Manager;
Age: 53                 President  and a director  or  trustee of other  Oppenheimer
                        funds;  President  and  a  director  (since  July  2001)  of
                        Oppenheimer  Acquisition Corp. (the Manager's parent holding
                        company) and of Oppenheimer  Partnership  Holdings,  Inc. (a
                        holding  company  subsidiary  of the  Manager);  a  director
                        (since November 2001) of OppenheimerFunds  Distributor, Inc.
                        (a  subsidiary  of the  Manager);  Chairman  and a  director
                        (since  July  2001) of  Shareholder  Services,  Inc.  and of
                        Shareholder   Financial   Services,   Inc.  (transfer  agent
                        subsidiaries  of  the  Manager);  President  and a  director
                        (since  July  2001) of  OppenheimerFunds  Legacy  Program (a
                        charitable  trust program  established  by the  Manager);  a
                        director  of the  investment  advisory  subsidiaries  of the
                        Manager:  OFI  Institutional  Asset  Management,   Inc.  and
                        Centennial  Asset  Management  Corporation  (since  November
                        2001),  HarbourView  Asset  Management  Corporation  and OFI
                        Private  Investments,  Inc.  (since  July  2001);  President
                        (since  November  1, 2001) and a director  (since July 2001)
                        of  Oppenheimer  Real  Asset  Management,  Inc.;  a director
                        (since  November  2001)  of  Trinity  Investment  Management
                        Corp.  and  Tremont  Advisers,   Inc.  (Investment  advisory
                        affiliates of the Manager);  Executive Vice President (since
                        February  1997)  of  Massachusetts   Mutual  Life  Insurance
                        Company (the Manager's  parent  company);  a director (since
                        June  1995)  of  DLB  Acquisition   Corporation  (a  holding
                        company  that owns the shares of David L.  Babson & Company,
                        Inc.);   formerly,   Chief  Operating   Officer   (September
                        2000-June  2001)  of  the  Manager;  President  and  trustee
                        (November  1999-November 2001) of MML Series Investment Fund
                        and  MassMutual  Institutional  Funds  (open-end  investment
                        companies);  a director (September 1999-August 2000) of C.M.
                        Life Insurance Company;  President,  Chief Executive Officer
                        and director  (September  1999-August 2000) of MML Bay State
                        Life Insurance  Company; a director (June 1989-June 1998) of
                        Emerald   Isle   Bancorp  and   Hibernia   Savings  Bank  (a
                        wholly-owned  subsidiary of Emerald Isle Bancorp).  Oversees
                        69 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Brian W. Wixted,        Senior Vice  President and  Treasurer  (since March 1999) of
Treasurer, Principal    the Manager;  Treasurer  (since  March 1999) of  HarbourView
Financial and           Asset Management  Corporation,  Shareholder Services,  Inc.,
Accounting Officer      Oppenheimer Real Asset Management  Corporation,  Shareholder
since 1999              Financial Services,  Inc., Oppenheimer Partnership Holdings,
Age: 43                 Inc.,  OFI Private  Investments,  Inc.  (since  March 2000),
                        OppenheimerFunds    International   Ltd.   and   Oppenheimer
                        Millennium Funds plc (since May 2000) and OFI  Institutional
                        Asset Management,  Inc. (since November 2000) (offshore fund
                        management  subsidiaries  of  the  Manager);  Treasurer  and
                        Chief  Financial  Officer  (since  May 2000) of  Oppenheimer
                        Trust Company (a trust  company  subsidiary of the Manager);
                        Assistant   Treasurer  (since  March  1999)  of  Oppenheimer
                        Acquisition  Corp.  and   OppenheimerFunds   Legacy  Program
                        (since April 2000);  formerly  Principal and Chief Operating
                        Officer    (March    1995-March    1999),    Bankers   Trust
                        Company-Mutual  Fund  Services  Division.  An  officer of 85
                        portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Philip Vottiero,        Vice  President/Fund  Accounting of the Manager (since March
Assistant Treasurer     2002;  formerly Vice  President/Corporate  Accounting of the
since 2002              Manager (July  1999-March  2002) prior to which he was Chief
Age: 39                 Financial  Officer at Sovlink  Corporation  (April 1996-June
                        1999).  An officer of 85 portfolios in the  OppenheimerFunds
                        complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Connie Bechtolt,        Assistant Vice President of the Manager  (since September
Assistant Treasurer     1998); formerly Manager/Fund Accounting (September
since 2002              1994-September 1998) of the Manager. An officer of 85
Age: 39                 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Robert G. Zack,         Senior Vice President  (since May 1985) and General  Counsel
Secretary since 2001    (since February 2002) of the Manager;  General Counsel and a
Age: 54                 director   (since   November   2001)   of   OppenheimerFunds
                        Distributor,   Inc.;   Senior  Vice  President  and  General
                        Counsel  (since   November   2001)  of   HarbourView   Asset
                        Management  Corporation;   Vice  President  and  a  director
                        (since November 2000) of Oppenheimer  Partnership  Holdings,
                        Inc.; Senior Vice President,  General Counsel and a director
                        (since  November  2001)  of  Shareholder   Services,   Inc.,
                        Shareholder   Financial   Services,    Inc.,   OFI   Private
                        Investments,   Inc.,   Oppenheimer  Trust  Company  and  OFI
                        Institutional   Asset  Management,   Inc.;  General  Counsel
                        (since  November  2001)  of  Centennial   Asset   Management
                        Corporation;   a   director   (since   November   2001)   of
                        Oppenheimer   Real   Asset   Management,   Inc.;   Assistant
                        Secretary   and  a  director   (since   November   2001)  of
                        OppenheimerFunds  International  Ltd.; Vice President (since
                        November   2001)   of   OppenheimerFunds   Legacy   Program;
                        Secretary  (since November 2001) of Oppenheimer  Acquisition
                        Corp.;    formerly   Acting   General   Counsel    (November
                        2001-February  2002)  and  Associate  General  Counsel  (May
                        1981-October  2001) of the Manager;  Assistant  Secretary of
                        Shareholder   Services,   Inc.  (May  1985-November   2001),
                        Shareholder     Financial    Services,     Inc.    (November
                        1989-November  2001);  OppenheimerFunds  International  Ltd.
                        and Oppenheimer  Millennium Funds plc (October 1997-November
                        2001).  An officer of 85 portfolios in the  OppenheimerFunds
                        complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Philip T. Masterson,    Vice President and Assistant Counsel of the Manager (since
Assistant Secretary     July 1998); formerly, an associate with Davis, Graham, &
since 2002              Stubbs LLP (January 1997-June 1998). An officer of 85
Age: 38                 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Denis R. Molleur,       Vice  President  and Senior  Counsel of the  Manager  (since
Assistant Secretary     July 1999);  formerly a Vice President and Associate Counsel
since 2001              of the Manager (September  1995-July 1999). An officer of 82
Age: 45                 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Katherine P. Feld,      Vice  President and Senior  Counsel (since July 1999) of the
Assistant Secretary     Manager;    Vice    President    (since    June   1990)   of
since 2001              OppenheimerFunds    Distributor,    Inc.;   Director,   Vice
Age: 44                 President  and  Assistant  Secretary  (since  June  1999) of
                        Centennial  Asset  Management  Corporation;  Vice  President
                        (since 1997) of  Oppenheimer  Real Asset  Management,  Inc.;
                        formerly  Vice  President  and  Associate   Counsel  of  the
                        Manager (June  1990-July  1999). An officer of 85 portfolios
                        in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
Kathleen T. Ives,       Vice  President and Assistant  Counsel  (since June 1998) of
Assistant Secretary     the    Manager;    Vice    President    (since    1999)   of
since 2001              OppenheimerFunds  Distributor,   Inc.;  Vice  President  and
Age: 37                 Assistant  Secretary  (since 1999) of Shareholder  Services,
                        Inc.;   Assistant   Secretary   (since   December  2001)  of
                        OppenheimerFunds  Legacy Program and  Shareholder  Financial
                        Services,   Inc.;  formerly  Assistant  Vice  President  and
                        Assistant  Counsel of the Manager (August  1997-June  1998);
                        Assistant Counsel of the Manager (August  1994-August 1997).
                        An officer of 85 portfolios in the OppenheimerFunds complex.
- -------------------------------------------------------------------------------------

      |X|   Remuneration of Trustees. The officers of the Fund who are
affiliated with the Manager receive no salary or fee from the Fund. The
Trustees of the Fund received the compensation shown below from the Fund with
respect to the Fund's fiscal year ended October 31, 2002. The compensation
from all of the Board III Funds (including the Fund) represents compensation
received as a director, trustee or member of a committee of the board of
those funds during the calendar year 2001.

- ------------------------------------------------------------------------------------
Trustee Name and        Aggregate     Retirement      Estimated         Total
                                                       Annual       Compensation
                                                     Retirement    From All Board
                                                      Benefits      III Funds For
                                       Benefits        Paid at    Which Individual
                                      Accrued as     Retirement       Serves As
                      Compensation   Part of Fund     from all    Trustee/Director
                        From Fund      Expenses       Board III     For Calendar
Other Fund             For Fiscal     For Fiscal        Funds        Year Ended
Position(s) (as        Year Ended     Year Ended    (10 funds)2       12/31/01
applicable)             10/31/021      10/31/02                      (10 Funds)2
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Paul Y. Clinton          $5,698         $4,408                         $97,126
Audit Committee                                        $63,738
Chairman
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Thomas W. Courtney
Chairman, Audit          $5,698         $5,795         $63,738         $97,126
Committee Member
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------

Robert G. Galli
Audit       Committee    $5,698         $8,343      $55,6782          $202,8863
Member
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------

Lacy B. Herrmann
Audit Committee          $5,698         $1,660         $63,702         $97,126
Member
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
Brian Wruble             $3,475         $1,390                         $59,250
Audit Committee                                        $7,606
Member4
- ------------------------------------------------------------------------------------
1.    Aggregate  compensation  includes fees, deferred  compensation,  if any,
   and retirement plan benefits accrued for a Trustee.
2. Estimated annual retirement benefits paid at retirement is based on a
   straight life payment plan election. The amount for Mr. Galli includes
   $30,689 for serving as a trustee or director of 33 Oppenheimer funds that
   are not Board III Funds.
3.    Includes  $105,760  for Mr.  Galli for serving as trustee or director of
   33 Oppenheimer funds that are not Board III Funds.
4.    Brian Wruble was elected to the board on April 1, 2001.

      |X|  Retirement  Plan for  Trustees.  The Fund has adopted a  retirement
plan that  provides for payments to retired  Trustees.  Payments are up to 80%
of the average  compensation  paid during a Trustee's five years of service in
which the highest  compensation was received.  A Trustee must serve as Trustee
for any of the  Board  III  Funds  listed  above  for at  least 15 years to be
eligible for the maximum  payment.  Each  Trustee's  retirement  benefits will
depend on the  amount  of the  Trustee's  future  compensation  and  length of
service.

      |X| Deferred  Compensation Plan for Trustees.  The Board of Trustees has
adopted a Deferred  Compensation Plan for disinterested  Trustees that enables
them to elect to defer  receipt of all or a portion  of the  annual  fees they
are  entitled  to  receive  from the Fund.  Under the plan,  the  compensation
deferred by a Trustee is periodically  adjusted as though an equivalent amount
had been invested in shares of one or more  Oppenheimer  funds selected by the
Trustee.  The amount  paid to the  Trustee  under the plan will be  determined
based upon the performance of the selected funds.

Deferral of Trustees' fees under the plan will not materially affect the Fund's
assets, liabilities and net income per share.  The plan will not obligate the
Fund to retain the services of any Trustee or to pay any particular level of
compensation to any Trustee.  Pursuant to an Order issued by the Securities
and Exchange Commission, the Fund may invest in the funds selected by the
Trustee under the plan without shareholder approval for the limited purpose
of determining the value of the Trustee's deferred fee account.

      |X| Major  Shareholders.  As of November 27,  2002,  the only people who
owned of  record or was  known by the Fund to own  beneficially  5% or more of
any class of the Fund's  outstanding  shares, and their holdings of that class
as of that date, were the following:

      Charles  Schwab & Co.,  Inc.,  for the  exclusive  benefit of customers,
Attn.: Mutual Funds, 101 Montgomery St., San Francisco,  CA 94104-4122,  which
owned 2,096,251.398  Class A shares,  representing 6.82% of the Class A shares
then outstanding;

      Anthony Di Maria,  Attn.:  Joseph  Lomangino,  TJH  Medical  Services PC
401K,  8906  135th  St.,  Suite  7E,  Jamaica,  NY  11418-2834,   which  owned
69,329.044  Class N  shares,  representing  8.23% of the  Class N shares  then
outstanding;

      MLPF&S for the sole benefit of its customers,  Attn.: Fund Admin.,  4800
Deer  Lake  Dr.  East  Floor  3,  Jacksonville,  FL  32246-6484,  which  owned
56,773.773  Class N  shares,  representing  6.74% of the  Class N shares  then
outstanding;

      Massachusetts   Mutual   Life   Insurance   Company,   1295  State  St.,
Springfield,   MA  01111-0001,   which  owned   210,622.458  Class  Y  shares,
representing 33.20% of the Class Y shares then outstanding;

      IBT & Co. Cust.,  OppenheimerFunds  Cap-Accum.  Plan, Attn.: MML037, 200
Clarendon St. Floor 16, Boston,  MA 02116-5021,  which owned 124,251.527 Class
Y shares, representing 19.58% of the Class Y shares then outstanding;

      Mass Mutual Life Insurance Co., Attn.:  N225 Separate  Investment Acct.,
1295 State St.,  Springfield,  MA 01111-0001,  which owned 298,863.300 Class Y
shares, representing 47.11% of the Class Y shares then outstanding.

The Manager.  The Manager is wholly-owned by Oppenheimer  Acquisition Corp., a
holding company controlled by Massachusetts Mutual Life Insurance Company.

      |X| Code of Ethics.  The Fund,  the Manager and the  Distributor  have a
Code of  Ethics.  It is  designed  to detect  and  prevent  improper  personal
trading  by  certain  employees,  including  portfolio  managers,  that  would
compete with or take advantage of the Fund's portfolio  transactions.  Covered
persons  include  persons with  knowledge of the  investments  and  investment
intentions  of the Fund and other funds  advised by the  Manager.  The Code of
Ethics  does  permit  personnel  subject to the Code to invest in  securities,
including  securities that may be purchased or held by the Fund,  subject to a
number of  restrictions  and controls.  Compliance  with the Code of Ethics is
carefully monitored and enforced by the Manager.

      The Code of Ethics is an exhibit to the  Fund's  registration  statement
filed with the  Securities  and  Exchange  Commission  and can be reviewed and
copied at the SEC's Public  Reference Room in Washington,  D.C. You can obtain
information  about the hours of  operation  of the  Public  Reference  Room by
calling  the SEC at  1.202.942.8090.  The Code of Ethics can also be viewed as
part of the Fund's  registration  statement on the SEC's EDGAR database at the
SEC's Internet website at  http://www.sec.gov.  Copies may be obtained,  after
paying a  duplicating  fee,  by  electronic  request at the  following  e-mail
address:  publicinfo@sec.gov.,  or by  writing to the SEC's  Public  Reference
Section, Washington, D.C. 20549-0102.

      |X|  The   Investment   Advisory   Agreement.   The   Manager   provides
investment  advisory and  management  services to the Fund under an investment
advisory  agreement  between  the Manager  and the Fund.  The Manager  selects
securities for the Fund's portfolio and handles its day-to-day  business.  The
portfolio  manager of the Fund is  employed  by the  Manager and is the person
who is principally  responsible  for the  day-to-day  management of the Fund's
portfolio.  Other members of the Manager's  Equity  Portfolio Team provide the
portfolio manager with counsel and support in managing the Fund's portfolio.

      The investment  advisory agreement requires the Manager, at its expense,
to provide the Fund with adequate office space,  facilities and equipment.  It
also  requires  the Manager to provide and  supervise  the  activities  of all
administrative   and  clerical   personnel   required  to  provide   effective
administration  for the Fund. Those  responsibilities  include the compilation
and  maintenance of records with respect to its  operations,  the  preparation
and filing of  specified  reports,  and  composition  of proxy  materials  and
registration statements for continuous public sale of shares of the Fund.

The Fund pays expenses not expressly assumed by the Manager under the advisory
agreement. The advisory agreement lists examples of expenses paid by the
Fund. The major categories relate to interest, taxes, brokerage commissions,
fees to Independent Trustees, legal and audit expenses, custodian and
transfer agent expenses, share issuance costs, certain printing and
registration costs and non-recurring expenses, including litigation costs.
The management fees paid by the Fund to the Manager are calculated at the
rates described in the Prospectus, which are applied to the assets of the
Fund as a whole.  The fees are allocated to each class of shares based upon
the relative proportion of the Fund's net assets represented by that class.
The management fees paid by the Fund to the Manager during its last three
fiscal years are listed below.

          -----------------------------------------------------
                                      Management Fees Paid to
           Fiscal Year Ended 10/31:   OppenheimerFunds, Inc.
          -----------------------------------------------------
          -----------------------------------------------------
                     2000                   $9,665,786
          -----------------------------------------------------
          -----------------------------------------------------
                     2001                   $9,759,526
          -----------------------------------------------------
          -----------------------------------------------------
                     2002                   $6,671,502
          -----------------------------------------------------

The investment advisory agreement states that in the absence of willful misfeasance,
bad faith, gross negligence in the performance of its duties or reckless
disregard of its obligations and duties under the investment advisory
agreement, the Manager is not liable for any loss the Fund sustains for any
investment, adoption of any investment policy, or the purchase, sale or
retention of any security.

The agreement permits the Manager to act as investment advisor for any other person,
firm or corporation and to use the name "Oppenheimer" in connection with
other investment companies for which it may act as investment advisor or
general distributor.  If the Manager shall no longer act as investment
advisor to the Fund, the Manager may withdraw the right of the Fund to use
the name "Oppenheimer" as part of its name.

|X|...Annual Approval of Investment Advisory Agreement. Each year, the Board
   of Trustees, including a majority of the Independent Trustees, is required
   to approve the renewal of the investment advisory agreement. The
   Investment Company Act requires that the Board request and evaluate and
   the Manager provide such information as may be reasonably necessary to
   evaluate the terms of the investment advisory agreement.  The Board
   employs an independent consultant to prepare a report that provides such
   information as the Board requests for this purpose.

      The Board also receives information about the 12b-1 distribution fees
the Fund pays.  These distribution fees are reviewed and approved at a
different time of the year.

      The Board reviewed the foregoing information in arriving at its
decision to renew the investment advisory agreement.  Among other factors,
the Board considered:
o     The nature, cost, and quality of the services provided to the Fund and
            its shareholders;
o     The profitability of the Fund to the Manager;
o     The investment performance of the Fund in comparison to regular market
            indices
o     Economies of scale that may be available to the Fund from the Manager;
o     Fees paid by other mutual funds for similar services;
o     The value and quality of any other benefits or services received by the
            Fund from its relationship with the Manager, and
o     The direct and indirect benefits the Manager received from its
            relationship with the Fund.  These included services provided by
            the Distributor and the Transfer Agent, and brokerage and soft
            dollar arrangements permissible under Section 28(e) of the
            Securities Exchange Act.

      The Board considered that the Manager must be able to pay and retain
high quality personnel at competitive rates to provide services to the Fund.
The Board also considered that maintaining the financial viability of the
Manager is important so that the Manager will be able to continue to provide
quality services to the Fund and its shareholders in adverse times.  The
Board also considered the investment performance of other mutual funds
advised by the Manager. The Board is aware that there are alternatives to the
use of the Manager.

      These matters were also considered by the Independent Trustees, meeting
separately from the full Board with experienced Counsel to the Fund who
assisted the Board in its deliberations.  The Fund's Counsel is independent
of the Manager within the meaning and intent of the SEC Rules regarding the
independence of counsel.

After careful deliberation, the Board of Trustees concluded that it was in the
best interest of shareholders to continue the investment advisory agreement
for another year. In arriving at a decision, the Board did not single out any
one factor or group of factors as being more important than other factors,
but considered all factors together.  The Board judged the terms and
conditions of the Agreement, including the investment advisory fee, in light
of all of the surrounding circumstances.

Brokerage Policies of the Fund

Brokerage  Provisions of the Investment Advisory Agreement.  One of the duties
of the  Manager  under the  investment  advisory  agreement  is to arrange the
portfolio   transactions  for  the  Fund.  The  advisory   agreement  contains
provisions  relating to the employment of  broker-dealers to effect the Fund's
portfolio  transactions.  The Manager is authorized by the advisory  agreement
to employ  broker-dealers,  including  "affiliated"  brokers,  as that term is
defined in the Investment  Company Act. The Manager may employ  broker-dealers
that the Manager  thinks in its best judgment  based on all relevant  factors,
will implement the policy of the Fund to obtain,  at reasonable  expense,  the
"best  execution"  of the  Fund's  portfolio  transactions.  "Best  execution"
means prompt and reliable  execution at the most favorable  price  obtainable.
The Manager  need not seek  competitive  commission  bidding.  However,  it is
expected to be aware of the current rates of eligible  brokers and to minimize
the commissions paid to the extent  consistent with the interests and policies
of the Fund as established by its Board of Trustees.

      Under the investment advisory agreement,  the Manager may select brokers
(other than  affiliates) that provide  brokerage and/or research  services for
the Fund and/or the other  accounts  over which the Manager or its  affiliates
have  investment  discretion.  The  commissions  paid to such  brokers  may be
higher than another  qualified  broker would  charge,  if the Manager  makes a
good  faith  determination  that  the  commission  is fair and  reasonable  in
relation  to the  services  provided.  Subject to those  considerations,  as a
factor  in  selecting  brokers  for the  Fund's  portfolio  transactions,  the
Manager  may also  consider  sales of shares of the Fund and other  investment
companies for which the Manager or an affiliate serves as investment advisor.

Brokerage  Practices Followed by the Manager.  The Manager allocates brokerage
for the Fund subject to the  provisions of the investment  advisory  agreement
and the  procedures  and  rules  described  above.  Generally,  the  Manager's
portfolio  traders  allocate  brokerage  based upon  recommendations  from the
Manager's  portfolio  managers.  In certain instances,  portfolio managers may
directly  place trades and allocate  brokerage.  In either case, the Manager's
executive officers supervise the allocation of brokerage.

      Transactions  in  securities  other than those for which an  exchange is
the primary  market are generally done with  principals or market  makers.  In
transactions  on  foreign  exchanges,  the Fund may be  required  to pay fixed
brokerage  commissions  and therefore would not have the benefit of negotiated
commissions  available  in  U.S.  markets.   Brokerage  commissions  are  paid
primarily for  transactions in listed  securities or for certain  fixed-income
agency transactions in the secondary market.  Otherwise brokerage  commissions
are paid only if it appears  likely that a better  price or  execution  can be
obtained by doing so. In an option  transaction,  the Fund ordinarily uses the
same broker for the purchase or sale of the option and any  transaction in the
securities to which the option relates.

      Other funds advised by the Manager have investment  policies  similar to
those of the Fund.  Those other funds may purchase or sell the same securities
as the Fund at the same time as the Fund,  which  could  affect the supply and
price  of  the  securities.  If two  or  more  funds  advised  by the  Manager
purchase  the  same  security  on the same  day  from  the  same  dealer,  the
transactions  under  those  combined  orders  are  averaged  as to  price  and
allocated in accordance  with the purchase or sale orders  actually placed for
each account.

     Most  purchases  of debt  obligations  are  principal  transactions  at net
prices.  Instead of using a broker  for those  transactions,  the Fund  normally
deals  directly with the selling or purchasing  principal or market maker unless
the Manager determines that a better price or execution can be obtained by using
the services of a broker.  Purchases of portfolio  securities from  underwriters
include a  commission  or  concession  paid by the  issuer  to the  underwriter.
Purchases from dealers  include a spread  between the bid and asked prices.  The
Fund seeks to obtain prompt  execution of these orders at the most favorable net
price.

The investment advisory agreement permits the Manager to allocate brokerage for
research services.  The investment research services provided by a particular
broker may be useful only to one or more of the advisory accounts of the
Manager and its affiliates. The investment research received for the
commissions of those other accounts may be useful both to the Fund and one or
more of the Manager's other accounts.  Investment research may be supplied to
the Manager by a third party at the instance of a broker through which trades
are placed.

     Investment research services include information and analysis on particular
companies  and  industries  as well as market or economic  trends and  portfolio
strategy,  market  quotations for portfolio  evaluations,  information  systems,
computer hardware and similar products and services.  If a research service also
assists the Manager in a  non-research  capacity  (such as  bookkeeping or other
administrative  functions),  then only the percentage or component that provides
assistance to the Manager in the investment  decision-making process may be paid
in commission dollars.

      The Board of Trustees  permits the Manager to use stated  commissions on
secondary  fixed-income  agency  trades  to  obtain  research  if  the  broker
represents to the Manager that:  (i) the trade is not from or for the broker's
own  inventory,  (ii) the trade was  executed by the broker on an agency basis
at the  stated  commission,  and (iii) the trade is not a  riskless  principal
transaction.  The Board of Trustees  permits the Manager to use commissions on
fixed-price  offerings to obtain research,  in the same manner as is permitted
for agency transactions.

      The  research  services  provided  by  brokers  broadens  the  scope and
supplements  the research  activities of the Manager.  That research  provides
additional views and comparisons for  consideration,  and helps the Manager to
obtain market  information  for the  valuation of  securities  that are either
held in the  Fund's  portfolio  or are  being  considered  for  purchase.  The
Manager  provides  information  to the  Board  about the  commissions  paid to
brokers furnishing such services,  together with the Manager's  representation
that the amount of such  commissions  was  reasonably  related to the value or
benefit of such services.

       ------------------------------------------------------------------

          Fiscal Year Ended     Total Brokerage Commissions Paid by the
               10/31:                            Fund1
       ------------------------------------------------------------------
       ------------------------------------------------------------------
                2000                           $580,0162
       ------------------------------------------------------------------
       ------------------------------------------------------------------
                2001                          $1,558,8913
       ------------------------------------------------------------------
       ------------------------------------------------------------------
                2002                          $1,124,3314
       ------------------------------------------------------------------
1.    Amounts do not include spreads or commissions on principal  transactions
         on a net trade basis.
         2.   During  the  fiscal   year   ended   10/31/00,   the  amount  of
         transactions directed to brokers for research services
                was  $121,757,422  and the amount of the  commissions  paid to
         broker-dealers for those services
                was $132,848.
         3. During the fiscal year ended 10/31/01,  the amount of transactions
         directed to brokers for research  services was  $500,061,457  and the
         amount of the commissions paid to  broker-dealers  for those services
         was $657,022.
         4. During the fiscal year ended 10/31/02,  the amount of transactions
         directed  to brokers  for  research  services  was  $245,831,696  and
         commissions were $319,458.

                        Distribution and Service Plans

The Distributor.  Under its General Distributor's Agreement with the Fund,
the Distributor, whose primary address is P.O. Box 5270, Denver, CO 80217,
acts as the Fund's principal underwriter in the continuous public offering of
the Fund's different classes of shares. The Distributor bears the expenses
normally attributable to sales, including advertising and the cost of
printing and mailing prospectuses, other than those furnished to existing
shareholders. The Distributor is not obligated to sell a specific number of
shares.

      The sales charges and concessions paid to, or retained by, the
Distributor from the sale of shares during the Fund's three most recent
fiscal years, and the contingent deferred sales charges retained by the
Distributor on the redemption of shares for the three most recent fiscal
years are shown in the tables below.

         -----------------------------------------------------------


                              Aggregate             Class A
             Fiscal           Front-End            Front-End
              Year          Sales Charges        Sales Charges
              Ended          on Class A           Retained by
             10/31:            Shares             Distributor
         -----------------------------------------------------------
         -----------------------------------------------------------
              2000           $8,001,647            $2,223,986
         -----------------------------------------------------------
         -----------------------------------------------------------
              2001           $4,350,671           $1,160,3391
         -----------------------------------------------------------
         -----------------------------------------------------------
              2002           $1,724,680             $534,240
         -----------------------------------------------------------
    1. Includes amount  retained by a broker-dealer  that is an affiliate or a
parent of the Distributor.

     ----------------------------------------------------------------------

                      Concessions   Concessions  Concessions  Concessions
                      on Class A    on Class B   on Class C   on Class N
     Fiscal           Shares        Shares       Shares       Shares
     Year             Advanced by   Advanced by  Advanced by  Advanced by
     Ended            Distributor1  Distributor1 Distributor1 Distributor1
     10/31:
     ----------------------------------------------------------------------
     ----------------------------------------------------------------------
     2000             $601,117      $15,049,373  $1,293,236   N/A
     ----------------------------------------------------------------------
     ----------------------------------------------------------------------
     2001             $480,871      $6,744,263   $613,517     $24,1092
     ----------------------------------------------------------------------
     ----------------------------------------------------------------------
     2002             $141,003      $2,277,844   $265,000     $76,769
     ----------------------------------------------------------------------
1.    The  Distributor  advances  concession  payments  to dealers for certain
   sales of Class A shares  and for sales of Class B and  Class C shares  from
   its own resources at the time of sale.
2.    The inception date of Class N shares was March 1, 2001.

  -----------------------------------------------------------------------------------
  Fiscal   Class A Contingent  Class B Contingent     Class C           Class N
  Year       Deferred Sales      Deferred Sales      Contingent       Contingent
  Ended          Charges            Charges        Deferred Sales   Deferred Sales
  10/31        Retained by        Retained by         Charges           Charges
               Distributor        Distributor       Retained by       Retained by
                                                    Distributor       Distributor
  -----------------------------------------------------------------------------------
  -----------------------------------------------------------------------------------
  2000            $473              $762,760          $39,189             $0
  -----------------------------------------------------------------------------------
  -----------------------------------------------------------------------------------
  2001           $3,441            $1,306,155         $69,810             $0
  -----------------------------------------------------------------------------------
  -----------------------------------------------------------------------------------
  2002           $19,229           $1,380,533         $33,503           $17,023
  -----------------------------------------------------------------------------------

Distribution  and  Service  Plans.  The Fund has  adopted a  Service  Plan for
Class A shares and  Distribution  and  Service  Plans for Class B, Class C and
Class N shares under Rule 12b-1 of the  Investment  Company  Act.  Under those
plans  the  Fund  pays  the  Distributor  for all or a  portion  of its  costs
incurred in connection with the  distribution  and/or  servicing of the shares
of the particular class.

      Each  plan  has  been  approved  by a vote  of the  Board  of  Trustees,
including a majority of the Independent Trustees1,   cast  in   person   at  a
meeting called for the purpose of voting on that plan.

      Under the plans,  the Manager and the  Distributor  may make payments
to  affiliates  and in their sole  discretion,  from time to time,  may use
their own  resources  (at no direct  cost to the Fund) to make  payments to
brokers,  dealers or other  financial  institutions  for  distribution  and
administrative  services  they  perform.  The  Manager  may use its profits
from  the  advisory  fee  it  receives   from  the  Fund.   In  their  sole
discretion,  the  Distributor  and the Manager may increase or decrease the
amount of payments they make from their own resources to plan recipients.

      Unless a plan is terminated as described  below,  the plan  continues in
effect  from year to year but only if the  Fund's  Board of  Trustees  and its
Independent  Trustees  specifically  vote annually to approve its continuance.
Approval must be by a vote cast in person at a meeting  called for the purpose
of voting on  continuing  the plan.  A plan may be  terminated  at any time by
the  vote of a  majority  of the  Independent  Trustees  or by the vote of the
holders of a  "majority"  (as defined in the  Investment  Company  Act) of the
outstanding shares of that class.

      The Board of Trustees  and the  Independent  Trustees  must  approve all
material  amendments to a plan. An amendment to increase materially the amount
of payments to be made under a plan must be  approved by  shareholders  of the
class  affected  by  the  amendment.  Because  Class  B  shares  of  the  Fund
automatically  convert  into  Class A shares  after six  years,  the Fund must
obtain the  approval of both Class A and Class B  shareholders  for a proposed
material  amendment  to  the  Class  A plan  that  would  materially  increase
payments  under the plan.  That approval  must be by a "majority"  (as defined
in the Investment Company Act) of the shares of each Class,  voting separately
by class.

While the plans are in effect, the Treasurer of the Fund shall provide separate
written reports on the plans to the Board of Trustees at least quarterly for
its review.  The reports shall detail the amount of all payments made under a
plan and the purpose for which the payments were made. Those reports are
subject to the review and approval of the Independent Trustees.

     Each plan states that while it is in effect,  the selection and  nomination
of those  Trustees of the Fund who are not  "interested  persons" of the Fund is
committed to the discretion of the Independent  Trustees.  This does not prevent
the involvement of others in the selection and nomination process as long as the
final  decision as to selection or  nomination  is approved by a majority of the
Independent Trustees.

      Under the plan for a class,  no payment will be made to any recipient in
any quarter in which the  aggregate net asset value of all Fund shares of that
class held by the  recipient  for itself and its  customers  does not exceed a
minimum  amount,  if any,  that may be set from time to time by a majority  of
the Independent  Trustees.  The Board of Trustees has set no minimum amount of
assets to qualify for payments  under the plans.

      |X| Class A Service  Plan  Fees.  Under  the Class A service  plan,  the
Distributor  currently uses the fees it receives from the Fund to pay brokers,
dealers  and  other   financial   institutions   (they  are   referred  to  as
"recipients")  for personal  services and account  maintenance  services  they
provide for their  customers  who hold Class A shares.  The services  include,
among  others,  answering  customer  inquiries  about the Fund,  assisting  in
establishing  and  maintaining   accounts  in  the  Fund,  making  the  Fund's
investment  plans available and providing other services at the request of the
Fund or the  Distributor.  While  the plan  permits  the  Board  to  authorize
payments to the  Distributor to reimburse  itself for services under the plan,
the  Board  has not yet  done  so.  The  Distributor  makes  payments  to plan
recipients  quarterly  at an annual  rate not to exceed  0.25% of the  average
annual net assets  consisting  of Class A shares  held in the  accounts of the
recipients  or their  customers.  With  respect to purchases of Class A shares
subject to a  contingent  deferred  sales charge by certain  retirement  plans
that purchased such shares prior to March 1, 2001  ("grandfathered  retirement
accounts"),  the  Distributor  currently  intends  to pay the  service  fee to
Recipients  in advance  for the first  year  after the  shares are  purchased.
After the first year shares are  outstanding,  the  Distributor  makes service
fee payments to Recipients  quarterly on those shares.  The advance payment is
based on the net  asset  value of shares  sold.  While  the plan  permits  the
Board to  authorize  payments  to the  Distributor  to  reimburse  itself  for
services  under the plan, the Board has not yet done so, except in the case of
the  special  arrangement  described  below.  If Class A shares  purchased  by
grandfathered  retirement  accounts are  redeemed  during the first year after
their  purchase,  the  Recipient  of the service  fees on those shares will be
obligated to repay the  Distributor a pro rata portion of the advance  payment
of the service fee made on those shares.

For the fiscal year ended October 31, 2002, payments under the Class A Plan totaled
$1,057,057, of which $267 was retained by the Distributor under the
arrangement described above, and included $67,315 paid to an affiliate of the
Distributor's parent company. Any unreimbursed expenses the Distributor
incurs with respect to Class A shares in any fiscal year cannot be recovered
in subsequent years. During the first year the shares are sold, the
Distributor retains the service fee to reimburse itself for the costs of
distributing the shares. The Distributor may not use payments received under
the Class A Plan to pay any of its interest expenses, carrying charges, or
other financial costs, or allocation of overhead.

      |X| Class B,  Class C and Class N Service  and  Distribution  Plan Fees.
Under  each plan,  service  fees and  distribution  fees are  computed  on the
average of the net asset value of shares in the respective  class,  determined
as of the close of each  regular  business  day during the  period.  Each plan
provides for the  Distributor to be  compensated  at a flat rate,  whether the
Distributor's  distribution expenses are more or less than the amounts paid by
the Fund  under the plan  during  the  period  for which the fee is paid.  The
types  of  services  that  recipients  provide  are  similar  to the  services
provided under the Class A service plan, described above.

      Each plan permits the Distributor to retain both the  asset-based  sales
charges  and  the  service  fees or to pay  recipients  the  service  fee on a
quarterly  basis,  without  payment  in  advance.   However,  the  Distributor
currently  intends to pay the  service  fee to  recipients  in advance for the
first year after the shares  are  purchased.  After the first year  shares are
purchased,  the  Distributor  makes  service fee  payments  quarterly on those
shares.  The advance  payment is based on the net asset value of shares  sold.
Shares  purchased  by exchange  do not  qualify  for the  advance  service fee
payment.  If Class B, Class C or Class N shares are redeemed  during the first
year after their  purchase,  the recipient of the service fees on those shares
will be obligated to repay the  Distributor  a pro rata portion of the advance
payment of the service fee made on those shares.

      The  Distributor  retains the  asset-based  sales  charge on Class B and
Class N shares. The Distributor  retains the asset-based sales charge on Class
C shares  during  the  first  year the  shares  are  outstanding.  It pays the
asset-based sales charge as an ongoing  concession to the recipient on Class C
shares  outstanding  for a year or more.  If a dealer has a special  agreement
with the  Distributor,  the Distributor will pay the Class B, Class C or Class
N service fee and the  asset-based  sales  charge to the dealer  quarterly  in
lieu of paying the sales  concessions  and  service fee in advance at the time
of purchase.

      The  asset-based  sales  charges  on Class B, Class C and Class N shares
allow  investors to buy shares without a front-end sales charge while allowing
the  Distributor to compensate  dealers that sell those shares.  The Fund pays
the asset-based  sales charges to the Distributor for its services rendered in
distributing  Class B, Class C and Class N shares.  The  payments  are made to
the Distributor in recognition that the Distributor:

o     pays sales concessions to authorized  brokers and dealers at the time of
         sale and pays service fees as described above,
o     may  finance  payment of sales  concessions  and/or  the  advance of the
         service fee  payment to  recipients  under the plans,  or may provide
         such  financing  from its own  resources or from the  resources of an
         affiliate,
o     employs personnel to support  distribution of Class B, Class C and Class
         N shares, and
o     bears  the  costs  of sales  literature,  advertising  and  prospectuses
         (other than those furnished to current  shareholders) and state "blue
         sky" registration fees and certain other distribution expenses,
o     may not be able to adequately compensate dealers that sell Class B,
         Class C and Class N shares without receiving payment under the plans
         and therefore may not be able to offer such Classes for sale absent
         the plans,
o     receives payments under the plans consistent with the service fees and
         asset-based sales charges paid by other non-proprietary funds that
         charge 12b-1 fees,
o     may use the payments under the plan to include the Fund in various
         third-party distribution programs that may increase sales of Fund
         shares,
o     may experience increased difficulty selling the Fund's shares if
         payments under the plan are discontinued because most competitor
         funds have plans that pay dealers for rendering distribution
         services as much or more than the amounts currently being paid by
         the Fund, and
o     may not be able to continue providing, at the same or at a lesser cost,
         the same quality distribution sales efforts and services, or to
         obtain such services from brokers and dealers, if the plan payments
         were to be discontinued.

      When Class B, Class C, or Class N shares are sold without the
designation of a broker-dealer, the Distributor is automatically designated
as the broker-dealer of record. In those cases, the Distributor retains the
service fee and asset-based sales charge paid on Class B, Class C and Class N
shares.

      The Distributor's  actual expenses in selling Class B, Class C and Class
N shares  may be more  than  the  payments  it  receives  from the  contingent
deferred  sales charges  collected on redeemed  shares and from the Fund under
the plans.  If the Class B, Class C or Class N plan is terminated by the Fund,
the  Board  of  Trustees  may  allow  the  Fund to  continue  payments  of the
asset-based  sales charge to the  Distributor for  distributing  shares before
the plan was terminated.

All  payments  under the Class B,  Class C and Class N plans are  subject to the
limitations  imposed  by the  Conduct  Rules  of  the  National  Association  of
Securities  Dealers,  Inc. on payments of asset-based  sales charges and service
fees.

   -----------------------------------------------------------------------
     Distribution Fees Paid to the Distributor in the Fiscal Year Ended
                                  10/31/02
   -----------------------------------------------------------------------
   -----------------------------------------------------------------------
    Class:     Total        Amount         Distributor's    Distributor's
                                                            Unreimbursed
                                                             Expenses as
                                             Aggregate        % of Net
             Payments     Retained by      Unreimbursed       Assets of
            Under Plan1   Distributor   Expenses Under Plan     Class
   -----------------------------------------------------------------------
   -----------------------------------------------------------------------
   Class B  $3,863,200    $3,108,386        $18,327,906         6.29%
     Plan
   -----------------------------------------------------------------------
   -----------------------------------------------------------------------
   Class C  $1,125,590     $316,558         $3,097,912          3.72%
     Plan
   -----------------------------------------------------------------------
   -----------------------------------------------------------------------
   Class N    $32,790       $30,509          $216,093           2.44%
     Plan
   -----------------------------------------------------------------------
1.....Includes  amounts  paid  to an  affiliate  of the  Distributor's  parent
   company: $38,747(Class B),  $27,166 (Class C) and $44 (Class N).

                           Performance of the Fund

Explanation  of Performance  Terminology.  The Fund uses a variety of terms to
illustrate its investment  performance.  Those terms include "cumulative total
return,"  "average  annual total return,"  "average annual total return at net
asset  value" and "total  return at net asset  value." An  explanation  of how
total  returns are  calculated  is set forth below.  The charts below show the
Fund's  performance  as of the Fund's  most recent  fiscal  year end.  You can
obtain current  performance  information by calling the Fund's  Transfer Agent
at  1.800.225.5677  or by visiting the  OppenheimerFunds  Internet  website at
http://www.oppenheimerfunds.com.

      The Fund's  illustrations of its performance data in advertisements must
comply  with rules of the  Securities  and  Exchange  Commission.  Those rules
describe  the types of  performance  data that may be used and how it is to be
calculated.  In  general,  any  advertisement  by the Fund of its  performance
data must include the average  annual total returns for the  advertised  class
of shares of the Fund.  Those returns must be shown for the 1-, 5- and 10-year
periods  (or the life of the class,  if less)  ending as of the most  recently
ended calendar quarter prior to the publication of the  advertisement  (or its
submission for publication).

      Use of  standardized  performance  calculations  enables an  investor to
compare the Fund's  performance to the performance of other funds for the same
periods.  However,  a number of factors should be considered  before using the
Fund's   performance   information  as  a  basis  for  comparison  with  other
investments:

      |_| Total returns measure the  performance of a hypothetical  account in
the  Fund  over  various  periods  and do not  show  the  performance  of each
shareholder's  account.  Your account's  performance  will vary from the model
performance  data if your  dividends  are received in cash, or you buy or sell
shares  during the period,  or you bought your shares at a different  time and
price than the shares used in the model.
      |_| The  Fund's  performance  may not  reflect  the  effect  of taxes on
dividends and capital gains distributions.
      |_| An  investment  in the Fund is not  insured by the FDIC or any other
government agency.
      |_| The  principal  value of the Fund's shares and total returns are not
guaranteed and normally will fluctuate on a daily basis.
      |_| When an investor's  shares are  redeemed,  they may be worth more or
less than their original cost.
      |_|  Total  returns  for any  given  past  period  represent  historical
performance  information  and  are  not,  and  should  not  be  considered,  a
prediction of future returns.

      The  performance  of each class of shares is shown  separately,  because
the  performance  of each class of shares will usually be  different.  That is
because  of the  different  kinds of  expenses  each  class  bears.  The total
returns  of  each  class  of  shares  of  the  Fund  are  affected  by  market
conditions,  the  quality  of the Fund's  investments,  the  maturity  of debt
investments,  the  types of  investments  the Fund  holds,  and its  operating
expenses that are allocated to the particular class.

      |X|  Total  Return  Information.  There  are  different  types of "total
returns"  to measure  the Fund's  performance.  Total  return is the change in
value of a hypothetical  investment in the Fund over a given period,  assuming
that  all  dividends  and  capital  gains   distributions  are  reinvested  in
additional  shares  and  that the  investment  is  redeemed  at the end of the
period.  Because of  differences  in  expenses  for each class of shares,  the
total returns for each class are separately  measured.  The  cumulative  total
return  measures the change in value over the entire period (for example,  ten
years).  An average  annual  total return shows the average rate of return for
each year in a period that would produce the cumulative  total return over the
entire  period.  However,  average  annual  total  returns do not show  actual
year-by-year  performance.  The Fund uses  standardized  calculations  for its
total returns as prescribed by the SEC. The methodology is discussed below.

      In  calculating  total returns for Class A shares,  the current  maximum
sales  charge of 5.75% (as a  percentage  of the  offering  price) is deducted
from the initial  investment  ("P")  (unless the return is shown without sales
charge,  as described  below).  For Class B shares,  payment of the applicable
contingent  deferred  sales  charge is  applied,  depending  on the period for
which the return is shown:  5.0% in the first year,  4.0% in the second  year,
3.0% in the third and fourth years,  2.0% in the fifth year, 1.0% in the sixth
year and none  thereafter.  For Class C  shares,  the 1%  contingent  deferred
sales  charge is  deducted  for  returns  for the 1-year  period.  For Class N
shares,  the 1% contingent  deferred  sales charge is deducted for returns for
the one year  period.  Class N total  returns may also be  calculated  for the
periods  prior to 3/01/01 (the  inception  date for Class N shares),  based on
the Fund's  Class A returns,  adjusted  to  reflect  the higher  Class N 12b-1
fees.  There is no sales charge on Class Y shares.

            |_|  Average  Annual  Total  Return.  The  "average  annual  total
return" of each class is an average annual  compounded rate of return for each
year in a  specified  number of years.  It is the rate of return  based on the
change in value of a  hypothetical  initial  investment  of $1,000 ("P" in the
formula  below) held for a number of years ("n" in the  formula) to achieve an
Ending  Redeemable Value ("ERV" in the formula) of that investment,  according
to the following formula:

ERV - 1 = AVERAGE ANNUAL TOTAL RETURN
- -----
 P

|_|   Average Annual Total Return (After Taxes on Distributions). The
"average annual total return (after taxes on distributions)" of Class A
shares is an average annual compounded rate of return for each year in a
specified number of years, adjusted to show the effect of federal taxes
(calculated using the highest individual marginal federal income tax rates in
effect on any reinvestment date) on any distributions made by the Fund during
the specified period. It is the rate of return based on the change in value
of a hypothetical initial investment of $1,000 ("P" in the formula below)
held for a number of years ("n" in the formula) to achieve an ending value
("ATVD" in the formula) of that investment, after taking into account the
effect of taxes on Fund distributions, but not on the redemption of Fund
shares, according to the following formula:


ATVD        - 1=  Average Annual Total Return (After Taxes on
- ----
1/n         Distributions)
  P


|_|   Average Annual Total Return (After Taxes on Distributions and
Redemptions).  The "average annual total return (after taxes on distributions
and redemptions)" of Class A shares is an average annual compounded rate of
return for each year in a specified number of years, adjusted to show the
effect of federal taxes (calculated using the highest individual marginal
federal income tax rates in effect on any reinvestment date) on any
distributions made by the Fund during the specified period and the effect of
capital gains taxes or capital loss tax benefits (each calculated using the
highest federal individual capital gains tax rate in effect on the redemption
date) resulting from the redemption of the shares at the end of the period.
It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n" in the formula) to achieve an ending value ("ATVDR" in the
formula) of that investment, after taking into account the effect of taxes on
fund distributions and on the redemption of Fund shares, according to the
following formula:


ATVDR       - 1=  Average Annual Total Return (After Taxes on
- -----
1/n         Distributions and Redemptions)
  P


            |_|  Cumulative  Total  Return.   The  "cumulative  total  return"
calculation  measures  the  change in value of a  hypothetical  investment  of
$1,000 over an entire period of years.  Its calculation  uses some of the same
factors as average  annual total  return,  but it does not average the rate of
return on an annual basis.  Cumulative total return is determined as follows:

ERV - P = TOTAL RETURN
- -------
   P


            |_| Total  Returns at Net Asset Value.  From time to time the Fund
may also quote a  cumulative  or an average  annual total return "at net asset
value"  (without  deducting  sales  charges)  for Class A, Class B, Class C or
Class N shares.  There is no sales charge on Class Y shares.  Each is based on
the  difference  in net asset value per share at the  beginning and the end of
the  period for a  hypothetical  investment  in that class of shares  (without
considering  front-end or contingent  deferred  sales  charges) and takes into
consideration the reinvestment of dividends and capital gains distributions.

- -------------------------------------------------------------------------------

            The Fund's  Total  Returns for the  Periods  Ended
10/31/02
- ---------------------------------------------------------------
- ---------------------------------------------------------------
             Cumulative                Average   Annual  Total
Class of   Total Returns   Returns
Shares      (10 years or
           Life of Class)
- ---------------------------------------------------------------
- ---------------------------------------------------------------

                                1-Year        5-Year or Life
                                                 of Class
- ---------------------------------------------------------------
- ---------------------------------------------------------------
          After    Without After    Without  After    Without
          Sales    Sales   Sales    Sales    Sales    Sales
           Charge  Charge   Charge   Charge   Charge   Charge
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class A      7.86%1 14.44%1 -25.29%  -20.74%    1.55%1   2.78%1
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class B      8.34%1 10.34%1 -25.33%  -21.40%    1.64%1   2.02%1
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class C     10.34%1 10.34%1 -22.18%  -21.40%    2.02%1   2.02%1
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class N    -41.76%2-41.76%2 -21.76%  -20.97%  -27.70%  -27.70%
- ---------------------------------------------------------------
- ---------------------------------------------------------------
Class Y     17.24%1 17.24%1 -20.29%  -20.29%    3.29%1   3.29%1
- ---------------------------------------------------------------
1.    Inception of Class A, Class B, Class C and Class Y: 12/1/97.
2.    Inception of Class N: 3/1/01.

 -----------------------------------------------------------------------------
        Average Annual Total Returns for Class A Shares1 (After Taxes)
                        For the Periods Ended 10/31/02
 -----------------------------------------------------------------------------
 -----------------------------------------------------------------------------
                                    1-Year           5-Year or Life of Class
 -----------------------------------------------------------------------------
 -----------------------------------------------------------------------------
 After       Taxes      on          -25.29%                   1.54%1
 Distributions
 -----------------------------------------------------------------------------
 -----------------------------------------------------------------------------
 After Taxes on
 Distributions and                  -15.40%                   1.24%1
 Redemption of Fund Shares
 -----------------------------------------------------------------------------
  1. Inception of Class A shares: 12/1/97.

Other Performance  Comparisons.  The Fund compares its performance annually to
that of an  appropriate  broadly-based  market  index in its Annual  Report to
shareholders.  You can obtain that  information  by  contacting  the  Transfer
Agent  at the  addresses  or  telephone  numbers  shown  on the  cover of this
Statement  of   Additional   Information.   The  Fund  may  also  compare  its
performance to that of other  investments,  including  other mutual funds,  or
use rankings of its performance by independent  ranking entities.  Examples of
these performance comparisons are set forth below.

      |X|  Lipper  Rankings.  From  time to time  the  Fund  may  publish  the
ranking  of  the  performance  of  its  classes  of  shares  by  Lipper,  Inc.
("Lipper"),   is  a  widely-recognized   independent  mutual  fund  monitoring
service.  Lipper monitors the performance of regulated  investment  companies,
including  the Fund,  and ranks  their  performance  for  various  periods  in
categories  based on investment  styles.  Lipper ranks the  performance of the
Fund against all other  mid-cap  funds.  The Lipper  performance  rankings are
based  on  total  returns  that  include  the  reinvestment  of  capital  gain
distributions  and income  dividends  but do not take  sales  charges or taxes
into  consideration.   Lipper  also  publishes  "peer-group"  indices  of  the
performance  of all mutual  funds in a category  that it monitors and averages
of the performance of the funds in particular categories.

      |X|  Morningstar  Ratings.  From time to time the Fund may  publish  the
star rating of the performance of its classes of shares by Morningstar,  Inc.,
an  independent  mutual fund  monitoring  service.  Morningstar  rates  mutual
funds in their  specialized  market  sector.  The Fund is rated among  mid-cap
growth funds.

      Morningstar  proprietary star ratings reflect  historical  risk-adjusted
total  investment  return.  For each fund with at least a three-year  history,
Morningstar   calculates  a   Morningstar   Rating(TM)based  on  a  Morningstar
Risk-Adjusted  Return  measure that accounts for variation in a fund's monthly
performance  (including  the effects of sales charges,  loads,  and redemption
fees),  placing more emphasis on downward variations and rewarding  consistent
performance.  The top 10% of  funds in each  category  receive  5  stars,  the
next  22.5%  receive 4 stars,  the next 35%  receive 3 stars,  the next  22.5%
receive 2 stars,  and the  bottom 10%  receive 1 star.  (Each  share  class is
counted  as a fraction  of one fund  within  this scale and rated  separately,
which  may cause  slight  variations  in the  distribution  percentages.)  The
Overall  Morningstar  Rating for a fund is derived from a weighted  average of
the  performance  figures  associated with its three-,  five-and  ten-year (if
applicable) Morningstar Rating metrics.

      |X|   Performance   Rankings  and  Comparisons  by  Other  Entities  and
Publications.  From time to time the Fund may  include  in its  advertisements
and  sales  literature  performance   information  about  the  Fund  cited  in
newspapers and other  periodicals  such as The New York Times, The Wall Street
Journal,  Barron's,  or similar  publications.  That  information  may include
performance  quotations from other sources,  including Lipper and Morningstar.
The   performance  of  the  Fund's  classes  of  shares  may  be  compared  in
publications   to  the   performance   of  various  market  indices  or  other
investments,  and averages,  performance rankings or other benchmarks prepared
by recognized mutual fund statistical services.

From time to time the Fund may include in its advertisements and sales literature
the total return performance of a hypothetical investment account that
includes shares of the fund and other Oppenheimer funds. The combined account
may be part of an illustration of an asset allocation model or similar
presentation. The account performance may combine total return performance of
the fund and the total return performance of other Oppenheimer funds included
in the account. Additionally, from time to time, the Fund's advertisements
and sales literature may include, for illustrative or comparative purposes,
statistical data or other information about general or specific market and
economic conditions. That may include, for example,
o     information  about the performance of certain  securities or commodities
   markets or segments of those markets,
o     information  about  the  performance  of  the  economies  of  particular
   countries or regions,
o     the   earnings  of   companies   included  in  segments  of   particular
   industries, sectors, securities markets, countries or regions,
o     the  availability  of  different  types of  securities  or  offerings of
   securities,
o     information  relating to the gross national or gross domestic product of
   the United States or other countries or regions,
o     comparisons   of  various  market  sectors  or  indices  to  demonstrate
   performance, risk, or other characteristics of the Fund.

ABOUT your account

How to Buy Shares

Additional information is presented below about the methods that can be used
to buy shares of the Fund. Appendix B contains more information about the
special sales charge arrangements offered by the Fund, and the circumstances
in which sales charges may be reduced or waived for certain classes of
investors.

AccountLink.  When shares are purchased through AccountLink, each purchase
must be at least $50 and shareholders must invest at least $500 before an
                     ---
Asset Builder Plan (described below) can be established on a new account.
Accounts established prior to November 1, 2002 will remain at $25 for
additional purchases. Shares will be purchased on the regular business day
the Distributor is instructed to initiate the Automated Clearing House
("ACH") transfer to buy the shares.  Dividends will begin to accrue on shares
purchased with the proceeds of ACH transfers on the business day the Fund
receives Federal Funds for the purchase through the ACH system before the
close of The New York Stock Exchange (the "Exchange"). The Exchange normally
                                     ----------------
closes at 4:00 P.M., but may close earlier on certain days.  If Federal Funds
are received on a business day after the close of the Exchange, the shares
will be purchased and dividends will begin to accrue on the next regular
business day.  The proceeds of ACH transfers are normally received by the
Fund three days after the transfers are initiated. If the proceeds of the ACH
transfer are not received on a timely basis, the Distributor reserves the
right to cancel the purchase order. The Distributor and the Fund are not
responsible for any delays in purchasing shares resulting from delays in ACH
transmissions.

Reduced Sales Charges.  As discussed in the Prospectus, a reduced sales
charge rate may be obtained for Class A shares under Right of Accumulation
and Letters of Intent because of the economies of sales efforts and reduction
in expenses realized by the Distributor, dealers and brokers making such
sales.  No sales charge is imposed in certain other circumstances described
in Appendix B to this Statement of Additional Information because the
Distributor or dealer or broker incurs little or no selling expenses.
      |X|   Right of Accumulation. To qualify for the lower sales charge
rates that apply to larger purchases of Class A shares, you and your spouse
can add together:
o     Class A and Class B shares you purchase for your individual accounts
            (including IRAs and 403(b) plans), or for your joint accounts, or
            for trust or custodial accounts on behalf of your children who
            are minors, and
o     Current purchases of Class A and Class B shares of the Fund and other
            Oppenheimer funds to reduce the sales charge rate that applies to
            current purchases of Class A shares, and
o     Class A and Class B shares of Oppenheimer funds you previously
            purchased subject to an initial or contingent deferred sales
            charge to reduce the sales charge rate for current purchases of
            Class A shares, provided that you still hold your investment in
            one of the Oppenheimer funds.

      A fiduciary can count all shares purchased for a trust, estate or other
fiduciary account (including one or more employee benefit plans of the same
employer) that has multiple accounts. The Distributor will add the value, at
current offering price, of the shares you previously purchased and currently
own to the value of current purchases to determine the sales charge rate that
applies. The reduced sales charge will apply only to current purchases. You
must request it when you buy shares.

The Oppenheimer Funds.  The Oppenheimer funds are those mutual funds for
which the Distributor acts as the distributor and currently include the
following:

Oppenheimer Bond Fund                     Oppenheimer Municipal Bond Fund
Oppenheimer California Municipal Fund     Oppenheimer New Jersey Municipal Fund
Oppenheimer Capital Appreciation Fund     Oppenheimer New York Municipal Fund
Oppenheimer Capital Preservation Fund     Oppenheimer Pennsylvania Municipal Fund
Oppenheimer Capital Income Fund           Oppenheimer Quest Balanced Value Fund
                                          Oppenheimer  Quest  Capital  Value Fund,
Oppenheimer Champion Income Fund          Inc.
                                          Oppenheimer  Quest  Global  Value  Fund,
Oppenheimer Convertible Securities Fund   Inc.
Oppenheimer Developing Markets Fund       Oppenheimer Quest Opportunity Value Fund
Oppenheimer Disciplined Allocation Fund   Oppenheimer Quest Value Fund, Inc.
Oppenheimer Discovery Fund                Oppenheimer Real Asset Fund
                                          Oppenheimer      Rochester      National
Oppenheimer Emerging Growth Fund          Municipals
Oppenheimer Emerging Technologies Fund    Oppenheimer Senior Floating Rate Fund
Oppenheimer Enterprise Fund               Oppenheimer Small Cap Value Fund
Oppenheimer Europe Fund                   Oppenheimer Strategic Income Fund
Oppenheimer Global Fund                   Oppenheimer Total Return Fund, Inc.
Oppenheimer Global Growth & Income Fund   Oppenheimer Trinity Core Fund
                                          Oppenheimer  Trinity  Large  Cap  Growth
Oppenheimer Gold & Special Minerals Fund  Fund
Oppenheimer Growth Fund                   Oppenheimer Trinity Value Fund
Oppenheimer High Yield Fund               Oppenheimer U.S. Government Trust
Oppenheimer International Bond Fund       Oppenheimer Value Fund
Oppenheimer International Growth Fund     Limited-Term New York Municipal Fund
Oppenheimer  International  Small Company
Fund                                      Rochester Fund Municipals
Oppenheimer Limited-Term Government Fund  OSM1- Gartmore Millennium Growth Fund II
Oppenheimer Limited Term Municipal Fund   OSM1 - Jennison Growth Fund
Oppenheimer  Main Street  Growth & Income OSM1 -  Mercury  Advisors  S&P 500 Index
Fund                                      Fund
                                          OSM1 -  Mercury  Advisors  Focus  Growth
Oppenheimer Main Street Opportunity Fund  Fund
Oppenheimer Main Street Small Cap Fund    OSM1 - QM Active Balanced Fund
Oppenheimer MidCap Fund                   OSM1 - Salomon Brothers All Cap Fund
Oppenheimer Multiple Strategies Fund
And the following money market funds:

                                                   Centennial New York Tax Exempt
         Centennial America Fund, L. P.            Trust
         Centennial California Tax
         Exempt Trust                              Centennial Tax Exempt Trust
         Centennial Government Trust               Oppenheimer Cash Reserves
                                                   Oppenheimer Money Market Fund,
         Centennial Money Market Trust             Inc.
1 - "OSM" stands for Oppenheimer Select Managers

      There is an initial sales charge on the purchase of Class A shares of
each of the Oppenheimer funds described above except the money market funds
and Oppenheimer Senior Floating Rate Fund. Under certain circumstances
described in this Statement of Additional Information, redemption proceeds of
certain money market fund shares may be subject to a contingent deferred
sales charge.

Letters of Intent.  Under a Letter of Intent, if you purchase Class A shares
or Class A and Class B shares of the Fund and other Oppenheimer funds during
a 13-month period, you can reduce the sales charge rate that applies to your
purchases of Class A shares.  The total amount of your intended purchases of
both Class A and Class B shares will determine the reduced sales charge rate
for the Class A shares purchased during that period.  You can include
purchases made up to 90 days before the date of the Letter.  Letters of
Intent do not consider Class C or Class N shares you purchase or may have
purchased.

      A Letter of Intent is an investor's statement in writing to the
Distributor of the intention to purchase Class A shares or Class A and Class
B shares of the Fund (and other Oppenheimer funds) during a 13-month period
(the "Letter of Intent period"). At the investor's request, this may include
purchases made up to 90 days prior to the date of the Letter.  The Letter
states the investor's intention to make the aggregate amount of purchases of
shares which, when added to the investor's holdings of shares of those funds,
will equal or exceed the amount specified in the Letter.  Purchases made by
reinvestment of dividends or distributions of capital gains and purchases
made at net asset value without sales charge do not count toward satisfying
the amount of the Letter.

      A Letter enables an investor to count the Class A and Class B shares
purchased under the Letter to obtain the reduced sales charge rate on
purchases of Class A shares of the Fund (and other Oppenheimer funds) that
applies under the Right of Accumulation to current purchases of Class A
shares.  Each purchase of Class A shares under the Letter will be made at the
offering price (including the sales charge) that applies to a single lump-sum
purchase of shares in the amount intended to be purchased under the Letter.

      In submitting a Letter, the investor makes no commitment to purchase
shares. However, if the investor's purchases of shares within the Letter of
Intent period, when added to the value (at offering price) of the investor's
holdings of shares on the last day of that period, do not equal or exceed the
intended purchase amount, the investor agrees to pay the additional amount of
sales charge applicable to such purchases. That amount is described in "Terms
of Escrow," below (those terms may be amended by the Distributor from time to
time).  The investor agrees that shares equal in value to 5% of the intended
purchase amount will be held in escrow by the Transfer Agent subject to the
Terms of Escrow.  Also, the investor agrees to be bound by the terms of the
Prospectus, this Statement of Additional Information and the application used
for a Letter of Intent. If those terms are amended, as they may be from time
to time by the Fund, the investor agrees to be bound by the amended terms and
that those amendments will apply automatically to existing Letters of Intent.

      If the total eligible purchases made during the Letter of Intent period
do not equal or exceed the intended purchase amount, the concessions
previously paid to the dealer of record for the account and the amount of
sales charge retained by the Distributor will be adjusted to the rates
applicable to actual total purchases.  If total eligible purchases during the
Letter of Intent period exceed the intended purchase amount and exceed the
amount needed to qualify for the next sales charge rate reduction set forth
in the Prospectus, the sales charges paid will be adjusted to the lower rate.
That adjustment will be made only if and when the dealer returns to the
Distributor the excess of the amount of concessions allowed or paid to the
dealer over the amount of concessions that apply to the actual amount of
purchases.  The excess concessions returned to the Distributor will be used
to purchase additional shares for the investor's account at the net asset
value per share in effect on the date of such purchase, promptly after the
Distributor's receipt thereof.

      The  Transfer  Agent  will not hold  shares in escrow for  purchases  of
shares of the Fund and other Oppenheimer funds by  OppenheimerFunds  prototype
401(k) plans under a Letter of Intent.  If the intended  purchase amount under
a Letter of Intent entered into by an  OppenheimerFunds  prototype 401(k) plan
is not purchased by the plan by the end of the Letter of Intent period,  there
will be no adjustment of concessions  paid to the  broker-dealer  or financial
institution of record for accounts held in the name of that plan.

      In determining the total amount of purchases made under a Letter,
shares redeemed by the investor prior to the termination of the Letter of
Intent period will be deducted.  It is the responsibility of the dealer of
record and/or the investor to advise the Distributor about the Letter in
placing any purchase orders for the investor during the Letter of Intent
period.  All of such purchases must be made through the Distributor.

      |X|   Terms of Escrow That Apply to Letters of Intent.

      1. Out of the initial purchase (or subsequent purchases if necessary)
made pursuant to a Letter, shares of the Fund equal in value up to 5% of the
intended purchase amount specified in the Letter shall be held in escrow by
the Transfer Agent.  For example, if the intended purchase amount is $50,000,
the escrow shall be shares valued in the amount of $2,500 (computed at the
offering price adjusted for a $50,000 purchase).  Any dividends and capital
gains distributions on the escrowed shares will be credited to the investor's
account.

      2. If the total minimum investment specified under the Letter is
completed within the 13-month Letter of Intent period, the escrowed shares
will be promptly released to the investor.
      3. If, at the end of the 13-month Letter of Intent period the total
purchases pursuant to the Letter are less than the intended purchase amount
specified in the Letter, the investor must remit to the Distributor an amount
equal to the difference between the dollar amount of sales charges actually
paid and the amount of sales charges which would have been paid if the total
amount purchased had been made at a single time.  That sales charge
adjustment will apply to any shares redeemed prior to the completion of the
Letter.  If the difference in sales charges is not paid within twenty days
after a request from the Distributor or the dealer, the Distributor will,
within sixty days of the expiration of the Letter, redeem the number of
escrowed shares necessary to realize such difference in sales charges.  Full
and fractional shares remaining after such redemption will be released from
escrow.  If a request is received to redeem escrowed shares prior to the
payment of such additional sales charge, the sales charge will be withheld
from the redemption proceeds.

      4. By signing the Letter, the investor irrevocably constitutes and
appoints the Transfer Agent as attorney-in-fact to surrender for redemption
any or all escrowed shares.

5.    The shares eligible for purchase under the Letter (or the holding of
which may be counted toward completion of a Letter) include:
(a)   Class A shares sold with a front-end sales charge or subject to a Class
            A contingent deferred sales charge,
(b)   Class B shares of other Oppenheimer funds acquired subject to a
            contingent deferred sales charge, and
(c)   Class A or Class B shares acquired by exchange of either (1) Class A
            shares of one of the other Oppenheimer funds that were acquired
            subject to a Class A initial or contingent deferred sales charge
            or (2) Class B shares of one of the other Oppenheimer funds that
            were acquired subject to a contingent deferred sales charge.

      6. Shares held in escrow hereunder will automatically be exchanged for
shares of another fund to which an exchange is requested, as described in the
section of the Prospectus entitled "How to Exchange Shares" and the escrow
will be transferred to that other fund.

Asset Builder Plans. As explained in the Prospectus, you must initially
establish your account with $500. Subsequently, you can establish an Asset
Builder Plan to automatically purchase additional shares directly from a bank
account for as little as $50. For those accounts established prior to
November 1, 2002 and which have previously established Asset Builder Plans,
additional purchases will remain at $25. Shares purchased by Asset Builder
Plan payments from bank accounts are subject to the redemption restrictions
for recent purchases described in the Prospectus.  Asset Builder Plans are
available only if your bank is an ACH member.  Asset Builder Plans may not be
used to buy shares for OppenheimerFunds employer-sponsored qualified
retirement accounts. Asset Builder Plans also enable shareholders of
Oppenheimer Cash Reserves to use their fund account to make monthly automatic
purchases of shares of up to four other Oppenheimer funds.

      If you make payments from your bank account to purchase shares of the
Fund, your bank account will be debited automatically.  Normally the debit
will be made two business days prior to the investment dates you selected on
your application.  Neither the Distributor, the Transfer Agent nor the Fund
shall be responsible for any delays in purchasing shares that result from
delays in ACH transmissions.

      Before you establish Asset Builder payments, you should obtain a
prospectus of the selected fund(s) from your financial advisor (or the
Distributor) and request an application from the Distributor.  Complete the
application and return it.  You may change the amount of your Asset Builder
payment or you can terminate these automatic investments at any time by
writing to the Transfer Agent.  The Transfer Agent requires a reasonable
period (approximately 10 days) after receipt of your instructions to
implement them.  The Fund reserves the right to amend, suspend or discontinue
offering Asset Builder plans at any time without prior notice.

Retirement Plans. Certain types of retirement plans are entitled to purchase
shares of the Fund without sales charge or at reduced sales charge rates, as
described in Appendix B to this Statement of Additional Information. Certain
special sales charge arrangements described in that Appendix apply to
retirement plans whose records are maintained on a daily valuation basis by
Merrill Lynch Pierce Fenner & Smith, Inc. ("Merrill Lynch") or an independent
record keeper that has a contract or special arrangement with Merrill Lynch.
If on the date the plan sponsor signed the Merrill Lynch record keeping
service agreement the plan has less than $3 million in assets (other than
assets invested in money market funds) invested in applicable investments,
then the retirement plan may purchase only Class B shares of the Oppenheimer
funds. Any retirement plans in that category that currently invest in Class B
shares of the Fund will have their Class B shares converted to Class A shares
of the Fund when the plan's applicable investments reach $5 million.
OppenheimerFunds has entered into arrangements with certain record keepers
whereby the Transfer Agent compensates the record keeper for its record
keeping and account servicing functions that it performs on behalf of the
participant level accounts of a retirement plan.  While such compensation may
act to reduce the record keeping fees charged by the retirement plan's record
keeper, that compensation arrangement may be terminated at any time,
potentially affecting the record keeping fees charged by the retirement
plan's record keeper.

Cancellation of Purchase Orders.  Cancellation of purchase orders for the
Fund's shares (for example, when a purchase check is returned to the Fund
unpaid) causes a loss to be incurred when the net asset values of the Fund's
shares on the cancellation date is less than on the purchase date. That loss
is equal to the amount of the decline in the net asset value per share
multiplied by the number of shares in the purchase order. The investor is
responsible for that loss. If the investor fails to compensate the Fund for
the loss, the Distributor will do so. The Fund may reimburse the Distributor
for that amount by redeeming shares from any account registered in that
investor's name, or the Fund or the Distributor may seek other redress.

Classes of Shares. Each class of shares of the Fund represents an interest in
the same portfolio of investments of the Fund.  However, each class has
different shareholder privileges and features.  The net income attributable
to Class B, Class C or Class N shares and the dividends payable on Class B,
Class C or Class N shares will be reduced by incremental expenses borne
solely by that class. Those expenses include the asset-based sales charges to
which Class B, Class C and Class N shares are subject.

      The availability of different classes of shares permits an investor to
choose the method of purchasing shares that is more appropriate for the
investor. That may depend on the amount of the purchase, the length of time
the investor expects to hold shares, and other relevant circumstances. Class
A shares normally are sold subject to an initial sales charge. While Class B,
Class C and Class N shares have no initial sales charge, the purpose of the
deferred sales charge and asset-based sales charge on Class B, Class C and
Class N shares is the same as that of the initial sales charge on Class A
shares - to compensate the Distributor and brokers, dealers and financial
institutions that sell shares of the Fund.  A salesperson who is entitled to
receive compensation from his or her firm for selling Fund shares may receive
different levels of compensation for selling one class of shares rather than
another.

      The Distributor will not accept any order in the amount of $500,000 or
more for Class B shares or $1 million or more for Class C shares on behalf of
a single investor (not including dealer "street name" or omnibus accounts).
That is because generally it will be more advantageous for that investor to
purchase Class A shares of the Fund.

Class A Shares Subject to a Contingent Deferred Sales Charge. For purchases
of Class A shares at net asset value whether or not subject to a contingent
deferred sales charge as described in the Prospectus, no sales concessions
will be paid to the broker-dealer of record, as described in the Prospectus,
on sales of Class A shares purchased with the redemption proceeds of shares
of another mutual fund offered as an investment option in a retirement plan
in which Oppenheimer funds are also offered as investment options under a
special arrangement with the Distributor, if the purchase occurs more than 30
days after the Oppenheimer funds are added as an investment option under that
plan. Additionally, that concession will not be paid on purchases of Class A
shares by a retirement plan made with the redemption proceeds of Class N
shares of one or more Oppenheimer funds held by the plan for more than 18
months.

      |X|   Class B Conversion. Under current interpretations of applicable
federal income tax law by the Internal Revenue Service, the conversion of
Class B shares to Class A shares after six years is not treated as a taxable
event for the shareholder. If those laws or the IRS interpretation of those
laws should change, the automatic conversion feature may be suspended. In
that event, no further conversions of Class B shares would occur while that
suspension remained in effect.  Although Class B shares could then be
exchanged for Class A shares on the basis of relative net asset value of the
two classes, without the imposition of a sales charge or fee, such exchange
could constitute a taxable event for the shareholder, and absent such
exchange, Class B shares might continue to be subject to the asset-based
sales charge for longer than six years.

      |X|   Availability of Class N Shares.  In addition to the description
of the types of retirement plans which may purchase Class N shares contained
in the prospectus, Class N shares also are offered to the following:
o     to all rollover IRAs (including SEP IRAs and SIMPLE IRAs),
o     to all rollover contributions made to Individual 401(k) plans,
            Profit-Sharing Plans and Money Purchase Pension Plans,
o     to all direct rollovers from OppenheimerFunds-sponsored Pinnacle and
            Ascender retirement plans,
o     to all trustee-to-trustee IRA transfers,
o     to all 90-24 type 403(b) transfers,
o     to Group Retirement Plans (as defined in Appendix B to this Statement
            of Additional Information) which have entered into a special
            agreement with the Distributor for that purpose,
o     to Retirement Plans qualified under Sections 401(a) or 401(k) of the
            Internal Revenue Code, the recordkeeper or the plan sponsor for
            which has entered into a special agreement with the Distributor,
o     to Retirement Plans of a plan sponsor where the aggregate assets of all
            such plans invested in the Oppenheimer funds is $500,000 or more,
o     to OppenheimerFunds-sponsored Ascender 401(k) plans that pay for the
            purchase with the redemption proceeds of Class A shares of one or
            more Oppenheimer funds.
o     to certain customers of broker-dealers and financial advisors that are
            identified in a special agreement between the broker-dealer or
            financial advisor and the Distributor for that purpose.

      The sales concession and the advance of the service fee, as described
in the Prospectus, will not be paid to dealers of record on sales of Class N
shares on:
o     purchases of Class N shares in amounts of $500,000 or more by a
            retirement plan that pays for the purchase with the redemption
            proceeds of Class A shares of one or more Oppenheimer funds
            (other than rollovers from an OppenheimerFunds-sponsored Pinnacle
            or Ascender 401(k) plan to any IRA invested in the Oppenheimer
            funds),
o     purchases of Class N shares in amounts of $500,000 or more by a
            retirement plan that pays for the purchase with the redemption
            proceeds of  Class C shares of one or more Oppenheimer funds held
            by the plan for more than one year (other than rollovers from an
            OppenheimerFunds-sponsored Pinnacle or Ascender 401(k) plan to
            any IRA invested in the Oppenheimer funds), and
o     on purchases of Class N shares by an OppenheimerFunds-sponsored
            Pinnacle or Ascender 401(k) plan made with the redemption
            proceeds of Class A shares of one or more Oppenheimer funds.

      No sales concessions will be paid to the broker-dealer of record, as
described in the Prospectus, on sales of Class N shares purchased with the
redemption proceeds of shares of another mutual fund offered as an investment
option in a retirement plan in which Oppenheimer funds are also offered as
investment options under a special arrangement with the Distributor, if the
purchase occurs more than 30 days after the Oppenheimer funds are added as an
investment option under that plan.

      |X|   Allocation of Expenses. The Fund pays expenses related to its
daily operations, such as custodian fees, Trustees' fees, transfer agency
fees, legal fees and auditing costs.  Those expenses are paid out of the
Fund's assets and are  not paid directly by shareholders.  However, those
expenses reduce the net asset values of shares, and therefore are indirectly
borne by shareholders through their investment.

      The methodology for calculating the net asset value, dividends and
distributions of the Fund's share classes recognizes two types of expenses.
General expenses that do not pertain specifically to any one class are
allocated pro rata to the shares of all classes. The allocation is based on
the percentage of the Fund's total assets that is represented by the assets
of each class, and then equally to each outstanding share within a given
class.  Such general expenses include management fees, legal, bookkeeping and
audit fees, printing and mailing costs of shareholder reports, Prospectuses,
Statements of Additional Information and other materials for current
shareholders, fees to unaffiliated Trustees, custodian expenses, share
issuance costs, organization and start-up costs, interest, taxes and
brokerage commissions, and non-recurring expenses, such as litigation costs.

      Other expenses that are directly attributable to a particular class are
allocated equally to each outstanding share within that class.  Examples of
such expenses include distribution and  service plan (12b-1) fees, transfer
and shareholder servicing agent fees and expenses, and shareholder meeting
expenses (to the extent that such expenses pertain only to a specific class).

Account Fees. As stated in the Prospectus, a $12 annual fee is assessed on
any account valued at less than $500. This fee will not be assessed on the
following accounts:
o     Accounts that have balances below $500 due to the automatic conversion
   of shares from Class B to Class A shares;
o     Accounts with an active Asset Builder Plan, payroll deduction plan or a
   military allotment plan;
o     OppenheimerFunds-sponsored group retirement accounts that are making
   continuing purchases;
o     Certain accounts held by broker-dealers through the National Securities
   Clearing Corporation; and
o     Accounts that fall below the $500 threshold due solely to market
   fluctuations within the 12-month period preceding the date the fee is
   deducted.

      The fee is automatically deducted from qualifying accounts annually on
or about the second to last business day of September.  This annual fee is
waived for any shareholders who elect to access their account documents
through electronic document delivery rather than in paper copy and who elect
to utilize the Internet or PhoneLink as their primary source for their
general servicing needs.  To sign up to access account documents
electronically via eDocs Direct, please visit the Service Center on our
website at www.oppenheimerfunds.com or call 1.888.470.0862 for instructions.
           ------------------------

Determination of Net Asset Values Per Share.  The net asset values per share
of each class of shares of the Fund are determined as of the close of
business of the Exchange on each day that the Exchange is open. The
calculation is done by dividing the value of the Fund's net assets
attributable to a class by the number of shares of that class that are
outstanding.  The Exchange normally closes at 4:00 P.M., Eastern time, but
may close earlier on some other days (for example, in case of weather
emergencies or on days falling before a U.S. holiday).  All references to
time in this Statement of Additional Information mean "Eastern time." The
Exchange's most recent annual announcement (which is subject to change)
states that it will close on New Year's Day, Presidents' Day, Martin Luther
King, Jr. Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.  It may also close on other days.

      Dealers other than Exchange members may conduct trading in certain
securities on days on which the Exchange is closed (including weekends and
holidays) or after 4:00 P.M. on a regular business day. Because the Fund's
net asset values will not be calculated on those days, the Fund's net asset
values per share may be significantly affected on such days when shareholders
may not purchase or redeem shares. Additionally, trading on European and
Asian stock exchanges and over-the-counter markets normally is completed
before the close of the Exchange.

      Changes in the values of securities traded on foreign exchanges or
markets as a result of events that occur after the prices of those securities
are determined, but before the close of The Exchange, will not be reflected
in the Fund's calculation of its net asset values that day unless the Manager
determines that the event is likely to effect a material change in the value
of the security. The Manager, or an internal valuation committee established
by the Manager, as applicable, may establish a valuation, under procedures
established by the Board and subject to the approval, ratification and
confirmation by the Board at its next ensuing meeting.

      |X|   Securities Valuation.  The Fund's Board of Trustees has
established procedures for the valuation of the Fund's securities. In general
those procedures are as follows:
o     Equity securities traded on a U.S. securities exchange or on Nasdaq(R)
are valued as follows:
(1)   if last sale information is regularly reported, they are valued at the
               last reported sale price on the principal exchange on which
               they are traded or on Nasdaq, as applicable, on that day, or
(2)   if last sale information is not available on a valuation date, they are
               valued at the last reported sale price preceding the valuation
               date if it is within the spread of the closing "bid" and
               "asked" prices on the valuation date or, if not,  at the
               closing "bid" price on the valuation date.
o     Equity securities traded on a foreign securities exchange generally are
valued in one of the following ways:
(1)   at the last sale price available to the pricing service approved by the
               Board of Trustees, or
(2)   at the last sale price obtained by the Manager from the report of the
               principal exchange on which the security is traded at its last
               trading session on or immediately before the valuation date, or
(3)   at the mean between the "bid" and "asked" prices obtained from the
               principal exchange on which the security is traded or, on the
               basis of reasonable inquiry, from two market makers in the
               security.
o     Long-term debt securities having a remaining maturity in excess of 60
days are valued based on the mean between the "bid" and "asked" prices
determined by a portfolio pricing service approved by the Fund's Board of
Trustees or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry.
o     The following securities are valued at the mean between the "bid" and
"asked" prices determined by a pricing service approved by the Fund's Board
of Trustees or obtained by the Manager from two active market makers in the
security on the basis of reasonable inquiry:
(1)   debt instruments that have a maturity of more than 397 days when
               issued,
(2)   debt instruments that had a maturity of 397 days or less when issued
               and have a remaining maturity of more than 60 days, and
(3)   non-money market debt instruments that had a maturity of 397 days or
               less when issued and which have a remaining maturity of 60
               days or less.
o     The following securities are valued at cost, adjusted for amortization
of premiums and accretion of discounts:
(1)   money market debt securities held by a non-money market fund that had a
               maturity of less than 397 days when issued that have a
               remaining maturity of 60 days or less, and
(2)   debt instruments held by a money market fund that have a remaining
               maturity of 397 days or less.
o     Securities (including restricted securities) not having
readily-available market quotations are valued at fair value determined under
the Board's procedures.  If the Manager is unable to locate two market makers
willing to give quotes, a security may be priced at the mean between the
"bid" and "asked" prices provided by a single active market maker (which in
certain cases may be the "bid" price if no "asked" price is available).

      In the case of U.S. government securities, mortgage-backed securities,
corporate bonds and foreign government securities, when last sale information
is not generally available, the Manager may use pricing services approved by
the Board of Trustees. The pricing service may use "matrix" comparisons to
the prices for comparable instruments on the basis of quality, yield and
maturity. Other special factors may be involved (such as the tax-exempt
status of the interest paid by municipal securities).  The Manager will
monitor the accuracy of the pricing services. That monitoring may include
comparing prices used for portfolio valuation to actual sales prices of
selected securities.

      The closing prices in the London foreign exchange market on a
particular business day that are provided to the Manager by a bank, dealer or
pricing service that the Manager has determined to be reliable are used to
value foreign currency, including forward contracts, and to convert to U.S.
dollars securities that are denominated in foreign currency.

      Puts, calls, and futures are valued at the last sale price on the
principal exchange on which they are traded or on Nasdaq, as applicable, as
determined by a pricing service approved by the Board of Trustees or by the
Manager.  If there were no sales that day, they shall be valued at the last
sale price on the preceding trading day if it is within the spread of the
closing "bid" and "asked" prices on the principal exchange or on Nasdaq on
the valuation date. If not, the value shall be the closing bid price on the
principal exchange or on Nasdaq on the valuation date.  If the put, call or
future is not traded on an exchange or on Nasdaq, it shall be valued by the
mean between "bid" and "asked" prices obtained by the Manager from two active
market makers. In certain cases that may be at the "bid" price if no "asked"
price is available.

      When the Fund writes an option, an amount equal to the premium received
is included in the Fund's Statement of Assets and Liabilities as an asset. An
equivalent credit is included in the liability section.  The credit is
adjusted ("marked-to-market") to reflect the current market value of the
option. In determining the Fund's gain on investments, if a call or put
written by the Fund is exercised, the proceeds are increased by the premium
received.  If a call or put written by the Fund expires, the Fund has a gain
in the amount of the premium. If the Fund enters into a closing purchase
transaction, it will have a gain or loss, depending on whether the premium
received was more or less than the cost of the closing transaction.  If the
Fund exercises a put it holds, the amount the Fund receives on its sale of
the underlying investment is reduced by the amount of premium paid by the
Fund.

How to Sell Shares

The information below supplements the terms and conditions for redeeming
shares set forth in the Prospectus.

Reinvestment Privilege.  Within six months of a redemption, a shareholder may
reinvest all or part of the redemption proceeds of:
o     Class A shares purchased subject to an initial sales charge or Class A
         shares on which a contingent deferred sales charge was paid, or
o     Class B shares that were subject to the Class B contingent deferred
         sales charge when redeemed.
      The reinvestment may be made without sales charge only in Class A
shares of the Fund or any of the other Oppenheimer funds into which shares of
the Fund are exchangeable as described in "How to Exchange Shares" below.
Reinvestment will be at the net asset value next computed after the Transfer
Agent receives the reinvestment order.  The shareholder must ask the Transfer
Agent for that privilege at the time of reinvestment. This privilege does not
apply to Class C, Class N or Class Y shares. The Fund may amend, suspend or
cease offering this reinvestment privilege at any time as to shares redeemed
after the date of such amendment, suspension or cessation.

      Any capital gain that was realized when the shares were redeemed is
taxable, and reinvestment will not alter any capital gains tax payable on
that gain.  If there has been a capital loss on the redemption, some or all
of the loss may not be tax deductible, depending on the timing and amount of
the reinvestment.  Under the Internal Revenue Code, if the redemption
proceeds of Fund shares on which a sales charge was paid are reinvested in
shares of the Fund or another of the Oppenheimer funds within 90 days of
payment of the sales charge, the shareholder's basis in the shares of the
Fund that were redeemed may not include the amount of the sales charge paid.
That would reduce the loss or increase the gain recognized from the
redemption.  However, in that case the sales charge would be added to the
basis of the shares acquired by the reinvestment of the redemption proceeds.

Payments "In Kind". The Prospectus states that payment for shares tendered
for redemption is ordinarily made in cash. However, under certain
circumstances, the Board of Trustees of the Fund may determine that it would
be detrimental to the best interests of the remaining shareholders of the
Fund to make payment of a redemption order wholly or partly in cash. In that
case, the Fund may pay the redemption proceeds in whole or in part by a
distribution "in kind" of liquid securities from the portfolio of the Fund,
in lieu of cash.

      The Fund has elected to be governed by Rule 18f-1 under the Investment
Company Act. Under that rule, the Fund is obligated to redeem shares solely
in cash up to the lesser of $250,000 or 1% of the net assets of the Fund
during any 90-day period for any one shareholder. If shares are redeemed in
kind, the redeeming shareholder might incur brokerage or other costs in
selling the securities for cash. The Fund will value securities used to pay
redemptions in kind using the same method the Fund uses to value its
portfolio securities described above under "Determination of Net Asset Values
Per Share." That valuation will be made as of the time the redemption price
is determined.

Involuntary Redemptions. The Fund's Board of Trustees has the right to cause
the involuntary redemption of the shares held in any account if the aggregate
net asset value of those shares is less than $200 or such lesser amount as
the Board may fix.  The Board will not cause the involuntary redemption of
shares in an account if the aggregate net asset value of such shares has
fallen below the stated minimum solely as a result of market fluctuations.
If the Board exercises this right, it may also fix the requirements for any
notice to be given to the shareholders in question (not less than 30 days).
The Board may alternatively set requirements for the shareholder to increase
the investment, or set other terms and conditions so that the shares would
not be involuntarily redeemed.

Transfers of Shares.  A transfer of shares to a different registration is not
an event that triggers the payment of sales charges. Therefore, shares are
not subject to the payment of a contingent deferred sales charge of any class
at the time of transfer to the name of another person or entity. It does not
matter whether the transfer occurs by absolute assignment, gift or bequest,
as long as it does not involve, directly or indirectly, a public sale of the
shares.  When shares subject to a contingent deferred sales charge are
transferred, the transferred shares will remain subject to the contingent
deferred sales charge. It will be calculated as if the transferee shareholder
had acquired the transferred shares in the same manner and at the same time
as the transferring shareholder.

      If less than all shares held in an account are transferred, and some
but not all shares in the account would be subject to a contingent deferred
sales charge if redeemed at the time of transfer, the priorities described in
the Prospectus under "How to Buy Shares" for the imposition of the Class B,
Class C and Class N contingent deferred sales charge will be followed in
determining the order in which shares are transferred.

Distributions From Retirement Plans.  Requests for distributions from
OppenheimerFunds-sponsored IRAs, SEP-IRAs, SIMPLE IRAs, 403(b)(7) custodial
plans, 401(k) plans or pension or profit-sharing plans should be addressed to
"Trustee, OppenheimerFunds Retirement Plans," c/o the Transfer Agent at its
address listed in "How To Sell Shares" in the Prospectus or on the back cover
of this Statement of Additional Information.  The request must:
(1)   state the reason for the distribution;
(2)   state the owner's awareness of tax penalties if the distribution is
         premature; and
(3)   conform to the requirements of the plan and the Fund's other redemption
         requirements.

      Participants (other than self-employed plan sponsors) in
OppenheimerFunds-sponsored pension or profit-sharing plans with shares of the
Fund held in the name of the plan or its fiduciary may not directly request
redemption of their accounts.  The plan administrator or fiduciary must sign
the request.

      Distributions from pension and profit sharing plans are subject to
special requirements under the Internal Revenue Code and certain documents
(available from the Transfer Agent) must be completed and submitted to the
Transfer Agent before the distribution may be made.  Distributions from
retirement plans are subject to withholding requirements under the Internal
Revenue Code, and IRS Form W-4P (available from the Transfer Agent) must be
submitted to the Transfer Agent with the distribution request, or the
distribution may be delayed.  Unless the shareholder has provided the
Transfer Agent with a certified tax identification number, the Internal
Revenue Code requires that tax be withheld from any distribution even if the
shareholder elects not to have tax withheld.  The Fund, the Manager, the
Distributor, and the Transfer Agent assume no responsibility to determine
whether a distribution satisfies the conditions of applicable tax laws and
will not be responsible for any tax penalties assessed in connection with a
distribution.


Special Arrangements for Repurchase of Shares from Dealers and Brokers.  The
Distributor is the Fund's agent to repurchase its shares from authorized
dealers or brokers on behalf of their customers.  Shareholders should contact
their broker or dealer to arrange this type of redemption. The repurchase
price per share will be the net asset value next computed after the
Distributor receives an order placed by the dealer or broker. However, if the
Distributor receives a repurchase order from a dealer or broker after the
close of the Exchange on a regular business day, it will be processed at that
day's net asset value if the order was received by the dealer or broker from
its customers prior to the time the Exchange closes. Normally, the Exchange
closes at 4:00 P.M., but may do so earlier on some days. Additionally, the
order must have been transmitted to and received by the Distributor prior to
its close of business that day (normally 5:00 P.M.).

      Ordinarily, for accounts redeemed by a broker-dealer under this
procedure, payment will be made within three business days after the shares
have been redeemed upon the Distributor's receipt of the required redemption
documents in proper form. The signature(s) of the registered owners on the
redemption documents must be guaranteed as described in the Prospectus.

Automatic Withdrawal and Exchange Plans.  Investors owning shares of the Fund
valued at $5,000 or more can authorize the Transfer Agent to redeem shares
(having a value of at least $50) automatically on a monthly, quarterly,
semi-annual or annual basis under an Automatic Withdrawal Plan.  Shares will
be redeemed three business days prior to the date requested by the
shareholder for receipt of the payment.  Automatic withdrawals of up to
$1,500 per month may be requested by telephone if payments are to be made by
check payable to all shareholders of record. Payments must also be sent to
the address of record for the account and the address must not have been
changed within the prior 30 days.  Required minimum distributions from
OppenheimerFunds-sponsored retirement plans may not be arranged on this
basis.

      Payments are normally made by check, but shareholders having
AccountLink privileges (see "How To Buy Shares") may arrange to have
Automatic Withdrawal Plan payments transferred to the bank account designated
on the account application or by signature-guaranteed instructions sent to
the Transfer Agent.  Shares are normally redeemed pursuant to an Automatic
Withdrawal Plan three business days before the payment transmittal date you
select in the account application.  If a contingent deferred sales charge
applies to the redemption, the amount of the check or payment will be reduced
accordingly.

      The Fund cannot guarantee receipt of a payment on the date requested.
The Fund reserves the right to amend, suspend or discontinue offering these
plans at any time without prior notice. Because of the sales charge assessed
on Class A share purchases, shareholders should not make regular additional
Class A share purchases while participating in an Automatic Withdrawal Plan.
Class B, Class C and Class N shareholders should not establish automatic
withdrawal plans, because of the potential imposition of the contingent
deferred sales charge on such withdrawals (except where the Class B, Class C
or Class N contingent deferred sales charge is waived as described in
Appendix B to this Statement of Additional Information).


      By requesting an Automatic Withdrawal or Exchange Plan, the shareholder
agrees to the terms and conditions that apply to such plans, as stated
below.  These provisions may be amended from time to time by the Fund and/or
the Distributor.  When adopted, any amendments will automatically apply to
existing Plans.

      |X|   Automatic Exchange Plans.  Shareholders can authorize the
Transfer Agent to exchange a pre-determined amount of shares of the Fund for
shares (of the same class) of other Oppenheimer funds automatically on a
monthly, quarterly, semi-annual or annual basis under an Automatic Exchange
Plan. The minimum amount that may be exchanged to each other fund account is
$50. Instructions should be provided on the OppenheimerFunds Application or
signature-guaranteed instructions. Exchanges made under these plans are
subject to the restrictions that apply to exchanges as set forth in "How to
Exchange Shares" in the Prospectus and below in this Statement of Additional
Information.

Automatic  Withdrawal  Plans.  Fund shares will be  redeemed as  necessary  to
meet  withdrawal  payments.  Shares  acquired  without a sales  charge will be
redeemed first.  Shares  acquired with reinvested  dividends and capital gains
distributions will be redeemed next,  followed by shares acquired with a sales
charge,  to the extent necessary to make withdrawal  payments.  Depending upon
the amount  withdrawn,  the  investor's  principal  may be depleted.  Payments
made under these plans should not be  considered  as a yield or income on your
investment.

      The Transfer Agent will administer the investor's Automatic Withdrawal
Plan as agent for the shareholder(s) (the "Planholder") who executed the Plan
authorization and application submitted to the Transfer Agent.  Neither the
Fund nor the Transfer Agent shall incur any liability to the Planholder for
any action taken or not taken by the Transfer Agent in good faith to
administer the Plan. Share certificates will not be issued for shares of the
Fund purchased for and held under the Plan, but the Transfer Agent will
credit all such shares to the account of the Planholder on the records of the
Fund. Any share certificates held by a Planholder may be surrendered
unendorsed to the Transfer Agent with the Plan application so that the shares
represented by the certificate may be held under the Plan.

      For accounts subject to Automatic Withdrawal Plans, distributions of
capital gains must be reinvested in shares of the Fund, which will be done at
net asset value without a sales charge. Dividends on shares held in the
account may be paid in cash or reinvested.

      Shares will be redeemed to make withdrawal payments at the net asset
value per share determined on the redemption date.  Checks or AccountLink
payments representing the proceeds of Plan withdrawals will normally be
transmitted three business days prior to the date selected for receipt of the
payment, according to the choice specified in writing by the Planholder.
Receipt of payment on the date selected cannot be guaranteed.

      The amount and the interval of disbursement payments and the address to
which checks are to be mailed or AccountLink payments are to be sent may be
changed at any time by the Planholder by writing to the Transfer Agent.  The
Planholder should allow at least two weeks' time after mailing such
notification for the requested change to be put in effect.  The Planholder
may, at any time, instruct the Transfer Agent by written notice to redeem
all, or any part of, the shares held under the Plan. That notice must be in
proper form in accordance with the requirements of the then-current
Prospectus of the Fund. In that case, the Transfer Agent will redeem the
number of shares requested at the net asset value per share in effect and
will mail a check for the proceeds to the Planholder.

      The Planholder may terminate a Plan at any time by writing to the
Transfer Agent.  The Fund may also give directions to the Transfer Agent to
terminate a Plan. The Transfer Agent will also terminate a Plan upon its
receipt of evidence satisfactory to it that the Planholder has died or is
legally incapacitated. Upon termination of a Plan by the Transfer Agent or
the Fund, shares that have not been redeemed will be held in uncertificated
form in the name of the Planholder. The account will continue as a
dividend-reinvestment, uncertificated account unless and until proper
instructions are received from the Planholder, his or her executor or
guardian, or another authorized person.

      To use shares held under the Plan as collateral for a debt, the
Planholder may request issuance of a portion of the shares in certificated
form.  Upon written request from the Planholder, the Transfer Agent will
determine the number of shares for which a certificate may be issued without
causing the withdrawal checks to stop. However, should such uncertificated
shares become exhausted, Plan withdrawals will terminate.

      If the Transfer Agent ceases to act as transfer agent for the Fund, the
Planholder will be deemed to have appointed any successor transfer agent to
act as agent in administering the Plan.

How to Exchange Shares

As stated in the Prospectus, shares of a particular class of Oppenheimer
funds having more than one class of shares may be exchanged only for shares
of the same class of other Oppenheimer funds. Shares of Oppenheimer funds
that have a single class without a class designation are deemed "Class A"
shares for this purpose. You can obtain a current list showing which funds
offer which classes of shares by calling the Distributor.

o     All of the Oppenheimer funds currently offer Class A, B, C, N and Y
   shares with the following exceptions:

      The following funds only offer Class A shares:
      Centennial America Fund, L.P.           Centennial New York Tax Exempt
                                              Trust
      Centennial California Tax Exempt Trust  Centennial Tax Exempt Trust
      Centennial Government Trust             Oppenheimer Money Market Fund, Inc.
      Centennial Money Market Trust

      The following funds do not offer Class N shares:
      Oppenheimer California Municipal Fund   Oppenheimer Pennsylvania Municipal
                                              Fund
      Oppenheimer Limited Term Municipal Fund Oppenheimer Rochester National
                                              Municipals
      Oppenheimer Municipal Bond Fund         Oppenheimer Senior Floating Rate
                                              Fund
      Oppenheimer New Jersey Municipal Fund   Limited Term New York Municipal
                                              Fund
      Oppenheimer New York Municipal Fund     Rochester Fund Municipals

      The following funds do not offer Class Y shares:
      Oppenheimer California Municipal Fund   Oppenheimer Limited Term Municipal
                                              Fund
      Oppenheimer Capital Income Fund         Oppenheimer Multiple Strategies
                                              Fund
      Oppenheimer Cash Reserves               Oppenheimer New Jersey Municipal
                                              Fund
      Oppenheimer Champion Income Fund        Oppenheimer New York Municipal Fund
      Oppenheimer Convertible Securities Fund Oppenheimer Pennsylvania Municipal
                                              Fund
      Oppenheimer Disciplined Allocation Fund Oppenheimer Quest Capital Value
                                              Fund, Inc.
      Oppenheimer Developing Markets Fund     Oppenheimer Quest Global Value
                                              Fund, Inc.
      Oppenheimer Gold & Special Minerals     Oppenheimer Rochester National
      Fund                                    Municipals
      Oppenheimer International Bond Fund     Oppenheimer Senior Floating Rate
                                              Fund
      Oppenheimer International Growth Fund   Oppenheimer Small Cap Value Fund
      Oppenheimer International Small         Limited Term New York Municipal
      Company Fund                            Fund

o     Class Y shares of Oppenheimer Real Asset Fund may not be exchanged for
      shares of any other fund.
o     Class B, Class C and Class N shares of Oppenheimer Cash Reserves are
      generally available only by exchange from the same class of shares of
      other Oppenheimer funds or through OppenheimerFunds-sponsored 401(k)
      plans.
o     Class M shares of Oppenheimer Convertible Securities Fund may be
      exchanged only for Class A shares of other Oppenheimer funds. They may
      not be acquired by exchange of shares of any class of any other
      Oppenheimer funds except Class A shares of Oppenheimer Money Market
      Fund or Oppenheimer Cash Reserves acquired by exchange of Class M
      shares.
o     Class X shares of Limited Term New York Municipal Fund may be exchanged
      only for Class B shares of other Oppenheimer funds and no exchanges may
      be made to Class X shares.
o     Shares of Oppenheimer Capital Preservation Fund may not be exchanged
      for shares of Oppenheimer Money Market Fund, Inc., Oppenheimer Cash
      Reserves or Oppenheimer Limited-Term Government Fund.  Only
      participants in certain retirement plans may purchase shares of
      Oppenheimer Capital Preservation Fund, and only those participants may
      exchange shares of other Oppenheimer funds for shares of Oppenheimer
      Capital Preservation Fund.
o     Class A shares of Oppenheimer Senior Floating Rate Fund are not
      available by exchange of shares of Oppenheimer Money Market Fund or
      Class A shares of Oppenheimer Cash Reserves.
o     Shares of Oppenheimer Select Managers Mercury Advisors S&P Index Fund
      and Oppenheimer Select Managers QM Active Balanced Fund are only
      available to retirement plans and are available only by exchange from
      the same class of shares of other Oppenheimer funds held by retirement
      plans.
o     Class A shares of Oppenheimer funds may be exchanged at net asset value
      for shares of any money market fund offered by the Distributor. Shares
      of any money market fund purchased without a sales charge may be
      exchanged for shares of Oppenheimer funds offered with a sales charge
      upon payment of the sales charge. They may also be used to purchase
      shares of Oppenheimer funds subject to an early withdrawal charge or
      contingent deferred sales charge.
o     Shares of Oppenheimer Money Market Fund, Inc. purchased with the
      redemption proceeds of shares of other mutual funds (other than funds
      managed by the Manager or its subsidiaries) redeemed within the 30 days
      prior to that purchase may subsequently be exchanged for shares of
      other Oppenheimer funds without being subject to an initial sales
      charge or contingent deferred sales charge. To qualify for that
      privilege, the investor or the investor's dealer must notify the
      Distributor of eligibility for this privilege at the time the shares of
      Oppenheimer Money Market Fund, Inc. are purchased. If requested, they
      must supply proof of entitlement to this privilege.
o     Shares of the Fund acquired by reinvestment of dividends or
      distributions from any of the other Oppenheimer funds or from any unit
      investment trust for which reinvestment arrangements have been made
      with the Distributor may be exchanged at net asset value for shares of
      any of the Oppenheimer funds.

      The Fund may amend, suspend or terminate the exchange privilege at any
time. Although the Fund may impose these changes at any time, it will provide
you with notice of those changes whenever it is required to do so by
applicable law. It may be required to provide 60 days' notice prior to
materially amending or terminating the exchange privilege. That 60 day notice
is not required in extraordinary circumstances.

      |X|   How Exchanges Affect Contingent Deferred Sales Charges. No
contingent deferred sales charge is imposed on exchanges of shares of any
class purchased subject to a contingent deferred sales charge, with the
following exceptions:

o     When Class A shares of any Oppenheimer fund (other than Rochester
   National Municipals and Rochester Fund Municipals) acquired by exchange of
   Class A shares of any Oppenheimer fund purchased subject to a Class A
   contingent deferred sales charge are redeemed within 18 months measured
   from the beginning of the calendar month of the initial purchase of the
   exchanged Class A shares, the Class A contingent deferred sales charge is
   imposed on the redeemed shares.

o     When Class A shares of Rochester National Municipals and Rochester Fund
   Municipals acquired by exchange of Class A shares of any Oppenheimer fund
   purchased subject to a Class A contingent deferred sales charge are
   redeemed within 24 months of the beginning of the calendar month of the
   initial purchase of the exchanged Class A shares, the Class A contingent
   deferred sales charge is imposed on the redeemed shares.
o     If any Class A shares of another Oppenheimer fund that are exchanged
   for Class A shares of Oppenheimer Senior Floating Rate Fund are subject to
   the Class A contingent deferred sales charge of the other Oppenheimer fund
   at the time of exchange, the holding period for that Class A contingent
   deferred sales charge will carry over to the Class A shares of Oppenheimer
   Senior Floating Rate Fund acquired in the exchange. The Class A shares of
   Oppenheimer Senior Floating Rate Fund acquired in that exchange will be
   subject to the Class A Early Withdrawal Charge of Oppenheimer Senior
   Floating Rate Fund if they are repurchased before the expiration of the
   holding period.

o     When Class A shares of Oppenheimer Cash Reserves and Oppenheimer Money
   Market Fund, Inc. acquired by exchange of Class A shares of any
   Oppenheimer fund purchased subject to a Class A contingent deferred sales
   charge are redeemed within the Class A holding period of the fund from
   which the shares were exchanged, the Class A contingent deferred sales
   charge of the fund from which the shares were exchanged is imposed on the
   redeemed shares.

o     With respect to Class B shares, the Class B contingent deferred sales
   charge is imposed on Class B shares acquired by exchange if they are
   redeemed within six years of the initial purchase of the exchanged Class B
   shares.

o     With respect to Class C shares, the Class C contingent deferred sales
   charge is imposed on Class C shares acquired by exchange if they are
   redeemed within 12 months of the initial purchase of the exchanged Class C
   shares.

o     With respect to Class N shares, a 1% contingent deferred sales charge
   will be imposed if the retirement plan (not including IRAs and 403(b)
   plans) is terminated or Class N shares of all Oppenheimer funds are
   terminated as an investment option of the plan and Class N shares are
   redeemed within 18 months after the plan's first purchase of Class N
   shares of any Oppenheimer fund or with respect to an individual retirement
   plan or 403(b) plan, Class N shares are redeemed within 18 months of the
   plan's first purchase of Class N shares of any Oppenheimer fund.

o     When Class B, Class C or Class N shares are redeemed to effect an
   exchange, the priorities described in "How To Buy Shares" in the
   Prospectus for the imposition of the Class B, Class C or Class N
   contingent deferred sales charge will be followed in determining the order
   in which the shares are exchanged. Before exchanging shares, shareholders
   should take into account how the exchange may affect any contingent
   deferred sales charge that might be imposed in the subsequent redemption
   of remaining shares.

      Shareholders owning shares of more than one class must specify which
class of shares they wish to exchange.

      |X|   Limits on Multiple Exchange Orders. The Fund reserves the right
to reject telephone or written exchange requests submitted in bulk by anyone
on behalf of more than one account.  The Fund may accept requests for
exchanges of up to 50 accounts per day from representatives of authorized
dealers that qualify for this privilege.

      |X|   Telephone Exchange Requests. When exchanging shares by telephone,
a shareholder must have an existing account in the fund to which the exchange
is to be made. Otherwise, the investors must obtain a prospectus of that fund
before the exchange request may be submitted. If all telephone lines are busy
(which might occur, for example, during periods of substantial market
fluctuations), shareholders might not be able to request exchanges by
telephone and would have to submit written exchange requests.

Processing  Exchange  Requests.  Shares to be  exchanged  are  redeemed on the
regular  business  day the  Transfer  Agent  receives an  exchange  request in
proper  form  (the  "Redemption  Date").  Normally,  shares  of the fund to be
acquired are  purchased on the  Redemption  Date,  but such  purchases  may be
delayed  by either  fund up to five  business  days if it  determines  that it
would be  disadvantaged by an immediate  transfer of the redemption  proceeds.
The Fund  reserves  the  right,  in its  discretion,  to refuse  any  exchange
request  that may  disadvantage  it. For  example,  if the receipt of multiple
exchange  requests  from a dealer might require the  disposition  of portfolio
securities at a time or at a price that might be  disadvantageous to the Fund,
the Fund may refuse the request.

      When you exchange some or all of your shares from one fund to another,
any special account feature such as an Asset Builder Plan or Automatic
Withdrawal Plan, will be switched to the new fund account unless you tell the
Transfer Agent not to do so.  However, special redemption and exchange
features such as Automatic Exchange Plans and Automatic Withdrawal Plans
cannot be switched to an account in Oppenheimer Senior Floating Rate Fund.

      In connection with any exchange request, the number of shares exchanged
may be less than the number requested if the exchange or the number requested
would include shares subject to a restriction cited in the Prospectus or this
Statement of Additional Information, or would include shares covered by a
share certificate that is not tendered with the request.  In those cases,
only the shares available for exchange without restriction will be exchanged.

      The different Oppenheimer funds available for exchange have different
investment objectives, policies and risks. A shareholder should assure that
the fund selected is appropriate for his or her investment and should be
aware of the tax consequences of an exchange.  For federal income tax
purposes, an exchange transaction is treated as a redemption of shares of one
fund and a purchase of shares of another.  "Reinvestment Privilege," above,
discusses some of the tax consequences of reinvestment of redemption proceeds
in such cases.  The Fund, the Distributor, and the Transfer Agent are unable
to provide investment, tax or legal advice to a shareholder in connection
with an exchange request or any other investment transaction.

Dividends, Capital Gains and Taxes

Dividends and Distributions. The Fund has no fixed dividend rate and there
can be no assurance as to the payment of any dividends or the realization of
any capital gains. The dividends and distributions paid by a class of shares
will vary from time to time depending on market conditions, the composition
of the Fund's portfolio, and expenses borne by the Fund or borne separately
by a class. Dividends are calculated in the same manner, at the same time,
and on the same day for each class of shares. However, dividends on Class B,
Class C and Class N shares are expected to be lower than dividends on Class A
and Class Y shares. That is because of the effect of the asset-based sales
charge on Class B, Class C and Class N shares. Those dividends will also
differ in amount as a consequence of any difference in the net asset values
of the different classes of shares.

Dividends, distributions and proceeds of the redemption of Fund shares
represented by
checks returned to the Transfer Agent by the Postal Service as undeliverable
will be invested in shares of Oppenheimer Money Market Fund, Inc.
Reinvestment will be made as promptly as possible after the return of such
checks to the Transfer Agent, to enable the investor to earn a return on
otherwise idle funds. Unclaimed accounts may be subject to state escheatment
laws, and the Fund and the Transfer Agent will not be liable to shareholders
or their representatives for compliance with those laws in good faith.

Tax Status of the Fund's Dividends, Distributions and Redemptions of Shares.
The federal tax treatment of the Fund's dividends and capital gains
distributions is briefly highlighted in the Prospectus. The following is only
a summary of certain additional tax considerations generally affecting the
Fund and its shareholders.

      The tax discussion in the Prospectus and this Statement of Additional
Information is based on tax law in effect on the date of the Prospectus and
this Statement of Additional Information. Those laws and regulations may be
changed by legislative, judicial, or administrative action, sometimes with
retroactive effect. State and local tax treatment of ordinary income
dividends and capital gain dividends from regulated investment companies may
differ from the treatment under the Internal Revenue Code described below.
Potential purchasers of shares of the Fund are urged to consult their tax
advisers with specific reference to their own tax circumstances as well as
the consequences of federal, state and local tax rules affecting an
investment in the Fund.

Qualification as a Regulated Investment Company.  The Fund has elected to be
taxed as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended.  As a regulated investment company, the
Fund is not subject to federal income tax on the portion of its net
investment income (that is, taxable interest, dividends, and other taxable
ordinary income, net of expenses) and capital gain net income (that is, the
excess of net long-term capital gains over net short-term capital losses)
that it distributes to shareholders. That qualification enables the Fund to
"pass through" its income and realized capital gains to shareholders without
having to pay tax on them. This avoids a "double tax" on that income and
capital gains, since shareholders normally will be taxed on the dividends and
capital gains they receive from the Fund (unless their Fund shares are held
in a retirement account or the shareholder is otherwise exempt from tax).

      The Internal Revenue Code contains a number of complex tests relating
to qualification that the Fund might not meet in a particular year. If it did
not qualify as a regulated investment company, the Fund would be treated for
tax purposes as an ordinary corporation and would receive no tax deduction
for payments made to shareholders.

      To qualify as a regulated investment company, the Fund must distribute
at least 90% of its investment company taxable income (in brief, net
investment income and the excess of net short-term capital gain over net
long-term capital loss) for the taxable year. The Fund must also satisfy
certain other requirements of the Internal Revenue Code, some of which are
described below.  Distributions by the Fund made during the taxable year or,
under specified circumstances, within 12 months after the close of the
taxable year, will be considered distributions of income and gains for the
taxable year and will therefore count toward satisfaction of the
above-mentioned requirement.

      To qualify as a regulated investment company, the Fund must derive at
least 90% of its gross income from dividends, interest, certain payments with
respect to securities loans, gains from the sale or other disposition of
stock or securities or foreign currencies (to the extent such currency gains
are directly related to the regulated investment company's principal business
of investing in stock or securities) and certain other income.

      In addition to satisfying the requirements described above, the Fund
must satisfy an asset diversification test in order to qualify as a regulated
investment company.  Under that test, at the close of each quarter of the
Fund's taxable year, at least 50% of the value of the Fund's assets must
consist of cash and cash items (including receivables), U.S. government
securities, securities of other regulated investment companies, and
securities of other issuers. As to each of those issuers, the Fund must not
have invested more than 5% of the value of the Fund's total assets in
securities of each such issuer and the Fund must not hold more than 10% of
the outstanding voting securities of each such issuer. No more than 25% of
the value of its total assets may be invested in the securities of any one
issuer (other than U.S. government securities and securities of other
regulated investment companies), or in two or more issuers which the Fund
controls and which are engaged in the same or similar trades or businesses.
For purposes of this test, obligations issued or guaranteed by certain
agencies or instrumentalities of the U.S. government are treated as U.S.
government securities.

Excise Tax on Regulated Investment Companies. Under the Internal Revenue
Code, by December 31 each year, the Fund must distribute 98% of its taxable
investment income earned from January 1 through December 31 of that year and
98% of its capital gains realized in the period from November 1 of the prior
year through October 31 of the current year. If it does not, the Fund must
pay an excise tax on the amounts not distributed. It is presently anticipated
that the Fund will meet those requirements. To meet this requirement, in
certain circumstances the Fund might be required to liquidate portfolio
investments to make sufficient distributions to avoid excise tax liability.
However, the Board of Trustees and the Manager might determine in a
particular year that it would be in the best interests of shareholders for
the Fund not to make such distributions at the required levels and to pay the
excise tax on the undistributed amounts. That would reduce the amount of
income or capital gains available for distribution to shareholders.

Taxation   of  Fund   Distributions.   The   Fund   anticipates   distributing
substantially  all of its investment  company  taxable income for each taxable
year. Those  distributions  will be taxable to shareholders as ordinary income
and treated as dividends for federal income tax purposes.

      Special provisions of the Internal Revenue Code govern the eligibility
of the Fund's dividends for the dividends-received deduction for corporate
shareholders.  Long-term capital gains distributions are not eligible for the
deduction.  The amount of dividends paid by the Fund that may qualify for the
deduction is limited to the aggregate amount of qualifying dividends that the
Fund derives from portfolio investments that the Fund has held for a minimum
period, usually 46 days. A corporate shareholder will not be eligible for the
deduction on dividends paid on Fund shares held for 45 days or less.  To the
extent the Fund's dividends are derived from gross income from option
premiums, interest income or short-term gains from the sale of securities or
dividends from foreign corporations, those dividends will not qualify for the
deduction.

      The Fund may either retain or distribute to shareholders its net
capital gain for each taxable year.  The Fund currently intends to distribute
any such amounts.  If net long term capital gains are distributed and
designated as a capital gain distribution, it will be taxable to shareholders
as a long-term capital gain and will be properly identified in reports sent
to shareholders in January of each year. Such treatment will apply no matter
how long the shareholder has held his or her shares or whether that gain was
recognized by the Fund before the shareholder acquired his or her shares.

      If the Fund elects to retain its net capital gain, the Fund will be
subject to tax on it at the 35% corporate tax rate. If the Fund elects to
retain its net capital gain, the Fund will provide to shareholders of record
on the last day of its taxable year information regarding their pro rata
share of the gain and tax paid. As a result, each shareholder will be
required to report his or her pro rata share of such gain on their tax return
as long-term capital gain, will receive a refundable tax credit for his/her
pro rata share of tax paid by the Fund on the gain, and will increase the tax
basis for his/her shares by an amount equal to the deemed distribution less
the tax credit.

      Investment income that may be received by the Fund from sources within
foreign countries may be subject to foreign taxes withheld at the source.
The United States has entered into tax treaties with many foreign countries
which entitle the Fund to a reduced rate of, or exemption from, taxes on such
income.

      Distributions by the Fund that do not constitute ordinary income
dividends or capital gain distributions will be treated as a return of
capital to the extent of the shareholder's tax basis in their shares. Any
excess will be treated as gain from the sale of those shares, as discussed
below. Shareholders will be advised annually as to the U.S. federal income
tax consequences of distributions made (or deemed made) during the year. If
prior distributions made by the Fund must be re-characterized as a
non-taxable return of capital at the end of the fiscal year as a result of
the effect of the Fund's investment policies, they will be identified as such
in notices sent to shareholders.

      Distributions by the Fund will be treated in the manner described above
regardless of whether the distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund).  Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares
received, determined as of the reinvestment date.

      The Fund will be required in certain cases to withhold 30% (29% for
payments after December 31, 2003) of ordinary income dividends, capital gains
distributions and the proceeds of the redemption of shares, paid to any
shareholder (1) who has failed to provide a correct taxpayer identification
                                            -------
number or to properly certify that number when required, (2) who is subject
to backup withholding for failure to report the receipt of interest or
dividend income properly, or (3) who has failed to certify to the Fund that
the shareholder is not subject to backup withholding or is an "exempt
recipient" (such as a corporation). All income and any tax withheld by the
Fund is remitted by the Fund to the U.S. Treasury and is identified in
reports mailed to shareholders in January of each year.

Tax  Effects of  Redemptions  of Shares.  If a  shareholder  redeems  all or a
portion of his/her shares,  the  shareholder  will recognize a gain or loss on
the redeemed shares in an amount equal to the difference  between the proceeds
of the  redeemed  shares  and the  shareholder's  adjusted  tax  basis  in the
shares.  All or a  portion  of any  loss  recognized  in  that  manner  may be
disallowed  if the  shareholder  purchases  other shares of the Fund within 30
days before or after the redemption.

      In general, any gain or loss arising from the redemption of shares of
the Fund will be considered capital gain or loss, if the shares were held as
a capital asset. It will be long-term capital gain or loss if the shares were
held for more than one year.  However, any capital loss arising from the
redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of the amount of capital gain dividends
received on those shares. Special holding period rules under the Internal
Revenue Code apply in this case to determine the holding period of shares and
there are limits on the deductibility of capital losses in any year.

Foreign Shareholders.  Under U.S. tax law, taxation of a shareholder who is a
foreign person (to include, but not limited to, a nonresident alien
individual, a foreign trust, a foreign estate, a foreign corporation, or a
foreign partnership) primarily depends on whether the foreign person's income
from the Fund is effectively connected with the conduct of a U.S. trade or
business. Typically, ordinary income dividends paid from a mutual fund are
not considered "effectively connected" income.

      Ordinary income dividends that are paid by the Fund (and are deemed not
"effectively connected income") to foreign persons will be subject to a U.S.
tax withheld by the Fund at a rate of 30%, provided the Fund obtains a
properly completed and signed Certificate of Foreign Status. The tax rate may
be reduced if the foreign person's country of residence has a tax treaty with
the U.S. allowing for a reduced tax rate on ordinary income dividends paid by
the Fund. All income and any tax withheld by the Fund is remitted by the Fund
to the U.S. Treasury and is identified in reports mailed to shareholders in
March of each year.

      If the ordinary income dividends from the Fund are effectively
                                                     ---
connected with the conduct of a U.S. trade or business, then the foreign
person may claim an exemption from the U.S. tax described above provided the
Fund obtains a properly completed and signed Certificate of Foreign Status.

      If the foreign person fails to provide a certification of his/her
foreign status, the Fund will be required to withhold U.S. tax at a rate of
30% (29% for payments after December 31, 2003) on ordinary income dividends,
capital gains distributions and the proceeds of the redemption of shares,
paid to any foreign person. All income and any tax withheld (in this
situation) by the Fund is remitted by the Fund to the U.S. Treasury and is
identified in reports mailed to shareholders in January of each year.

      The tax consequences to foreign persons entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign shareholders are urged to consult their own tax advisors or the U.S.
Internal Revenue Service with respect to the particular tax consequences to
them of an investment in the Fund, including the applicability of the U.S.
withholding taxes described above.

Dividend Reinvestment in Another Fund.  Shareholders of the Fund may elect to
reinvest all dividends and/or capital gains distributions in shares of the
same class of any of the other Oppenheimer funds listed above. Reinvestment
will be made without sales charge at the net asset value per share in effect
at the close of business on the payable date of the dividend or distribution.
To elect this option, the shareholder must notify the Transfer Agent in
writing and must have an existing account in the fund selected for
reinvestment. Otherwise the shareholder first must obtain a prospectus for
that fund and an application from the Distributor to establish an account.
Dividends and/or distributions from shares of certain other Oppenheimer funds
(other than Oppenheimer Cash Reserves) may be invested in shares of this Fund
on the same basis.

Additional Information About the Fund

The Distributor.  The Fund's shares are sold through dealers, brokers and
other financial institutions that have a sales agreement with
OppenheimerFunds Distributor, Inc., a subsidiary of the Manager that acts as
the Fund's Distributor.  The Distributor also distributes shares of the other
Oppenheimer funds and is sub-distributor for funds managed by a subsidiary of
the Manager.

The Transfer Agent. OppenheimerFunds Services, the Fund's Transfer Agent, is
a division of the Manager. It is responsible for maintaining the Fund's
shareholder registry and shareholder accounting records, and for paying
dividends and distributions to shareholders. It also handles shareholder
servicing and administrative functions. It serves as the Transfer Agent for
an annual per account fee. It also acts as shareholder servicing agent for
the other Oppenheimer funds. Shareholders should direct inquiries about their
accounts to the Transfer Agent at the address and toll-free numbers shown on
the back cover.

The Custodian. Citibank, N.A. is the custodian of the Fund's assets. The
custodian's responsibilities include safeguarding and controlling the Fund's
portfolio securities and handling the delivery of such securities to and from
the Fund.  It is the practice of the Fund to deal with the custodian in a
manner uninfluenced by any banking relationship the custodian may have with
the Manager and its affiliates.  The Fund's cash balances with the custodian
in excess of $100,000 are not protected by federal deposit insurance.  Those
uninsured balances at times may be substantial.

Independent Auditors. KPMG LLP are the independent auditors of the Fund. They
audit the Fund's financial statements and perform other related audit
services.  They also act as auditors for certain other funds advised by the
Manager and its affiliates.



INDEPENDENT AUDITORS' REPORT

The Board of Trustees and Shareholders of
Oppenheimer MidCap Fund:

 We have audited the accompanying statement of assets and liabilities of
 Oppenheimer  MidCap  Fund,  including  the  statement of  investments,  as of
October
 31, 2002,  and the related  statement of operations  for the year then ended,
the
 statements of changes in net assets for each of the two years in the period
 then ended, and the financial highlights for each of the three years in the
 period then ended.  These financial  statements and financial  highlights are
the
 responsibility of the Fund's management. Our responsibility is to express an
 opinion on these financial statements and financial highlights based on our
 audits. The financial highlights for the year ended October 31, 1999, and the
 11-month period ended October 31, 1998, were audited by other auditors whose
 report dated November 19, 1999, expresses an unqualified opinion on this
 information.

    We conducted our audits in accordance with auditing standards generally
 accepted in the United States of America. Those standards require that we
plan
 and perform the audit to obtain reasonable assurance about whether the
 financial statements and financial highlights are free of material
 misstatement. An audit includes examining, on a test basis, evidence
supporting
 the amounts and disclosures in the financial statements. Our procedures
 included confirmation of securities owned as of October 31, 2002, by
 correspondence with the custodian and brokers or by other appropriate
auditing
 procedures where replies from brokers were not received. An audit also
includes
 assessing the accounting principles used and significant estimates made by
 management, as well as evaluating the overall financial statement
presentation.
 We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements and financial highlights referred
 to above present fairly, in all material respects, the financial position of
 Oppenheimer MidCap Fund as of October 31, 2002, the results of its operations
 for the year then ended, the changes in its net assets for each of the two
 years in the period then ended, and the financial highlights for each of the
 three  years  in  the  period  then  ended,  in  conformity  with  accounting
principles
 generally accepted in the United States of America.

/s/KPMG LLP
 KPMG LLP

 Denver, Colorado
 November 21, 2002

STATEMENT OF INVESTMENTS  October 31, 2002

                                                                    Market
Value
                                                          Shares      See
Note 1
- --------------------------------------------------------------------------------
 Common Stocks--87.8%
- --------------------------------------------------------------------------------
 Consumer Discretionary--17.3%
- --------------------------------------------------------------------------------
 Auto Components--1.0%
 CarMax, Inc. 1                                          460,000    $
7,539,400
- --------------------------------------------------------------------------------
 Hotels, Restaurants & Leisure--4.6%
 Outback Steakhouse,
 Inc. 1                                                  500,000
17,025,000
- --------------------------------------------------------------------------------
 Wendy's International,
 Inc.                                                    545,000
17,265,600

- ------------

34,290,600

- --------------------------------------------------------------------------------
 Multiline Retail--3.1%
 Family Dollar
 Stores, Inc.                                            750,000
23,092,500
- --------------------------------------------------------------------------------
 Specialty Retail--6.3%
 Bed Bath &
 Beyond, Inc. 1                                        1,320,000
46,807,200
- --------------------------------------------------------------------------------
 Textiles & Apparel--2.3%
 Coach, Inc. 1                                           558,000
16,600,500
- --------------------------------------------------------------------------------
 Consumer Staples--0.8%
- --------------------------------------------------------------------------------
 Food & Drug Retailing--0.8%
 Whole Foods
 Market, Inc. 1                                          135,000
6,298,290
- --------------------------------------------------------------------------------
 Financials--14.0%
- --------------------------------------------------------------------------------
 Banks--3.1%
 Commerce
 Bancorp, Inc.                                           508,000
23,322,280
- --------------------------------------------------------------------------------
 Insurance--10.9%
 AMBAC Financial
 Group, Inc.                                             395,000
24,411,000
- --------------------------------------------------------------------------------
 MBIA, Inc.                                              802,500
35,029,125
- --------------------------------------------------------------------------------
 Radian Group, Inc.                                      611,100
21,553,497

- ------------

80,993,622

- --------------------------------------------------------------------------------
 Health Care--34.2%
- --------------------------------------------------------------------------------
 Biotechnology--10.0%
 Gilead Sciences, Inc. 1                               1,388,000
48,219,120
- --------------------------------------------------------------------------------
 IDEC Pharmaceuticals
 Corp. 1                                                 566,000
26,047,320

- ------------

74,266,440

- --------------------------------------------------------------------------------
 Health Care Equipment & Supplies--12.8%
 Biomet, Inc.                                            118,500
3,491,010
- --------------------------------------------------------------------------------
 Cytyc Corp. 1                                           233,000
2,437,180
- --------------------------------------------------------------------------------
 Stryker Corp.                                           576,000
36,345,600


                                                                    Market
Value
                                                          Shares      See
Note 1
- --------------------------------------------------------------------------------
 Health Care Equipment & Supplies Continued
 Varian Medical
 Systems, Inc. 1                                       1,095,000
$52,800,900

- ------------

95,074,690

- --------------------------------------------------------------------------------
 Health Care Providers & Services--11.4%
 AmerisourceBergen
 Corp.                                                   585,000
41,622,750
- --------------------------------------------------------------------------------
 Lincare
 Holdings, Inc. 1                                      1,268,400
43,214,388

- ------------

84,837,138

- --------------------------------------------------------------------------------
 Industrials--10.6%
- --------------------------------------------------------------------------------
 Aerospace & Defense--2.3%
 Alliant Techsystems,
 Inc. 1                                                  288,900
17,377,335
- --------------------------------------------------------------------------------
 Commercial Services & Supplies--4.6%
 Concord EFS, Inc. 1                                   1,859,200
26,549,376
- --------------------------------------------------------------------------------
 Weight Watchers
 International, Inc. 1                                   154,200
7,301,370

- ------------

33,850,746

- --------------------------------------------------------------------------------
 Machinery--3.7%
 SPX Corp. 1                                             650,000
27,306,500
- --------------------------------------------------------------------------------
 Information Technology--10.9%
- --------------------------------------------------------------------------------
 Communications Equipment--3.4%
 Brocade
 Communications
 Systems, Inc. 1                                         750,000
5,152,500
- --------------------------------------------------------------------------------
 UTStarcom, Inc. 1                                     1,187,900
20,289,332

- ------------

25,441,832

- --------------------------------------------------------------------------------
 Internet Software & Services--1.9%
 Hotels.com, Cl. A 1                                     220,800
13,766,880
- --------------------------------------------------------------------------------
 Semiconductor Equipment & Products--3.0%
 Marvell Technology
 Group Ltd. 1                                            665,000
10,779,650
- --------------------------------------------------------------------------------
 QLogic Corp. 1                                          325,000
11,313,250

- ------------

22,092,900

- --------------------------------------------------------------------------------
 Software--2.6%
 Cerner Corp. 1                                          542,100
19,304,181

- ------------
 Total Common Stocks
 (Cost $693,387,041)
652,263,034


STATEMENT OF INVESTMENTS  Continued


                                                                    Market
Value
                                                          Shares      See
Note 1
- --------------------------------------------------------------------------------
 Preferred Stocks--0.0%
 Axsun Technologies,
 Inc., Cv., Series C 1,2,3                               771,208    $
194,344
- --------------------------------------------------------------------------------
 Centerpoint
 Broadband
 Technologies, Inc.,
 Cv., Series D 1,2                                       556,586
- --
- --------------------------------------------------------------------------------
 fusionOne, Inc.,
 8% Non-Cum. Cv.,
 Series D 1,2,3                                        1,675,894
39,719
- --------------------------------------------------------------------------------
 ITF Optical
 Technologies, Inc.,
 Cv., Series A 1,2,3                                     200,000
173,000

- ------------
 Total Preferred Stocks
 (Cost $29,100,099)
407,063

                                                      Principal    Market
Value
                                                         Amount      See Note
1
- -------------------------------------------------------------------------------
 Short-Term Notes--12.4%
 Federal Home Loan Bank,
 1.65%, 11/1/02
 (Cost $91,900,000)                                 $91,900,000    $
91,900,000

- -------------------------------------------------------------------------------
 Total Investments,
 at Value
 (Cost $814,387,140)                                      100.2%
744,570,097
- -------------------------------------------------------------------------------
 Liabilities
 in Excess of
 Other Assets                                              (0.2)
(1,575,163)

- ---------------------
 Net Assets                                               100.0%
$742,994,934

=====================

Footnotes to Statement of Investments

1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended October 31,
2002.
The aggregate fair value of securities of affiliated companies held by the
Fund
as of October 31, 2002, amounts to $407,063. Transactions during the period in
which the issuer was an affiliate are as follows:


                                                 Shares      Gross
Gross            Shares    Unrealized
                                       October 31, 2001  Additions
Reductions  October 31, 2002  Depreciation
- --------------------------------------------------------------------------------------------------------------

Stocks and/or Warrants
Axsun Technologies, Inc., Cv., Series C         771,208         --
- --           771,208    $8,805,653
fusionOne, Inc., 8% Non-Cum. Cv., Series D    1,675,894         --
- --         1,675,894     9,060,386
ITF Optical Technologies, Inc., Cv., Series A   200,000         --
- --           200,000     4,827,000


See accompanying Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES  October 31, 2002


- -------------------------------------------------------------------------------
 Assets
 Investments, at value--see accompanying statement:
 Unaffiliated companies (cost $791,287,038)
$744,163,034
 Affiliated companies (cost $23,100,102)
407,063

- ------------

744,570,097
- -------------------------------------------------------------------------------
 Cash
633,163
- -------------------------------------------------------------------------------
 Receivables and other assets:
 Shares of beneficial interest sold
504,590
 Interest and dividends
32,700
 Other
3,514

- ------------
 Total assets
745,744,064

- -------------------------------------------------------------------------------
 Liabilities
 Payables and other liabilities:
 Shares of beneficial interest redeemed
1,316,489
 Transfer and shareholder servicing agent fees
570,941
 Shareholder reports
520,419
 Distribution and service plan fees
176,144
 Trustees' compensation
149,414
 Other
15,723

- ------------
 Total liabilities
2,749,130

- -------------------------------------------------------------------------------
 Net Assets
$742,994,934

============

- -------------------------------------------------------------------------------
 Composition of Net Assets
 Paid-in capital
$1,964,895,912
- -------------------------------------------------------------------------------
 Accumulated net investment loss
(148,073)
- -------------------------------------------------------------------------------
 Accumulated net realized loss on investments and foreign
   currency transactions
(1,151,935,862)
- -------------------------------------------------------------------------------
 Net unrealized depreciation on investments
(69,817,043)

- ------------
 Net Assets
$742,994,934

============

STATEMENT OF ASSETS AND LIABILITIES  Continued


- --------------------------------------------------------------------------------
 Net Asset Value Per Share
 Class A Shares:
 Net asset value and redemption price per share (based on net
 assets of $351,983,074 and 30,807,812 shares of beneficial
 interest outstanding)
$11.43
 Maximum offering price per share (net asset value plus sales
 charge of 5.75% of offering price)
$12.13
- --------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on net
 assets of $291,397,281 and 26,436,653 shares of beneficial
 interest outstanding)
$11.02
- --------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on net
 assets of $83,350,524 and 7,564,308 shares of beneficial
 interest outstanding)
$11.02
- --------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on net
 assets of $8,845,527 and 776,988 shares of beneficial interest
 outstanding)
$11.38
- --------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share
 (based on net assets of $7,418,528 and 633,293 shares of
 beneficial interest outstanding)
$11.71

 See accompanying Notes to Financial Statements.


STATEMENT OF OPERATIONS  For the Year Ended October 31, 2002


- --------------------------------------------------------------------------------
 Investment Income
 Interest                                                         $
2,549,328
- --------------------------------------------------------------------------------
 Dividends
1,509,526

- --------------
 Total investment income
4,058,854

- --------------------------------------------------------------------------------
 Expenses
 Management fees
6,671,502
- --------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A
1,057,057
 Class B
3,863,200
 Class C
1,125,590
 Class N
32,790
- --------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A
2,855,278
 Class B
2,489,606
 Class C
721,127
 Class N
35,437
- --------------------------------------------------------------------------------
 Shareholder reports
1,388,561
- --------------------------------------------------------------------------------
 Trustees' compensation
47,863
- --------------------------------------------------------------------------------
 Custodian fees and expenses
7,039
- --------------------------------------------------------------------------------
 Other
1,458

- --------------
 Total expenses
20,296,508
 Less reduction to custodian expenses
(1,322)
 Less voluntary waiver of transfer and shareholder servicing
 agent fees -- Classes A, B, C and N
(2,045,003)

- --------------
 Net expenses
18,250,183

- --------------------------------------------------------------------------------
 Net Investment Loss
(14,191,329)

- --------------------------------------------------------------------------------
 Realized and Unrealized Gain (Loss)
 Net realized gain (loss) on:
 Investments
(235,633,991)
 Foreign currency transactions
377,802

- --------------
 Net realized loss
(235,256,189)
- --------------------------------------------------------------------------------
 Net change in unrealized appreciation on investments
31,615,304

- --------------
 Net realized and unrealized loss
(203,640,885)

- --------------------------------------------------------------------------------
 Net Decrease in Net Assets Resulting from Operations
$(217,832,214)

==============


 See accompanying Notes to Financial Statements.

STATEMENTS OF CHANGES IN NET ASSETS

 Year Ended October 31,
2002               2001
- ----------------------------------------------------------------------------------------------------

 Operations
 Net investment loss                                               $
(14,191,329)      $ (7,086,697)
- ----------------------------------------------------------------------------------------------------
 Net realized loss
(235,256,189)      (765,345,545)
- ----------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation)
31,615,304       (463,263,091)

- ----------------------------------
 Net decrease in net assets resulting from operations
(217,832,214)    (1,235,695,333)

- ----------------------------------------------------------------------------------------------------
 Beneficial Interest Transactions
 Net increase (decrease) in net assets resulting from
 beneficial interest transactions:
 Class A
(79,503,847)        72,996,958
 Class B
(59,860,957)        59,856,987
 Class C
(19,236,764)        22,021,277
 Class N
8,462,388          2,566,730
 Class Y
4,409,028          6,333,492

- ----------------------------------------------------------------------------------------------------
 Net Assets
 Total decrease
(363,562,366)    (1,071,919,889)
- ----------------------------------------------------------------------------------------------------
 Beginning of period
1,106,557,300      2,178,477,189

- ----------------------------------
 End of period [including accumulated net
 investment losses of $148,073 and $130,348, respectively]
$742,994,934     $1,106,557,300

==================================

 See accompanying Notes to Financial Statements.


 Class Y     Year Ended October 31                        2002
2001        2000       1999      1998 1
- ---------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.69
$30.86      $20.07     $10.88      $10.00
- ---------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                             (.08)
(.08)       (.02)      (.01)        .01
 Net realized and unrealized gain (loss)                 (2.90)
(16.09)      10.81       9.22         .87

- -------------------------------------------------------
 Total from investment operations                        (2.98)
(16.17)      10.79       9.21         .88
- ---------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --          --       (.02)         --
- ---------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.71
$14.69      $30.86     $20.07      $10.88

=======================================================
- ---------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (20.29)%
(52.40)%     53.76%     84.69%       8.80%

- ---------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)               $7,419
$4,759        $115         $2          $1
- ---------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                      $6,449
$2,720         $33         $2          $1
- ---------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                            (0.39)%
(0.12)%      0.60%     (0.06)%      0.05%
 Expenses                                                 0.83%
1.07%       0.74%      1.03%       1.09% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       0.83%
1.02%       0.74%      1.03%       1.09%
- ---------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%         23%        61%        117%


1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

- ----------------------
                              2006    $    2,792,572
                              2007         3,516,822
                              2008       142,020,390
                              2009       764,990,986
                              2010       237,892,098
                                      --------------
                              Total   $1,151,212,868
                                      ==============


 As of October 31, 2002, the components of distributable earnings on a tax
basis
 were as follows:

                 Accumulated net investment loss    $      (148,073)
                 Accumulated net realized loss       (1,151,935,862)
                 Net unrealized depreciation            (69,817,043)
                                                    ----------------
                 Total                              $(1,221,900,978)
                                                    ================

 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:



                                      Year Ended October 31,
2002              Year Ended October 31, 2001 1
                                    Shares
Amount                 Shares              Amount
- -------------------------------------------------------------------------------------------------------------

 Class A
 Sold                           10,246,014          $ 140,041,291
21,601,589       $ 431,618,994
 Redeemed                      (16,353,774)          (219,545,138)
(19,413,730)       (358,622,036)

- ------------------------------------------------------------------------------
 Net increase (decrease)        (6,107,760)
$(79,503,847)             2,187,859         $72,996,958

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class B
 Sold                            5,434,402          $  72,796,103
12,038,231       $ 240,307,506
 Redeemed                      (10,300,242)          (132,657,060)
(10,102,864)       (180,450,519)

- ------------------------------------------------------------------------------
 Net increase (decrease)        (4,865,840)         $
(59,860,957)             1,935,367       $  59,856,987

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class C
 Sold                            2,545,426          $
33,944,222              4,550,109       $  87,698,946
 Redeemed                       (4,128,477)           (53,180,986)
(3,716,188)        (65,677,669)

- ------------------------------------------------------------------------------
 Net increase (decrease)        (1,583,051)         $
(19,236,764)               833,921       $  22,021,277

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class N
 Sold                              900,502          $
11,916,305                167,066       $   2,704,211
 Redeemed                         (281,019)
(3,453,917)                (9,561)           (137,481)

- ------------------------------------------------------------------------------
 Net increase                      619,483          $
8,462,388                157,505       $   2,566,730

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class Y
 Sold                              505,761          $
7,112,046                499,899       $   9,750,294
 Redeemed                         (196,412)
(2,703,018)              (179,670)         (3,416,802)

- ------------------------------------------------------------------------------
 Net increase                      309,349          $
4,409,028                320,229       $   6,333,492

==============================================================================


 1. For the year ended October 31, 2001, for Class A, B, C and Y shares and
for
 the period from March 1, 2001 (inception of offering) to October 31, 2001,
for
 Class N shares.

- --------------------------------------------------------------------------------
 3. Purchases and Sales of Securities

 The aggregate cost of purchases and proceeds from sales of securities, other
 than short-term obligations, for the year ended October 31, 2002, were
 $429,305,001 and $472,379,621, respectively.

 As of October 31, 2002, unrealized appreciation (depreciation) based on cost
of
 securities for federal income tax purposes of $815,110,135 was composed of:

                     Gross unrealized appreciation  $  74,529,012
                     Gross unrealized depreciation   (145,069,050)
                                                    --------------
                     Net unrealized depreciation    $ (70,540,038)
                                                    ==============


 The compensation paid to (or retained by) the Distributor from the sale of
 shares or on the redemption of shares is shown in the table below for the
 period indicated.



                     Aggregate           Class A       Concessions
Concessions       Concessions       Concessions
                     Front-End         Front-End        on Class A      on
Class B        on Class C        on Class N
                 Sales Charges     Sales Charges            Shares
Shares            Shares            Shares
                    on Class A       Retained by       Advanced by
Advanced by       Advanced by       Advanced by
 Year Ended             Shares       Distributor     Distributor 1
Distributor 1     Distributor 1     Distributor 1
- ----------------------------------------------------------------------------------------------------------------------

 October 31, 2002   $1,724,680          $534,240          $141,003
$2,277,844          $265,000           $76,769


 1. The Distributor advances concession payments to dealers for certain sales
of
 Class A shares and for sales of Class B, Class C and Class N shares from its
 own resources at the time of sale.
                            Class A          Class B            Class
C                 Class N
                         Contingent       Contingent
Contingent              Contingent
                           Deferred         Deferred
Deferred                Deferred
                      Sales Charges    Sales Charges      Sales
Charges           Sales Charges
                        Retained by      Retained by        Retained
by             Retained by
 Year Ended             Distributor      Distributor
Distributor             Distributor
- -----------------------------------------------------------------------------------------------

 October 31, 2002           $19,229       $1,380,533
$33,503         $17,023



Distributor's

Distributor's                 Aggregate

Aggregate              Unreimbursed

Unreimbursed             Expenses as %
                        Total Payments     Amount Retained
Expenses             of Net Assets
                            Under Plan      by Distributor          Under
Plan                  of Class
- ---------------------------------------------------------------------------------------------------------

 Class B Plan               $3,863,200          $3,108,386
$18,327,906                      6.29%
 Class C Plan                1,125,590             316,558
3,097,912                      3.72
 Class N Plan                   32,790              30,509
216,093                      2.44


Valuation as of          Unrealized
 Security                     Acquisition Dates             Cost
Oct. 31, 2002        Depreciation
- -----------------------------------------------------------------------------------------------------------

 Stocks and/or Warrants
 Axsun Technologies, Inc.,
 Cv., Series C                         12/13/00
$8,999,997               $194,344          $8,805,653
- -----------------------------------------------------------------------------------------------------------
 Centerpoint Broadband
 Technologies, Inc., Cv., Series D     10/23/00
5,999,997                     --           5,999,997
- -----------------------------------------------------------------------------------------------------------
 fusionOne, Inc., 8% Non-Cum.
 Cv., Series D                           9/6/01
9,100,105                 39,719           9,060,386
- -----------------------------------------------------------------------------------------------------------
 ITF Optical Technologies, Inc.,
 Cv., Series A                           4/7/00
5,000,000                173,000           4,827,000

                                  Appendix A

                           Industry Classifications
                           ------------------------

Aerospace & Defense                Household Durables
Air Freight & Couriers             Household Products
Airlines                           Industrial Conglomerates
Auto Components                    Insurance
Automobiles                        Internet & Catalog Retail
Banks                              Internet Software & Services
Beverages                          Information Technology Consulting &
                                   Services
Biotechnology                      Leisure Equipment & Products
Building Products                  Machinery
Chemicals                          Marine
Commercial Services & Supplies     Media
Communications Equipment           Metals & Mining
Computers & Peripherals            Multiline Retail
Construction & Engineering         Multi-Utilities
Construction Materials             Office Electronics
Containers & Packaging             Oil & Gas
Distributors                       Paper & Forest Products
Diversified Financials             Personal Products
Diversified Telecommunication      Pharmaceuticals
Services
Electric Utilities                 Real Estate
Electrical Equipment               Road & Rail
Electronic Equipment & Instruments Semiconductor Equipment & Products
Energy Equipment & Services        Software
Food & Drug Retailing              Specialty Retail
Food Products                      Textiles & Apparel
Gas Utilities                      Tobacco
Health Care Equipment & Supplies   Trading Companies & Distributors
Health Care Providers & Services   Transportation Infrastructure
Hotels Restaurants & Leisure       Water Utilities
                                   Wireless Telecommunication Services

                                  Appendix B

OppenheimerFunds Special Sales Charge Arrangements and Waivers
- --------------------------------------------------------------

In certain cases, the initial sales charge that applies to purchases of Class
A shares1 of the Oppenheimer funds or the contingent deferred sales charge
that may apply to Class A, Class B or Class C shares may be waived.2  That is
because of the economies of sales efforts realized by OppenheimerFunds
Distributor, Inc., (referred to in this document as the "Distributor"), or by
dealers or other financial institutions that offer those shares to certain
classes of investors.

Not all waivers apply to all funds. For example, waivers relating to
Retirement Plans do not apply to Oppenheimer municipal funds, because shares
of those funds are not available for purchase by or on behalf of retirement
plans. Other waivers apply only to shareholders of certain funds.

For the purposes of some of the waivers described below and in the Prospectus
and Statement of Additional Information of the applicable Oppenheimer funds,
the term "Retirement Plan" refers to the following types of plans:
         1) plans qualified under Sections 401(a) or 401(k) of the Internal
            Revenue Code,
         2) non-qualified deferred compensation plans,
         3) employee benefit plans3
         4) Group Retirement Plans4
         5) 403(b)(7) custodial plan accounts
         6) Individual Retirement Accounts ("IRAs"), including traditional
            IRAs, Roth IRAs, SEP-IRAs, SARSEPs or SIMPLE plans

The interpretation of these provisions as to the applicability of a special
arrangement or waiver in a particular case is in the sole discretion of the
Distributor or the transfer agent (referred to in this document as the
"Transfer Agent") of the particular Oppenheimer fund. These waivers and
special arrangements may be amended or terminated at any time by a particular
fund, the Distributor, and/or OppenheimerFunds, Inc. (referred to in this
document as the "Manager").

Waivers that apply at the time shares are redeemed must be requested by the
shareholder and/or dealer in the redemption request.
I.     Applicability of Class A Contingent Deferred Sales Charges in Certain
                                       Cases
- ------------------------------------------------------------------------------

Purchases of Class A Shares of Oppenheimer Funds That Are Not Subject to
Initial Sales Charge but May Be Subject to the Class A Contingent Deferred
Sales Charge (unless a waiver applies).

      There is no initial sales charge on purchases of Class A shares of any
of the Oppenheimer funds in the cases listed below. However, these purchases
may be subject to the Class A contingent deferred sales charge if redeemed
within 18 months (24 months in the case of Oppenheimer Rochester National
Municipals and Rochester Fund Municipals) of the beginning of the calendar
month of their purchase, as described in the Prospectus (unless a waiver
described elsewhere in this Appendix applies to the redemption).
Additionally, on shares purchased under these waivers that are subject to the
Class A contingent deferred sales charge, the Distributor will pay the
applicable concession described in the Prospectus under "Class A Contingent
Deferred Sales Charge."5 This waiver provision applies to:
|_|   Purchases of Class A shares aggregating $1 million or more.
|_|   Purchases of Class A shares by a Retirement Plan that was permitted to
         purchase such shares at net asset value but subject to a contingent
         deferred sales charge prior to March 1, 2001. That included plans
         (other than IRA or 403(b)(7) Custodial Plans) that: 1) bought shares
         costing $500,000 or more, 2) had at the time of purchase 100 or more
         eligible employees or total plan assets of $500,000 or more, or 3)
         certified to the Distributor that it projects to have annual plan
         purchases of $200,000 or more.
|_|   Purchases by an OppenheimerFunds-sponsored Rollover IRA, if the
         purchases are made:
         1) through a broker, dealer, bank or registered investment adviser
            that has made special arrangements with the Distributor for those
            purchases, or
         2) by a direct rollover of a distribution from a qualified
            Retirement Plan if the administrator of that Plan has made
            special arrangements with the Distributor for those purchases.
|_|   Purchases of Class A shares by Retirement Plans that have any of the
         following record-keeping arrangements:
         1) The record keeping is performed by Merrill Lynch Pierce Fenner &
            Smith, Inc. ("Merrill Lynch") on a daily valuation basis for the
            Retirement Plan. On the date the plan sponsor signs the
            record-keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets invested in (a) mutual
            funds, other than those advised or managed by Merrill Lynch
            Investment Management, L.P. ("MLIM"), that are made available
            under a Service Agreement between Merrill Lynch and the mutual
            fund's principal underwriter or distributor, and  (b)  funds
            advised or managed by MLIM (the funds described in (a) and (b)
            are referred to as "Applicable Investments").
         2) The record keeping for the Retirement Plan is performed on a
            daily valuation basis by a record keeper whose services are
            provided under a contract or arrangement between the Retirement
            Plan and Merrill Lynch. On the date the plan sponsor signs the
            record keeping service agreement with Merrill Lynch, the Plan
            must have $3 million or more of its assets (excluding assets
            invested in money market funds) invested in Applicable
            Investments.
         3) The record keeping for a Retirement Plan is handled under a
            service agreement with Merrill Lynch and on the date the plan
            sponsor signs that agreement, the Plan has 500 or more eligible
            employees (as determined by the Merrill Lynch plan conversion
            manager).

II.            Waivers of Class A Sales Charges of Oppenheimer Funds
- ------------------------------------------------------------------------------

A. Waivers of Initial and Contingent Deferred Sales Charges for Certain
Purchasers.

Class A shares purchased by the following investors are not subject to any
Class A sales charges (and no concessions are paid by the Distributor on such
purchases):
|_|   The Manager or its affiliates.
|_|   Present or former officers, directors, trustees and employees (and
         their "immediate families") of the Fund, the Manager and its
         affiliates, and retirement plans established by them for their
         employees. The term "immediate family" refers to one's spouse,
         children, grandchildren, grandparents, parents, parents-in-law,
         brothers and sisters, sons- and daughters-in-law, a sibling's
         spouse, a spouse's siblings, aunts, uncles, nieces and nephews;
         relatives by virtue of a remarriage (step-children, step-parents,
         etc.) are included.
|_|   Registered management investment companies, or separate accounts of
         insurance companies having an agreement with the Manager or the
         Distributor for that purpose.
|_|   Dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans
         for their employees.
|_|   Employees and registered representatives (and their spouses) of dealers
         or brokers described above or financial institutions that have
         entered into sales arrangements with such dealers or brokers (and
         which are identified as such to the Distributor) or with the
         Distributor. The purchaser must certify to the Distributor at the
         time of purchase that the purchase is for the purchaser's own
         account (or for the benefit of such employee's spouse or minor
         children).
|_|   Dealers, brokers, banks or registered investment advisors that have
         entered into an agreement with the Distributor providing
         specifically for the use of shares of the Fund in particular
         investment products made available to their clients. Those clients
         may be charged a transaction fee by their dealer, broker, bank or
         advisor for the purchase or sale of Fund shares.
|_|   Investment advisors and financial planners who have entered into an
         agreement for this purpose with the Distributor and who charge an
         advisory, consulting or other fee for their services and buy shares
         for their own accounts or the accounts of their clients.
|_|   "Rabbi trusts" that buy shares for their own accounts, if the purchases
         are made through a broker or agent or other financial intermediary
         that has made special arrangements with the Distributor for those
         purchases.
|_|   Clients of investment advisors or financial planners (that have entered
         into an agreement for this purpose with the Distributor) who buy
         shares for their own accounts may also purchase shares without sales
         charge but only if their accounts are linked to a master account of
         their investment advisor or financial planner on the books and
         records of the broker, agent or financial intermediary with which
         the Distributor has made such special arrangements . Each of these
         investors may be charged a fee by the broker, agent or financial
         intermediary for purchasing shares.
|_|   Directors, trustees, officers or full-time employees of OpCap Advisors
         or its affiliates, their relatives or any trust, pension, profit
         sharing or other benefit plan which beneficially owns shares for
         those persons.
|_|   Accounts for which Oppenheimer Capital (or its successor) is the
         investment advisor (the Distributor must be advised of this
         arrangement) and persons who are directors or trustees of the
         company or trust which is the beneficial owner of such accounts.
|_|   A unit investment trust that has entered into an appropriate agreement
         with the Distributor.
|_|   Dealers, brokers, banks, or registered investment advisers that have
         entered into an agreement with the Distributor to sell shares to
         defined contribution employee retirement plans for which the dealer,
         broker or investment adviser provides administration services.
|_|   Retirement Plans and deferred compensation plans and trusts used to
         fund those plans (including, for example, plans qualified or created
         under sections 401(a), 401(k), 403(b) or 457 of the Internal Revenue
         Code), in each case if those purchases are made through a broker,
         agent or other financial intermediary that has made special
         arrangements with the Distributor for those purchases.
|_|   A TRAC-2000 401(k) plan (sponsored by the former Quest for Value
         Advisors) whose Class B or Class C shares of a Former Quest for
         Value Fund were exchanged for Class A shares of that Fund due to the
         termination of the Class B and Class C TRAC-2000 program on November
         24, 1995.
|_|   A qualified Retirement Plan that had agreed with the former Quest for
         Value Advisors to purchase shares of any of the Former Quest for
         Value Funds at net asset value, with such shares to be held through
         DCXchange, a sub-transfer agency mutual fund clearinghouse, if that
         arrangement was consummated and share purchases commenced by
         December 31, 1996.

B. Waivers of Initial and Contingent Deferred Sales Charges in Certain
Transactions.

Class A shares issued or purchased in the following transactions are not
subject to sales charges (and no concessions are paid by the Distributor on
such purchases):
|_|   Shares issued in plans of reorganization, such as mergers, asset
         acquisitions and exchange offers, to which the Fund is a party.
|_|   Shares purchased by the reinvestment of dividends or other
         distributions reinvested from the Fund or other Oppenheimer funds
         (other than Oppenheimer Cash Reserves) or unit investment trusts for
         which reinvestment arrangements have been made with the Distributor.
|_|   Shares purchased through a broker-dealer that has entered into a
         special agreement with the Distributor to allow the broker's
         customers to purchase and pay for shares of Oppenheimer funds using
         the proceeds of shares redeemed in the prior 30 days from a mutual
         fund (other than a fund managed by the Manager or any of its
         subsidiaries) on which an initial sales charge or contingent
         deferred sales charge was paid. This waiver also applies to shares
         purchased by exchange of shares of Oppenheimer Money Market Fund,
         Inc. that were purchased and paid for in this manner. This waiver
         must be requested when the purchase order is placed for shares of
         the Fund, and the Distributor may require evidence of qualification
         for this waiver.
|_|   Shares purchased with the proceeds of maturing principal units of any
         Qualified Unit Investment Liquid Trust Series.
|_|   Shares purchased by the reinvestment of loan repayments by a
         participant in a Retirement Plan for which the Manager or an
         affiliate acts as sponsor.

C. Waivers of the Class A Contingent Deferred Sales Charge for Certain
Redemptions.

The Class A contingent deferred sales charge is also waived if shares that
would otherwise be subject to the contingent deferred sales charge are
redeemed in the following cases:
|_|   To make Automatic Withdrawal Plan payments that are limited annually to
         no more than 12% of the account value adjusted annually.
|_|   Involuntary redemptions of shares by operation of law or involuntary
         redemptions of small accounts (please refer to "Shareholder Account
         Rules and Policies," in the applicable fund Prospectus).
|_|   For distributions from Retirement Plans, deferred compensation plans or
         other employee benefit plans for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established.
         2) To return excess contributions.
         3) To return contributions made due to a mistake of fact.
         4) Hardship withdrawals, as defined in the plan.6
         5) Under a Qualified Domestic Relations Order, as defined in the
            Internal Revenue Code, or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.
         9) Separation from service.7
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) if the plan has made special
            arrangements with the Distributor.
         11)      Plan termination or "in-service distributions," if the
            redemption proceeds are rolled over directly to an
            OppenheimerFunds-sponsored IRA.
|_|   For distributions from 401(k) plans sponsored by broker-dealers that
         have entered into a special agreement with the Distributor allowing
         this waiver.
|_|   For distributions from retirement plans that have $10 million or more
         in plan assets and that have entered into a special agreement with
         the Distributor.
|_|   For distributions from retirement plans which are part of a retirement
         plan product or platform offered by certain banks, broker-dealers,
         financial advisors, insurance companies or record keepers which have
         entered into a special agreement with the Distributor.
III.    Waivers of Class B, Class C and Class N Sales Charges of Oppenheimer
                                        Funds
- --------------------------------------------------------------------------------

The Class B, Class C and Class N contingent deferred sales charges will not
be applied to shares purchased in certain types of transactions or redeemed
in certain circumstances described below.

A. Waivers for Redemptions in Certain Cases.

The Class B, Class C and Class N contingent deferred sales charges will be
waived for redemptions of shares in the following cases:
|_|   Shares redeemed involuntarily, as described in "Shareholder Account
         Rules and Policies," in the applicable Prospectus.
|_|   Redemptions from accounts other than Retirement Plans following the
         death or disability of the last surviving shareholder. The death or
         disability must have occurred after the account was established, and
         for disability you must provide evidence of a determination of
         disability by the Social Security Administration.
|_|   The contingent deferred sales charges are generally not waived
         following the death or disability of a grantor or trustee for a
         trust account. The contingent deferred sales charges will only be
         waived in the limited case of the death of the trustee of a grantor
         trust or revocable living trust for which the trustee is also the
         sole beneficiary. The death or disability must have occurred after
         the account was established, and for disability you must provide
         evidence of a determination of disability by the Social Security
         Administration.
|_|   Distributions from accounts for which the broker-dealer of record has
         entered into a special agreement with the Distributor allowing this
         waiver.
|_|   Redemptions of Class B shares held by Retirement Plans whose records
         are maintained on a daily valuation basis by Merrill Lynch or an
         independent record keeper under a contract with Merrill Lynch.
|_|   Redemptions of Class C shares of Oppenheimer U.S. Government Trust from
         accounts of clients of financial institutions that have entered into
         a special arrangement with the Distributor for this purpose.
|_|   Redemptions requested in writing by a Retirement Plan sponsor of Class
         C shares of an Oppenheimer fund in amounts of $500,000 or more and
         made more than 12 months after the Retirement Plan's first purchase
         of Class C shares, if the redemption proceeds are invested in Class
         N shares of one or more Oppenheimer funds.
|_|   Distributions8 from Retirement Plans or other employee benefit plans
         for any of the following purposes:
         1) Following the death or disability (as defined in the Internal
            Revenue Code) of the participant or beneficiary. The death or
            disability must occur after the participant's account was
            established in an Oppenheimer fund.
         2) To return excess contributions made to a participant's account.
         3) To return contributions made due to a mistake of fact.
         4) To make hardship withdrawals, as defined in the plan.9
         5) To make distributions required under a Qualified Domestic
            Relations Order or, in the case of an IRA, a divorce or
            separation agreement described in Section 71(b) of the Internal
            Revenue Code.
         6) To meet the minimum distribution requirements of the Internal
            Revenue Code.
         7) To make "substantially equal periodic payments" as described in
            Section 72(t) of the Internal Revenue Code.
         8) For loans to participants or beneficiaries.10
         9) On account of the participant's separation from service.11
         10)      Participant-directed redemptions to purchase shares of a
            mutual fund (other than a fund managed by the Manager or a
            subsidiary of the Manager) offered as an investment option in a
            Retirement Plan if the plan has made special arrangements with
            the Distributor.
         11)      Distributions made on account of a plan termination or
            "in-service" distributions, if the redemption proceeds are rolled
            over directly to an OppenheimerFunds-sponsored IRA.
         12)      For distributions from a participant's account under an
            Automatic Withdrawal Plan after the participant reaches age 59 1/2,
            as long as the aggregate value of the distributions does not
            exceed 10% of the account's value, adjusted annually.
         13)      Redemptions of Class B shares under an Automatic Withdrawal
            Plan for an account other than a Retirement Plan, if the
            aggregate value of the redeemed shares does not exceed 10% of the
            account's value, adjusted annually.
         14)      For distributions from 401(k) plans sponsored by
            broker-dealers that have entered into a special arrangement with
            the Distributor allowing this waiver.
|_|   Redemptions of Class B shares or Class C shares under an Automatic
         Withdrawal Plan from an account other than a Retirement Plan if the
         aggregate value of the redeemed shares does not exceed 10% of the
         account's value annually.

B. Waivers for Shares Sold or Issued in Certain Transactions.

The contingent deferred sales charge is also waived on Class B and Class C
shares sold or issued in the following cases:
|_|   Shares sold to the Manager or its affiliates.
|_|   Shares sold to registered management investment companies or separate
         accounts of insurance companies having an agreement with the Manager
         or the Distributor for that purpose.
|_|   Shares issued in plans of reorganization to which the Fund is a party.
|_|   Shares sold to present or former officers, directors, trustees or
         employees (and their "immediate families" as defined above in
         Section I.A.) of the Fund, the Manager and its affiliates and
         retirement plans established by them for their employees.
IV.        Special Sales Charge Arrangements for Shareholders of Certain
      Oppenheimer Funds Who Were Shareholders of Former Quest for Value Funds
- ------------------------------------------------------------------------------

The initial and contingent deferred sales charge rates and waivers for Class
A, Class B and Class C shares described in the Prospectus or Statement of
Additional Information of the Oppenheimer funds are modified as described
below for certain persons who were shareholders of the former Quest for Value
Funds.  To be eligible, those persons must have been shareholders on November
24, 1995, when OppenheimerFunds, Inc. became the investment advisor to those
former Quest for Value Funds.  Those funds include:
   Oppenheimer Quest Value Fund, Inc.           Oppenheimer Small Cap Value
   Fund
   Oppenheimer Quest Balanced Value Fund        Oppenheimer Quest Global
   Value Fund, Inc.
   Oppenheimer Quest Opportunity Value Fund

      These arrangements also apply to shareholders of the following funds
when they merged (were reorganized) into various Oppenheimer funds on
November 24, 1995:

   Quest for Value U.S. Government Income Fund  Quest for Value New York
   Tax-Exempt Fund
   Quest for Value Investment Quality Income Fund     Quest for Value
   National Tax-Exempt Fund
   Quest for Value Global Income Fund     Quest for Value California
   Tax-Exempt Fund

      All of the funds listed above are referred to in this Appendix as the
"Former Quest for Value Funds."  The waivers of initial and contingent
deferred sales charges described in this Appendix apply to shares of an
Oppenheimer fund that are either:
|_|   acquired by such shareholder pursuant to an exchange of shares of an
         Oppenheimer fund that was one of the Former Quest for Value Funds,
         or
|_|   purchased by such shareholder by exchange of shares of another
         Oppenheimer fund that were acquired pursuant to the merger of any of
         the Former Quest for Value Funds into that other Oppenheimer fund on
         November 24, 1995.

A. Reductions or Waivers of Class A Sales Charges.

|X|   Reduced Class A Initial Sales Charge Rates for Certain Former Quest for
Value Funds Shareholders.

Purchases by Groups and Associations.  The following table sets forth the
initial sales charge rates for Class A shares purchased by members of
"Associations" formed for any purpose other than the purchase of securities.
The rates in the table apply if that Association purchased shares of any of
the Former Quest for Value Funds or received a proposal to purchase such
shares from OCC Distributors prior to November 24, 1995.

- --------------------------------------------------------------------------------
                      Initial Sales       Initial Sales Charge   Concession as
Number of Eligible    Charge as a % of    as a % of Net Amount   % of Offering
Employees or Members  Offering Price      Invested               Price
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
9 or Fewer                   2.50%                2.56%              2.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
At  least  10 but not        2.00%                2.04%              1.60%
more than 49
- --------------------------------------------------------------------------------

- ------------------------------------------------------------------------------
      For purchases by Associations having 50 or more eligible employees or
members, there is no initial sales charge on purchases of Class A shares, but
those shares are subject to the Class A contingent deferred sales charge
described in the applicable fund's Prospectus.


      Purchases made under this arrangement qualify for the lower of either
the sales charge rate in the table based on the number of members of an
Association, or the sales charge rate that applies under the Right of
Accumulation described in the applicable fund's Prospectus and Statement of
Additional Information. Individuals who qualify under this arrangement for
reduced sales charge rates as members of Associations also may purchase
shares for their individual or custodial accounts at these reduced sales
charge rates, upon request to the Distributor.

|X|   Waiver of Class A Sales Charges for Certain Shareholders.  Class A
shares purchased by the following investors are not subject to any Class A
initial or contingent deferred sales charges:
o     Shareholders who were shareholders of the AMA Family of Funds on
            February 28, 1991 and who acquired shares of any of the Former
            Quest for Value Funds by merger of a portfolio of the AMA Family
            of Funds.
o     Shareholders who acquired shares of any Former Quest for Value Fund by
            merger of any of the portfolios of the Unified Funds.

|X|   Waiver of Class A Contingent Deferred Sales Charge in Certain
Transactions.  The Class A contingent deferred sales charge will not apply to
redemptions of Class A shares purchased by the following investors who were
shareholders of any Former Quest for Value Fund:

      Investors who purchased Class A shares from a dealer that is or was not
permitted to receive a sales load or redemption fee imposed on a shareholder
with whom that dealer has a fiduciary relationship, under the Employee
Retirement Income Security Act of 1974 and regulations adopted under that law.

B. Class A, Class B and Class C Contingent Deferred Sales Charge Waivers.

|X|   Waivers for Redemptions of Shares Purchased Prior to March 6, 1995.  In
the following cases, the contingent deferred sales charge will be waived for
redemptions of Class A, Class B or Class C shares of an Oppenheimer fund. The
shares must have been acquired by the merger of a Former Quest for Value Fund
into the fund or by exchange from an Oppenheimer fund that was a Former Quest
for Value Fund or into which such fund merged. Those shares must have been
purchased prior to March 6, 1995 in connection with:
o     withdrawals under an automatic withdrawal plan holding only either
            Class B or Class C shares if the annual withdrawal does not
            exceed 10% of the initial value of the account value, adjusted
            annually, and
o     liquidation of a shareholder's account if the aggregate net asset value
            of shares held in the account is less than the required minimum
            value of such accounts.

|X|   Waivers for Redemptions of Shares Purchased on or After March 6, 1995
but Prior to November 24, 1995. In the following cases, the contingent
deferred sales charge will be waived for redemptions of Class A, Class B or
Class C shares of an Oppenheimer fund. The shares must have been acquired by
the merger of a Former Quest for Value Fund into the fund or by exchange from
an Oppenheimer fund that was a Former Quest For Value Fund or into which such
Former Quest for Value Fund merged. Those shares must have been purchased on
or after March 6, 1995, but prior to November 24, 1995:
o     redemptions following the death or disability of the shareholder(s) (as
            evidenced by a determination of total disability by the U.S.
            Social Security Administration);
o     withdrawals under an automatic withdrawal plan (but only for Class B or
            Class C shares) where the annual withdrawals do not exceed 10% of
            the initial value of the account value; adjusted annually, and
o     liquidation of a shareholder's account if the aggregate net asset value
            of shares held in the account is less than the required minimum
            account value.

      A shareholder's account will be credited with the amount of any
contingent deferred sales charge paid on the redemption of any Class A, Class
B or Class C shares of the Oppenheimer fund described in this section if the
proceeds are invested in the same Class of shares in that fund or another
Oppenheimer fund within 90 days after redemption.
V.         Special Sales Charge Arrangements for Shareholders of Certain
          Oppenheimer Funds Who Were Shareholders of Connecticut Mutual
                            Investment Accounts, Inc.
- ---------------------------------------------------------------------------

The initial and contingent deferred sale charge rates and waivers for Class A
and Class B shares described in the respective Prospectus (or this Appendix)
of the following Oppenheimer funds (each is referred to as a "Fund" in this
section):
   Oppenheimer U. S. Government Trust,
   Oppenheimer Bond Fund,
   Oppenheimer Value Fund and
   Oppenheimer Disciplined Allocation Fund
are modified as described below for those Fund shareholders who were
shareholders of the following funds (referred to as the "Former Connecticut
Mutual Funds") on March 1, 1996, when OppenheimerFunds, Inc. became the
investment adviser to the Former Connecticut Mutual Funds:
   Connecticut Mutual Liquid Account      Connecticut Mutual Total Return
   Account
   Connecticut Mutual Government Securities Account   CMIA LifeSpan Capital
   Appreciation Account
   Connecticut Mutual Income Account      CMIA LifeSpan Balanced Account
   Connecticut Mutual Growth Account      CMIA Diversified Income Account

A. Prior Class A CDSC and Class A Sales Charge Waivers.

|X|   Class A Contingent Deferred Sales Charge. Certain shareholders of a
Fund and the other Former Connecticut Mutual Funds are entitled to continue
to make additional purchases of Class A shares at net asset value without a
Class A initial sales charge, but subject to the Class A contingent deferred
sales charge that was in effect prior to March 18, 1996 (the "prior Class A
CDSC"). Under the prior Class A CDSC, if any of those shares are redeemed
within one year of purchase, they will be assessed a 1% contingent deferred
sales charge on an amount equal to the current market value or the original
purchase price of the shares sold, whichever is smaller (in such redemptions,
any shares not subject to the prior Class A CDSC will be redeemed first).

      Those shareholders who are eligible for the prior Class A CDSC are:
         1) persons whose purchases of Class A shares of a Fund and other
            Former Connecticut Mutual Funds were $500,000 prior to March 18,
            1996, as a result of direct purchases or purchases pursuant to
            the Fund's policies on Combined Purchases or Rights of
            Accumulation, who still hold those shares in that Fund or other
            Former Connecticut Mutual Funds, and
         2) persons whose intended purchases under a Statement of Intention
            entered into prior to March 18, 1996, with the former general
            distributor of the Former Connecticut Mutual Funds to purchase
            shares valued at $500,000 or more over a 13-month period entitled
            those persons to purchase shares at net asset value without being
            subject to the Class A initial sales charge

      Any of the Class A shares of a Fund and the other Former Connecticut
Mutual Funds that were purchased at net asset value prior to March 18, 1996,
remain subject to the prior Class A CDSC, or if any additional shares are
purchased by those shareholders at net asset value pursuant to this
arrangement they will be subject to the prior Class A CDSC.

|X|   Class A Sales Charge Waivers. Additional Class A shares of a Fund may
be purchased without a sales charge, by a person who was in one (or more) of
the categories below and acquired Class A shares prior to March 18, 1996, and
still holds Class A shares:
         1) any purchaser, provided the total initial amount invested in the
            Fund or any one or more of the Former Connecticut Mutual Funds
            totaled $500,000 or more, including investments made pursuant to
            the Combined Purchases, Statement of Intention and Rights of
            Accumulation features available at the time of the initial
            purchase and such investment is still held in one or more of the
            Former Connecticut Mutual Funds or a Fund into which such Fund
            merged;
         2) any participant in a qualified plan, provided that the total
            initial amount invested by the plan in the Fund or any one or
            more of the Former Connecticut Mutual Funds totaled $500,000 or
            more;
         3) Directors of the Fund or any one or more of the Former
            Connecticut Mutual Funds and members of their immediate families;
         4) employee benefit plans sponsored by Connecticut Mutual Financial
            Services, L.L.C. ("CMFS"), the prior distributor of the Former
            Connecticut Mutual Funds, and its affiliated companies;
         5) one or more members of a group of at least 1,000 persons (and
            persons who are retirees from such group) engaged in a common
            business, profession, civic or charitable endeavor or other
            activity, and the spouses and minor dependent children of such
            persons, pursuant to a marketing program between CMFS and such
            group; and
         6) an institution acting as a fiduciary on behalf of an individual
            or individuals, if such institution was directly compensated by
            the individual(s) for recommending the purchase of the shares of
            the Fund or any one or more of the Former Connecticut Mutual
            Funds, provided the institution had an agreement with CMFS.

      Purchases of Class A shares made pursuant to (1) and (2) above may be
subject to the Class A CDSC of the Former Connecticut Mutual Funds described
above.

      Additionally, Class A shares of a Fund may be purchased without a sales
charge by any holder of a variable annuity contract issued in New York State
by Connecticut Mutual Life Insurance Company through the Panorama Separate
Account which is beyond the applicable surrender charge period and which was
used to fund a qualified plan, if that holder exchanges the variable annuity
contract proceeds to buy Class A shares of the Fund.

B. Class A and Class B Contingent Deferred Sales Charge Waivers.

In addition to the waivers set forth in the Prospectus and in this Appendix,
above, the contingent deferred sales charge will be waived for redemptions of
Class A and Class B shares of a Fund and exchanges of Class A or Class B
shares of a Fund into Class A or Class B shares of a Former Connecticut
Mutual Fund provided that the Class A or Class B shares of the Fund to be
redeemed or exchanged were (i) acquired prior to March 18, 1996 or (ii) were
acquired by exchange from an Oppenheimer fund that was a Former Connecticut
Mutual Fund. Additionally, the shares of such Former Connecticut Mutual Fund
must have been purchased prior to March 18, 1996:
   1) by the estate of a deceased shareholder;
   2) upon the disability of a shareholder, as defined in Section 72(m)(7) of
      the Internal Revenue Code;
   3) for retirement distributions (or loans) to participants or
      beneficiaries from retirement plans qualified under Sections 401(a) or
      403(b)(7)of the Code, or from IRAs, deferred compensation plans created
      under Section 457 of the Code, or other employee benefit plans;
   4) as tax-free returns of excess contributions to such retirement or
      employee benefit plans;
   5) in whole or in part, in connection with shares sold to any state,
      county, or city, or any instrumentality, department, authority, or
      agency thereof, that is prohibited by applicable investment laws from
      paying a sales charge or concession in connection with the purchase of
      shares of any registered investment management company;
   6) in connection with the redemption of shares of the Fund due to a
      combination with another investment company by virtue of a merger,
      acquisition or similar reorganization transaction;
   7) in connection with the Fund's right to involuntarily redeem or
      liquidate the Fund;
   8) in connection with automatic redemptions of Class A shares and Class B
      shares in certain retirement plan accounts pursuant to an Automatic
      Withdrawal Plan but limited to no more than 12% of the original value
      annually; or
   9) as involuntary redemptions of shares by operation of law, or under
      procedures set forth in the Fund's Articles of Incorporation, or as
      adopted by the Board of Directors of the Fund.
VI.       Special Reduced Sales Charge for Former Shareholders of Advance
                                America Funds, Inc.
- ------------------------------------------------------------------------------

Shareholders of Oppenheimer Municipal Bond Fund, Oppenheimer U.S. Government
Trust, Oppenheimer Strategic Income Fund and Oppenheimer Capital Income Fund
who acquired (and still hold) shares of those funds as a result of the
reorganization of series of Advance America Funds, Inc. into those
Oppenheimer funds on October 18, 1991, and who held shares of Advance America
Funds, Inc. on March 30, 1990, may purchase Class A shares of those four
Oppenheimer funds at a maximum sales charge rate of 4.50%.
VII.     Sales Charge Waivers on Purchases of Class M Shares of Oppenheimer
                            Convertible Securities Fund
- ------------------------------------------------------------------------------

Oppenheimer Convertible Securities Fund (referred to as the "Fund" in this
section) may sell Class M shares at net asset value without any initial sales
charge to the classes of investors listed below who, prior to March 11, 1996,
owned shares of the Fund's then-existing Class A and were permitted to
purchase those shares at net asset value without sales charge:
|_|   the Manager and its affiliates,
|_|   present or former officers, directors, trustees and employees (and
         their "immediate families" as defined in the Fund's Statement of
         Additional Information) of the Fund, the Manager and its affiliates,
         and retirement plans established by them or the prior investment
         advisor of the Fund for their employees,
|_|   registered management investment companies or separate accounts of
         insurance companies that had an agreement with the Fund's prior
         investment advisor or distributor for that purpose,
|_|   dealers or brokers that have a sales agreement with the Distributor, if
         they purchase shares for their own accounts or for retirement plans
         for their employees,
|_|   employees and registered representatives (and their spouses) of dealers
         or brokers described in the preceding section or financial
         institutions that have entered into sales arrangements with those
         dealers or brokers (and whose identity is made known to the
         Distributor) or with the Distributor, but only if the purchaser
         certifies to the Distributor at the time of purchase that the
         purchaser meets these qualifications,
|_|   dealers, brokers, or registered investment advisors that had entered
         into an agreement with the Distributor or the prior distributor of
         the Fund specifically providing for the use of Class M shares of the
         Fund in specific investment products made available to their
         clients, and
      dealers, brokers or registered investment advisors that had entered
         into an agreement with the Distributor or prior distributor of the
         Fund's shares to sell shares to defined contribution employee
         retirement plans for which the dealer, broker, or investment advisor
         provides administrative services.

Oppenheimer MidCap Fund

Internet Website
   www.oppenheimerfunds.com
   ------------------------

Investment Advisor
     OppenheimerFunds, Inc.
     498 Seventh Avenue
     New York, New York 10018

Distributor
     OppenheimerFunds Distributor, Inc.
     498 Seventh Avenue
     New York, New York 10018

Transfer Agent
     OppenheimerFunds Services
     P.O. Box 5270
     Denver, Colorado 80217
     1.800.CALL.OPP (225.5677)

Custodian Bank
     Citibank, N.A.
     111 Wall Street
     New York, New York 10005

Independent Auditors
     KPMG LLP
     707 Seventeenth Street
     Denver, Colorado 80202

Legal Counsel
     Mayer, Brown, Rowe & Maw
     1675 Broadway
     New York, New York 10019
1234

PX745.001.1202

EX-99.15

INDEPENDENT AUDITORS' REPORT

- --------------------------------------------------------------------------------
 The Board of Trustees and Shareholders of
 Oppenheimer MidCap Fund:

We have  audited  the  accompanying  statement  of  assets  and  liabilities  of
Oppenheimer MidCap Fund,  including the statement of investments,  as of October
31, 2002, and the related  statement of operations for the year then ended,  the
statements of changes in net assets for each of the two years in the period then
ended,  and the financial  highlights  for each of the three years in the period
then  ended.  These  financial  statements  and  financial  highlights  are  the
responsibility  of the Fund's  management.  Our  responsibility is to express an
opinion on these  financial  statements  and financial  highlights  based on our
audits.  The financial  highlights  for the year ended October 31, 1999, and the
11-month  period ended October 31, 1998,  were audited by other  auditors  whose
report  dated  November  19,  1999,  expresses  an  unqualified  opinion on this
information.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial statements. Our procedures included confirmation of
securities  owned as of October 31, 2002, by  correspondence  with the custodian
and brokers or by other  appropriate  auditing  procedures  where  replies  from
brokers were not  received.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

     In our opinion,  the financial statements and financial highlights referred
to above present fairly,  in all material  respects,  the financial  position of
Oppenheimer  MidCap Fund as of October 31, 2002,  the results of its  operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended,  and the  financial  highlights  for each of the three
years in the  period  then  ended,  in  conformity  with  accounting  principles
generally accepted in the United States of America.

/s/KPMG LLP
 KPMG LLP

 Denver, Colorado
 November 21, 2002

October 31, 2002

       Oppenheimer
       MidCap Fund

Annual Report
Financial Statements

STATEMENT OF INVESTMENTS October 31, 2002

                                                                    Market
Value
                                                          Shares      See
Note 1
- --------------------------------------------------------------------------------
 Common Stocks--87.8%
- --------------------------------------------------------------------------------
 Consumer Discretionary--17.3%
- --------------------------------------------------------------------------------
 Auto Components--1.0%
 CarMax, Inc. 1                                          460,000    $
7,539,400
- --------------------------------------------------------------------------------
 Hotels, Restaurants & Leisure--4.6%
 Outback Steakhouse,
 Inc. 1                                                  500,000
17,025,000
- --------------------------------------------------------------------------------
 Wendy's International,
 Inc.                                                    545,000
17,265,600

- ------------

34,290,600

- --------------------------------------------------------------------------------
 Multiline Retail--3.1%
 Family Dollar
 Stores, Inc.                                            750,000
23,092,500
- --------------------------------------------------------------------------------
 Specialty Retail--6.3%
 Bed Bath &
 Beyond, Inc. 1                                        1,320,000
46,807,200
- --------------------------------------------------------------------------------
 Textiles & Apparel--2.3%
 Coach, Inc. 1                                           558,000
16,600,500
- --------------------------------------------------------------------------------
 Consumer Staples--0.8%
- --------------------------------------------------------------------------------
 Food & Drug Retailing--0.8%
 Whole Foods
 Market, Inc. 1                                          135,000
6,298,290
- --------------------------------------------------------------------------------
 Financials--14.0%
- --------------------------------------------------------------------------------
 Banks--3.1%
 Commerce
 Bancorp, Inc.                                           508,000
23,322,280
- --------------------------------------------------------------------------------
 Insurance--10.9%
 AMBAC Financial
 Group, Inc.                                             395,000
24,411,000
- --------------------------------------------------------------------------------
 MBIA, Inc.                                              802,500
35,029,125
- --------------------------------------------------------------------------------
 Radian Group, Inc.                                      611,100
21,553,497

- ------------

80,993,622

- --------------------------------------------------------------------------------
 Health Care--34.2%
- --------------------------------------------------------------------------------
 Biotechnology--10.0%
 Gilead Sciences, Inc. 1                               1,388,000
48,219,120
- --------------------------------------------------------------------------------
 IDEC Pharmaceuticals
 Corp. 1                                                 566,000
26,047,320

- ------------

74,266,440

- --------------------------------------------------------------------------------
 Health Care Equipment & Supplies--12.8%
 Biomet, Inc.                                            118,500
3,491,010
- --------------------------------------------------------------------------------
 Cytyc Corp. 1                                           233,000
2,437,180
- --------------------------------------------------------------------------------
 Stryker Corp.                                           576,000
36,345,600


                                                                    Market
Value
                                                          Shares      See
Note 1
- --------------------------------------------------------------------------------
 Health Care Equipment & Supplies Continued
 Varian Medical
 Systems, Inc. 1                                       1,095,000
$52,800,900

- ------------

95,074,690

- --------------------------------------------------------------------------------
 Health Care Providers & Services--11.4%
 AmerisourceBergen
 Corp.                                                   585,000
41,622,750
- --------------------------------------------------------------------------------
 Lincare
 Holdings, Inc. 1                                      1,268,400
43,214,388

- ------------

84,837,138

- --------------------------------------------------------------------------------
 Industrials--10.6%
- --------------------------------------------------------------------------------
 Aerospace & Defense--2.3%
 Alliant Techsystems,
 Inc. 1                                                  288,900
17,377,335
- --------------------------------------------------------------------------------
 Commercial Services & Supplies--4.6%
 Concord EFS, Inc. 1                                   1,859,200
26,549,376
- --------------------------------------------------------------------------------
 Weight Watchers
 International, Inc. 1                                   154,200
7,301,370

- ------------

33,850,746

- --------------------------------------------------------------------------------
 Machinery--3.7%
 SPX Corp. 1                                             650,000
27,306,500
- --------------------------------------------------------------------------------
 Information Technology--10.9%
- --------------------------------------------------------------------------------
 Communications Equipment--3.4%
 Brocade
 Communications
 Systems, Inc. 1                                         750,000
5,152,500
- --------------------------------------------------------------------------------
 UTStarcom, Inc. 1                                     1,187,900
20,289,332

- ------------

25,441,832

- --------------------------------------------------------------------------------
 Internet Software & Services--1.9%
 Hotels.com, Cl. A 1                                     220,800
13,766,880
- --------------------------------------------------------------------------------
 Semiconductor Equipment & Products--3.0%
 Marvell Technology
 Group Ltd. 1                                            665,000
10,779,650
- --------------------------------------------------------------------------------
 QLogic Corp. 1                                          325,000
11,313,250

- ------------

22,092,900

- --------------------------------------------------------------------------------
 Software--2.6%
 Cerner Corp. 1                                          542,100
19,304,181

- ------------
 Total Common Stocks
 (Cost $693,387,041)
652,263,034



13 | OPPENHEIMER MIDCAP FUND



STATEMENT OF INVESTMENTS  Continued


                                                                    Market
Value
                                                          Shares      See
Note 1
- --------------------------------------------------------------------------------
 Preferred Stocks--0.0%
 Axsun Technologies,
 Inc., Cv., Series C 1,2,3                               771,208    $
194,344
- --------------------------------------------------------------------------------
 Centerpoint
 Broadband
 Technologies, Inc.,
 Cv., Series D 1,2                                       556,586
- --
- --------------------------------------------------------------------------------
 fusionOne, Inc.,
 8% Non-Cum. Cv.,
 Series D 1,2,3                                        1,675,894
39,719
- --------------------------------------------------------------------------------
 ITF Optical
 Technologies, Inc.,
 Cv., Series A 1,2,3                                     200,000
173,000

- ------------
 Total Preferred Stocks
 (Cost $29,100,099)
407,063




                                                      Principal    Market
Value
                                                         Amount      See Note
1
- -------------------------------------------------------------------------------
 Short-Term Notes--12.4%
 Federal Home Loan Bank,
 1.65%, 11/1/02
 (Cost $91,900,000)                                 $91,900,000    $
91,900,000

- -------------------------------------------------------------------------------
 Total Investments,
 at Value
 (Cost $814,387,140)                                      100.2%
744,570,097
- -------------------------------------------------------------------------------
 Liabilities
 in Excess of
 Other Assets                                              (0.2)
(1,575,163)

- ---------------------
 Net Assets                                               100.0%
$742,994,934

=====================


Footnotes to Statement of Investments

1. Non-income producing security.
2. Identifies issues considered to be illiquid or restricted--See Note 5 of
Notes to Financial Statements.
3. Affiliated company. Represents ownership of at least 5% of the voting
securities of the issuer, and is or was an affiliate, as defined in the
Investment Company Act of 1940, at or during the period ended October 31,
2002.
The aggregate fair value of securities of affiliated companies held by the
Fund
as of October 31, 2002, amounts to $407,063. Transactions during the period in
which the issuer was an affiliate are as follows:



                                                 Shares      Gross
Gross            Shares    Unrealized
                                       October 31, 2001  Additions
Reductions  October 31, 2002  Depreciation
- --------------------------------------------------------------------------------------------------------------

Stocks and/or Warrants
Axsun Technologies, Inc., Cv., Series C         771,208         --
- --           771,208    $8,805,653
fusionOne, Inc., 8% Non-Cum. Cv., Series D    1,675,894         --
- --         1,675,894     9,060,386
ITF Optical Technologies, Inc., Cv., Series A   200,000         --
- --           200,000     4,827,000


See accompanying Notes to Financial Statements.

14 | OPPENHEIMER MIDCAP FUND



STATEMENT OF ASSETS AND LIABILITIES  October 31, 2002


- -------------------------------------------------------------------------------
 Assets
 Investments, at value--see accompanying statement:
 Unaffiliated companies (cost $791,287,038)
$744,163,034
 Affiliated companies (cost $23,100,102)
407,063

- ------------

744,570,097
- -------------------------------------------------------------------------------
 Cash
633,163
- -------------------------------------------------------------------------------
 Receivables and other assets:
 Shares of beneficial interest sold
504,590
 Interest and dividends
32,700
 Other
3,514

- ------------
 Total assets
745,744,064

- -------------------------------------------------------------------------------
 Liabilities
 Payables and other liabilities:
 Shares of beneficial interest redeemed
1,316,489
 Transfer and shareholder servicing agent fees
570,941
 Shareholder reports
520,419
 Distribution and service plan fees
176,144
 Trustees' compensation
149,414
 Other
15,723

- ------------
 Total liabilities
2,749,130

- -------------------------------------------------------------------------------
 Net Assets
$742,994,934

============

- -------------------------------------------------------------------------------
 Composition of Net Assets
 Paid-in capital
$1,964,895,912
- -------------------------------------------------------------------------------
 Accumulated net investment loss
(148,073)
- -------------------------------------------------------------------------------
 Accumulated net realized loss on investments and foreign
   currency transactions
(1,151,935,862)
- -------------------------------------------------------------------------------
 Net unrealized depreciation on investments
(69,817,043)

- ------------
 Net Assets
$742,994,934

============


15 | OPPENHEIMER MIDCAP FUND



STATEMENT OF ASSETS AND LIABILITIES  Continued


- --------------------------------------------------------------------------------
 Net Asset Value Per Share
 Class A Shares:
 Net asset value and redemption price per share (based on net
 assets of $351,983,074 and 30,807,812 shares of beneficial
 interest outstanding)
$11.43
 Maximum offering price per share (net asset value plus sales
 charge of 5.75% of offering price)
$12.13
- --------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on net
 assets of $291,397,281 and 26,436,653 shares of beneficial
 interest outstanding)
$11.02
- --------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on net
 assets of $83,350,524 and 7,564,308 shares of beneficial
 interest outstanding)
$11.02
- --------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable contingent
 deferred sales charge) and offering price per share (based on net
 assets of $8,845,527 and 776,988 shares of beneficial interest
 outstanding)
$11.38
- --------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price per share
 (based on net assets of $7,418,528 and 633,293 shares of
 beneficial interest outstanding)
$11.71

 See accompanying Notes to Financial Statements.


16 | OPPENHEIMER MIDCAP FUND



STATEMENT OF OPERATIONS  For the Year Ended October 31, 2002


- --------------------------------------------------------------------------------
 Investment Income
 Interest                                                         $
2,549,328
- --------------------------------------------------------------------------------
 Dividends
1,509,526

- --------------
 Total investment income
4,058,854

- --------------------------------------------------------------------------------
 Expenses
 Management fees
6,671,502
- --------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A
1,057,057
 Class B
3,863,200
 Class C
1,125,590
 Class N
32,790
- --------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A
2,855,278
 Class B
2,489,606
 Class C
721,127
 Class N
35,437
- --------------------------------------------------------------------------------
 Shareholder reports
1,388,561
- --------------------------------------------------------------------------------
 Trustees' compensation
47,863
- --------------------------------------------------------------------------------
 Custodian fees and expenses
7,039
- --------------------------------------------------------------------------------
 Other
1,458

- --------------
 Total expenses
20,296,508
 Less reduction to custodian expenses
(1,322)
 Less voluntary waiver of transfer and shareholder servicing
 agent fees -- Classes A, B, C and N
(2,045,003)

- --------------
 Net expenses
18,250,183

- --------------------------------------------------------------------------------
 Net Investment Loss
(14,191,329)

- --------------------------------------------------------------------------------
 Realized and Unrealized Gain (Loss)
 Net realized gain (loss) on:
 Investments
(235,633,991)
 Foreign currency transactions
377,802

- --------------
 Net realized loss
(235,256,189)
- --------------------------------------------------------------------------------
 Net change in unrealized appreciation on investments
31,615,304

- --------------
 Net realized and unrealized loss
(203,640,885)

- --------------------------------------------------------------------------------
 Net Decrease in Net Assets Resulting from Operations
$(217,832,214)

==============


 See accompanying Notes to Financial Statements.


17 | OPPENHEIMER MIDCAP FUND



STATEMENTS OF CHANGES IN NET ASSETS




 Year Ended October 31,
2002               2001
- ----------------------------------------------------------------------------------------------------


 Operations
 Net investment loss                                               $
(14,191,329)      $ (7,086,697)
- ----------------------------------------------------------------------------------------------------
 Net realized loss
(235,256,189)      (765,345,545)
- ----------------------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation)
31,615,304       (463,263,091)

- ----------------------------------
 Net decrease in net assets resulting from operations
(217,832,214)    (1,235,695,333)

- ----------------------------------------------------------------------------------------------------
 Beneficial Interest Transactions
 Net increase (decrease) in net assets resulting from
 beneficial interest transactions:
 Class A
(79,503,847)        72,996,958
 Class B
(59,860,957)        59,856,987
 Class C
(19,236,764)        22,021,277
 Class N
8,462,388          2,566,730
 Class Y
4,409,028          6,333,492

- ----------------------------------------------------------------------------------------------------
 Net Assets
 Total decrease
(363,562,366)    (1,071,919,889)
- ----------------------------------------------------------------------------------------------------
 Beginning of period
1,106,557,300      2,178,477,189

- ----------------------------------
 End of period [including accumulated net
 investment losses of $148,073 and $130,348, respectively]
$742,994,934     $1,106,557,300

==================================

See accompanying Notes to Financial Statements.


FINANCIAL HIGHLIGHTS




  Class A     Year Ended October 31                       2002
2001              2000           1999         1998 1
- ---------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.42
$30.41            $19.88         $10.83         $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                             (.13)
(.02)              .04           (.04)          (.02)
 Net realized and unrealized gain (loss)                 (2.86)
(15.97)            10.49           9.11            .85

- -------------------------------------------------------------------------
 Total from investment operations                        (2.99)
(15.99)            10.53           9.07            .83
- ---------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --                --           (.02)            --
- ---------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.43
$14.42            $30.41         $19.88         $10.83

=========================================================================

- ---------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (20.74)%
(52.58)%           52.97%         83.79%          8.30%

- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)             $351,983
$532,338        $1,055,967       $167,879        $14,607
- ---------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $460,797
$718,814          $728,168        $60,644         $7,185
- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                            (1.06)%
(0.09)%            0.28%         (0.49)%        (0.33)%
 Expenses                                                 1.68%
1.33%             1.16%          1.40%          1.59% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       1.47%
1.32%             1.16%          1.40%          1.59%
- ---------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%               23%            61%           117%

1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.


19 | OPPENHEIMER MIDCAP FUND



FINANCIAL HIGHLIGHTS  Continued




  Class B     Year Ended October 31                       2002
2001              2000           1999         1998 1
- ---------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.02
$29.79            $19.62         $10.77        $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                      (.30)
(.15)             (.07)          (.07)         (.05)
 Net realized and unrealized gain (loss)                 (2.70)
(15.62)            10.24           8.94           .82

- -------------------------------------------------------------------------
 Total from investment operations                        (3.00)
(15.77)            10.17           8.87           .77
- ---------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --                --           (.02)            --
- ---------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.02
$14.02            $29.79         $19.62         $10.77

=========================================================================

- ---------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (21.40)%
(52.94)%           51.83%         82.40%          7.70%

- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)             $291,397
$438,962          $874,830       $118,611         $7,654
- ---------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $385,917
$592,096          $594,390        $40,455         $3,521
- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                     (1.85)%
(0.84)%           (0.48)%        (1.25)%        (1.06)%
 Expenses                                                 2.48%
2.08%             1.91%          2.16%          2.35% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       2.27%
2.07%             1.91%          2.16%          2.35%
- ---------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%               23%            61%           117%





1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.


See accompanying Notes to Financial Statements.


20 | OPPENHEIMER MIDCAP FUND


  Class C     Year Ended October 31                       2002
2001              2000           1999         1998 1
- ---------------------------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.02
$29.78            $19.60         $10.76         $10.00
- ---------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                      (.30)
(.15)             (.07)          (.06)          (.05)
 Net realized and unrealized gain (loss)                 (2.70)
(15.61)            10.25           8.92            .81

- -------------------------------------------------------------------------
 Total from investment operations                        (3.00)
(15.76)            10.18           8.86            .76
- ---------------------------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --                --           (.02)            --
- ---------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.02
$14.02            $29.78         $19.60         $10.76

=========================================================================

- ---------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (21.40)%
(52.92)%           51.94%         82.38%          7.60%

- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)              $83,351
$128,230          $247,566        $26,482         $2,587
- ---------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $112,436
$170,129          $161,221         $9,066         $1,271
- ---------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                     (1.84)%
(0.85)%           (0.48)%        (1.26)%        (1.07)%
 Expenses                                                 2.47%
2.08%             1.91%          2.16%          2.35% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       2.26%
2.07%             1.91%          2.16%          2.35%
- ---------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%               23%            61%           117%




1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.


21 | OPPENHEIMER MIDCAP FUND



FINANCIAL HIGHLIGHTS  Continued




  Class N     Year Ended October 31
2002            2001 1
- ------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                                  $
14.40           $ 19.54
- ------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss
(.14)             (.05)
 Net realized and unrealized loss
(2.88)            (5.09)

- -------------------------
 Total from investment operations
(3.02)            (5.14)
- ------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain
- --                --
- ------------------------------------------------------------------------------------------------
 Net asset value, end of period
$11.38            $14.40

=========================

- ------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2
(20.97)%          (26.31)%

- ------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)
$8,846            $2,268
- ------------------------------------------------------------------------------------------------
 Average net assets (in thousands)
$6,576            $1,250
- ------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss
(1.28)%           (0.94)%
 Expenses
1.87%             1.73%
 Expenses, net of voluntary waiver of transfer agent
 fees and/or reduction to custodian expenses
1.66%             1.72%
- ------------------------------------------------------------------------------------------------
 Portfolio turnover rate
51%               84%




1. For the period from March 1, 2001 (inception of offering) to October 31,
2001.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.

See accompanying Notes to Financial Statements.


22 | OPPENHEIMER MIDCAP FUND

 Class Y     Year Ended October 31                        2002
2001        2000       1999      1998 1
- ---------------------------------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                   $14.69
$30.86      $20.07     $10.88      $10.00
- ---------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment income (loss)                             (.08)
(.08)       (.02)      (.01)        .01
 Net realized and unrealized gain (loss)                 (2.90)
(16.09)      10.81       9.22         .87

- -------------------------------------------------------
 Total from investment operations                        (2.98)
(16.17)      10.79       9.21         .88
- ---------------------------------------------------------------------------------------------------------------
 Dividends and/or distributions to shareholders:
 Distributions in excess of net realized gain               --
- --          --       (.02)         --
- ---------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                         $11.71
$14.69      $30.86     $20.07      $10.88

=======================================================

- ---------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                     (20.29)%
(52.40)%     53.76%     84.69%       8.80%

- ---------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)               $7,419
$4,759        $115         $2          $1
- ---------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                      $6,449
$2,720         $33         $2          $1
- ---------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment income (loss)                            (0.39)%
(0.12)%      0.60%     (0.06)%      0.05%
 Expenses                                                 0.83%
1.07%       0.74%      1.03%       1.09% 4
 Expenses, net of voluntary waiver of
 transfer agent fees and/or reduction to
 custodian expenses                                       0.83%
1.02%       0.74%      1.03%       1.09%
- ---------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                    51%
84%         23%        61%        117%




1. For the period from December 1, 1997 (inception of offering) to October 31,
1998.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
4. Expense ratio has been calculated without adjustment for the reduction to
custodian expenses.

See accompanying Notes to Financial Statements.


23 | OPPENHEIMER MIDCAP FUND



NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
 1. Significant Accounting Policies
 Oppenheimer MidCap Fund (the Fund) is registered under the Investment Company
 Act of 1940, as amended, as an open-end management investment company. The
 Fund's investment objective is to seek capital appreciation. The Fund's
 investment advisor is OppenheimerFunds, Inc. (the Manager).

    The Fund offers Class A, Class B, Class C, Class N and Class Y shares.
Class
 A shares are sold at their offering price, which is normally net asset value
 plus a front-end sales charge. Class B, Class C and Class N shares are sold
 without a front-end sales charge but may be subject to a contingent deferred
 sales charge (CDSC). Class N shares are sold only through retirement plans.
 Retirement plans that offer Class N shares may impose charges on those
 accounts. Class Y shares are sold to certain institutional investors without
 either a front-end sales charge or a CDSC. All classes of shares have
identical
 rights and voting privileges. Earnings, net assets and net asset value per
 share may differ by minor amounts due to each class having its own expenses
 directly attributable to that class. Classes A, B, C and N have separate
 distribution and/or service plans. No such plan has been adopted for Class Y
 shares. Class B shares will automatically convert to Class A shares six years
 after the date of purchase.

    The following is a summary of significant accounting policies consistently
followed by the Fund.

- --------------------------------------------------------------------------------
 Securities Valuation. Securities listed or traded on National Stock Exchanges
 or other domestic or foreign exchanges are valued based on the last sale
price
 of the security traded on that exchange prior to the time when the Fund's
 assets are valued. In the absence of a sale, the security is valued at the
last
 sale price on the prior trading day, if it is within the spread of the
closing
 bid and asked prices, and if not, at the closing bid price. Securities
 (including restricted securities) for which quotations are not readily
 available are valued primarily using dealer-supplied valuations, a portfolio
 pricing service authorized by the Board of Trustees, or at their fair value.
 Fair value is determined in good faith under consistently applied procedures
 under the supervision of the Board of Trustees. Short-term "money market
type"
 debt securities with remaining maturities of sixty days or less are valued at
 amortized cost (which approximates market value).

- --------------------------------------------------------------------------------
 Joint Repurchase Agreements. The Fund, along with other affiliated funds of
the
 Manager, may transfer uninvested cash balances into one or more joint
 repurchase agreement accounts. These balances are invested in one or more
 repurchase agreements, secured by U.S. government securities. Securities
 pledged as collateral for repurchase agreements are held by a custodian bank
 until the agreements mature. Each agreement requires that the market value of
 the collateral be sufficient to cover payments of interest and principal;
 however, in the event of default by the other party to the agreement,
retention
 of the collateral may be subject to legal proceedings.

- --------------------------------------------------------------------------------
 Allocation of Income, Expenses, Gains and Losses. Income, expenses (other
than
 those attributable to a specific class), gains and losses are allocated
daily
 to each class of shares


24 | OPPENHEIMER MIDCAP FUND



 based upon the relative proportion of net assets represented by such class.
 Operating expenses directly attributable to a specific class are charged
 against the operations of that class.
- --------------------------------------------------------------------------------
 Federal Taxes. The Fund intends to continue to comply with provisions of the
 Internal Revenue Code applicable to regulated investment companies and to
 distribute all of its taxable income, including any net realized gain on
 investments not offset by capital loss carryforwards, if any, to
shareholders.
 Therefore, no federal income or excise tax provision is required.

    During the fiscal year ended October 31, 2002, the Fund did not utilize
any
 capital loss carryforward.

 As of October 31, 2002, the Fund had available for federal income tax
purposes
 unused capital loss carryforwards as follows:

                              Expiring
                              ----------------------
                              2006    $    2,792,572
                              2007         3,516,822
                              2008       142,020,390
                              2009       764,990,986
                              2010       237,892,098
                                      --------------
                              Total   $1,151,212,868
                                      ==============

- --------------------------------------------------------------------------------
 Trustees' Compensation. The Fund has adopted a nonfunded retirement plan for
 the Fund's independent trustees. Benefits are based on years of service and
 fees paid to each trustee during the years of service. During the year ended
 October 31, 2002, the Fund's projected benefit obligations were increased by
 $21,596 and payments of $3,871 were made to retired trustees, resulting in an
 accumulated liability of $148,071 as of October 31, 2002.

    The Board of Trustees has adopted a deferred compensation plan for
 independent trustees that enables trustees to elect to defer receipt of all
or
 a portion of annual compensation they are entitled to receive from the Fund.
 Under the plan, the compensation deferred is invested for the Board of
Trustees
 in shares of one or more Oppenheimer funds selected by the trustee. The
amount
 paid to the Board of Trustees under the plan will be determined based upon
the
 performance of the selected funds. Deferral of trustees' fees under the plan
 will not affect the net assets of the Fund, and will not materially affect
the
 Fund's assets, liabilities or net investment income per share.

- --------------------------------------------------------------------------------
 Dividends and Distributions to Shareholders. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date.

- --------------------------------------------------------------------------------
 Classification of Dividends and Distributions to Shareholders. Net investment
 income (loss) and net realized gain (loss) may differ for financial statement
 and tax purposes. The character of dividends and distributions made during
the
 fiscal year from net investment income or net realized gains may differ from
 their ultimate characterization for federal income tax purposes. Also, due to
 timing of dividends and distributions, the

25 | OPPENHEIMER MIDCAP FUND



NOTES TO FINANCIAL STATEMENTS  Continued



- --------------------------------------------------------------------------------
 1. Significant Accounting Policies Continued
 fiscal year in which amounts are distributed may differ from the fiscal year
in
 which the income or net realized gain was recorded by the Fund.

    The Fund adjusts the classification of distributions to shareholders to
 reflect the differences between financial statement amounts and distributions
 determined in accordance with income tax regulations. Accordingly, during the
 year ended October 31, 2002, amounts have been reclassified to reflect a
 decrease in paid-in capital of $14,177,832, a decrease in accumulated net
 investment loss of $14,173,604, and a decrease in accumulated net realized
loss
 on investments of $4,228. Net assets of the Fund were unaffected by the
 reclassifications.

    No distributions were paid during the years ended October 31, 2002 and
 October 31, 2001.

 As of October 31, 2002, the components of distributable earnings on a tax
basis
 were as follows:

                 Accumulated net investment loss    $      (148,073)
                 Accumulated net realized loss       (1,151,935,862)
                 Net unrealized depreciation            (69,817,043)
                                                    ----------------
                 Total                              $(1,221,900,978)
                                                    ================

- --------------------------------------------------------------------------------
 Investment Income. Dividend income is recorded on the ex-dividend date or
upon
 ex-dividend notification in the case of certain foreign dividends where the
 ex-dividend date may have passed. Non-cash dividends included in dividend
 income, if any, are recorded at the fair market value of the securities
 received. Interest income, which includes accretion of discount and
 amortization of premium, is accrued as earned.

- --------------------------------------------------------------------------------
 Security Transactions. Security transactions are recorded on the trade date.
 Realized gains and losses on securities sold are determined on the basis of
 identified cost.

- --------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial statements and the reported amounts of income
and
 expenses during the reporting period. Actual results could differ from those
 estimates.

26 | OPPENHEIMER MIDCAP FUND



- --------------------------------------------------------------------------------
 2. Shares of Beneficial Interest

 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:



                                      Year Ended October 31,
2002              Year Ended October 31, 2001 1
                                    Shares
Amount                 Shares              Amount
- -------------------------------------------------------------------------------------------------------------

 Class A
 Sold                           10,246,014          $ 140,041,291
21,601,589       $ 431,618,994
 Redeemed                      (16,353,774)          (219,545,138)
(19,413,730)       (358,622,036)

- ------------------------------------------------------------------------------
 Net increase (decrease)        (6,107,760)
$(79,503,847)             2,187,859         $72,996,958

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class B
 Sold                            5,434,402          $  72,796,103
12,038,231       $ 240,307,506
 Redeemed                      (10,300,242)          (132,657,060)
(10,102,864)       (180,450,519)

- ------------------------------------------------------------------------------
 Net increase (decrease)        (4,865,840)         $ (59,860,957)
        1,935,367       $  59,856,987

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class C
 Sold                            2,545,426          $
33,944,222              4,550,109       $  87,698,946
 Redeemed                       (4,128,477)           (53,180,986)
(3,716,188)        (65,677,669)

- ------------------------------------------------------------------------------
 Net increase (decrease)        (1,583,051)         $
(19,236,764)               833,921       $  22,021,277

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class N
 Sold                              900,502          $
11,916,305                167,066       $   2,704,211
 Redeemed                         (281,019)
(3,453,917)                (9,561)           (137,481)

- ------------------------------------------------------------------------------
 Net increase                      619,483          $
8,462,388                157,505       $   2,566,730

==============================================================================

- -------------------------------------------------------------------------------------------------------------
 Class Y
 Sold                              505,761          $
7,112,046                499,899       $   9,750,294
 Redeemed                         (196,412)
(2,703,018)              (179,670)         (3,416,802)

- ------------------------------------------------------------------------------
 Net increase                      309,349          $
4,409,028                320,229       $   6,333,492

==============================================================================


 1. For the year ended October 31, 2001, for Class A, B, C and Y shares and
for
 the period from March 1, 2001 (inception of offering) to October 31, 2001,
for
 Class N shares.

- --------------------------------------------------------------------------------
 3. Purchases and Sales of Securities

 The aggregate cost of purchases and proceeds from sales of securities, other
 than short-term obligations, for the year ended October 31, 2002, were
 $429,305,001 and $472,379,621, respectively.

 As of October 31, 2002, unrealized appreciation (depreciation) based on cost
of
 securities for federal income tax purposes of $815,110,135 was composed of:

                     Gross unrealized appreciation  $  74,529,012
                     Gross unrealized depreciation   (145,069,050)
                                                    --------------
                     Net unrealized depreciation    $ (70,540,038)
                                                    ==============





27 | OPPENHEIMER MIDCAP FUND



NOTES TO financial statements  Continued



- --------------------------------------------------------------------------------
 3. Purchases and Sales of Securities Continued
 The difference between book-basis and tax-basis unrealized appreciation and
 depreciation, if applicable, is attributable primarily to the tax deferral of
 losses on wash sales, or return of capital dividends, and the realization for
 tax purposes of unrealized gain (loss) on certain futures contracts,
 investments in passive foreign investment companies, and forward foreign
 currency exchange contracts.

- --------------------------------------------------------------------------------
 4. Fees and Other Transactions with Affiliates
 Management Fees. Management fees paid to the Manager were in accordance with
 the investment advisory agreement with the Fund. Effective March 1, 2002 the
 agreement provides for an annual fee of 0.75% of the first $200 million of
 average annual net assets of the Fund; 0.72% of the next $200 million; 0.69%
of
 the next $200 million; 0.66% of the next $200 million; 0.60% of the next $700
 million; 0.58% of the next $1 billion and 0.56% of average annual net assets
in
 excess of $2.5 billion. Prior to March 1, 2002, the annual advisory fee rate
 was: 0.75% of the first $200 million of average annual net assets of the
Fund;
 0.72% of the next $200 million; 0.69% of the next $200 million; 0.66% of the
 next $200 million; and 0.60% of average annual net assets in excess of $800
 million.

- --------------------------------------------------------------------------------

 Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
 Manager, acts as the transfer and shareholder  servicing agent for the Fund.
 The Fund pays OFS a $19.75 per account fee.

    Additionally, Class Y shares are subject to minimum fees of $5,000 for
 assets of less than $10 million and $10,000 for assets of $10 million or
more.
 The Class Y shares are subject to the minimum fees in the event that the per
 account fee does not equal or exceed the applicable minimum fees. OFS may
 voluntarily waive the minimum fees.

    OFS has voluntarily agreed to limit transfer and shareholder servicing
agent
 fees up to an annual rate of 0.25% of average net assets of Class Y shares
and
 for all other classes, up to an annual rate of 0.35% of average net assets of
 each class. Beginning November 1, 2002, transfer agent fees for Class Y
shares
 are limited to 0.35% of the Fund's average daily net assets. This undertaking
 may be amended or withdrawn at any time.

- --------------------------------------------------------------------------------
 Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
 Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
 Distributor) acts as the Fund's principal underwriter in the continuous
public
 offering of the different classes of shares of the Fund.


28 | OPPENHEIMER MIDCAP FUND



 The compensation paid to (or retained by) the Distributor from the sale of
 shares or on the redemption of shares is shown in the table below for the
 period indicated.



                     Aggregate           Class A       Concessions
Concessions       Concessions       Concessions
                     Front-End         Front-End        on Class A      on
Class B        on Class C        on Class N
                 Sales Charges     Sales Charges            Shares
Shares            Shares            Shares
                    on Class A       Retained by       Advanced by
Advanced by       Advanced by       Advanced by
 Year Ended             Shares       Distributor     Distributor 1
Distributor 1     Distributor 1     Distributor 1
- ----------------------------------------------------------------------------------------------------------------------

 October 31, 2002   $1,724,680          $534,240          $141,003
$2,277,844          $265,000           $76,769


 1. The Distributor advances concession payments to dealers for certain sales
of
 Class A shares and for sales of Class B, Class C and Class N shares from its
 own resources at the time of sale.



                            Class A          Class B            Class
C                 Class N
                         Contingent       Contingent
Contingent              Contingent
                           Deferred         Deferred
Deferred                Deferred
                      Sales Charges    Sales Charges      Sales
Charges           Sales Charges
                        Retained by      Retained by        Retained
by             Retained by
 Year Ended             Distributor      Distributor
Distributor             Distributor
- -----------------------------------------------------------------------------------------------


 October 31, 2002           $19,229       $1,380,533
$33,503                 $17,023



- --------------------------------------------------------------------------------
 Service Plan for Class A Shares. The Fund has adopted a Service Plan for
Class
 A shares. It reimburses the Distributor for a portion of its costs incurred
for
 services provided to accounts that hold Class A shares. Reimbursement is made
 quarterly at an annual rate of up to 0.25% of the average annual net assets
of
 Class A shares of the Fund. For the year ended October 31, 2002, payments
under
 the Class A Plan totaled $1,057,057, all of which were paid by the
Distributor
 to recipients, and included $67,315 paid to an affiliate of the Manager. Any
 unreimbursed expenses the Distributor incurs with respect to Class A shares
in
 any fiscal year cannot be recovered in subsequent years.

- --------------------------------------------------------------------------------
 Distribution and Service Plans for Class B, Class C and Class N Shares. The
 Fund has adopted Distribution and Service Plans for Class B, Class C and
Class
 N shares. Under the plans, the Fund pays the Distributor an annual
asset-based
 sales charge of 0.75% per year on Class B shares and on Class C shares and
the
 Fund pays the Distributor an annual asset-based sales charge of 0.25% per
year
 on Class N shares. The Distributor also receives a service fee of 0.25% per
 year under each plan.

 Distribution fees paid to the Distributor for the year ended October 31,
2002,
 were as follows:




Distributor's

Distributor's                 Aggregate

Aggregate              Unreimbursed

Unreimbursed             Expenses as %
                        Total Payments     Amount Retained
Expenses             of Net Assets
                            Under Plan      by Distributor          Under
Plan                  of Class
- ---------------------------------------------------------------------------------------------------------

 Class B Plan               $3,863,200          $3,108,386
$18,327,906                      6.29%
 Class C Plan                1,125,590             316,558
3,097,912                      3.72
 Class N Plan                   32,790              30,509
216,093                      2.44




29 | OPPENHEIMER MIDCAP FUND



NOTES TO FINANCIAL STATEMENTS  Continued



- --------------------------------------------------------------------------------
 5. Illiquid or Restricted Securities
 As of October 31, 2002, investments in securities included issues that are
 illiquid or restricted. Restricted securities are often purchased in private
 placement transactions, are not registered under the Securities Act of 1933,
 may have contractual restrictions on resale, and are valued under methods
 approved by the Board of Trustees as reflecting fair value. A security may
also
 be considered illiquid if it lacks a readily available market or if its
 valuation has not changed for a certain period of time. The Fund intends to
 invest no more than 15% of its net assets (determined at the time of purchase
 and reviewed periodically) in illiquid or restricted securities. Certain
 restricted securities, eligible for resale to qualified institutional
 investors, are not subject to that limitation. The aggregate value of
illiquid
 or restricted securities subject to this limitation as of October 31, 2002
was
 $407,063, which represents 0.05% of the Fund's net assets, all of which is
 considered restricted. Information concerning restricted securities is as
 follows:




Valuation as of          Unrealized
 Security                     Acquisition Dates             Cost
Oct. 31, 2002        Depreciation
- -----------------------------------------------------------------------------------------------------------


 Stocks and/or Warrants
 Axsun Technologies, Inc.,
 Cv., Series C                         12/13/00
$8,999,997               $194,344          $8,805,653
- -----------------------------------------------------------------------------------------------------------
 Centerpoint Broadband
 Technologies, Inc., Cv., Series D     10/23/00
5,999,997                     --           5,999,997
- -----------------------------------------------------------------------------------------------------------
 fusionOne, Inc., 8% Non-Cum.
 Cv., Series D                           9/6/01
9,100,105                 39,719           9,060,386
- -----------------------------------------------------------------------------------------------------------
 ITF Optical Technologies, Inc.,
 Cv., Series A                           4/7/00
5,000,000                173,000           4,827,000

- --------------------------------------------------------------------------------
 6. Bank Borrowings
 The Fund may borrow from a bank for temporary or emergency purposes, provided
 asset coverage for borrowings exceeds 300%. The Fund has entered into an
 agreement which enables it to participate with other Oppenheimer funds in an
 unsecured line of credit with a bank, which permits borrowings up to $400
 million, collectively. Interest is charged to each fund, based on its
 borrowings, at a rate equal to the Federal Funds Rate plus 0.45%. Borrowings
 are payable within 30 days after such loan is executed. The Fund also pays a
 commitment fee equal to its pro rata share of the average unutilized amount
of
 the credit facility at a rate of 0.08% per annum.

    The Fund had no borrowings outstanding during the year ended or at October
 31, 2002.

INDEPENDENT AUDITORS' REPORT

- --------------------------------------------------------------------------------
 To the Board of Trustees and Shareholders of
 Oppenheimer Select Managers Gartmore Millennium Growth Fund II:

We have  audited  the  accompanying  statement  of  assets  and  liabilities  of
Oppenheimer  Select  Managers  Gartmore  Millennium  Growth Fund II,  which is a
series of Oppenheimer  Select Managers,  including the statement of investments,
as of November 30, 2002,  and the related  statement of operations  for the year
then ended, the statements of changes in net assets and the financial highlights
for the periods indicated.  These financial  statements and financial highlights
are the  responsibility  of the  Fund's  management.  Our  responsibility  is to
express an opinion on these financial  statements and financial highlights based
on our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 2002, by  correspondence  with the custodian
and brokers;  where replies were not received from brokers,  we performed  other
auditing procedures.  An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion,  the financial statements and financial highlights referred
to above present fairly,  in all material  respects,  the financial  position of
Oppenheimer  Select Managers  Gartmore  Millennium Growth Fund II as of November
30, 2002, the results of its operations for the year then ended,  the changes in
its net  assets and the  financial  highlights  for the  periods  indicated,  in
conformity with accounting principles generally accepted in the United States of
America.


 /s/ Deloitte & Touche LLP
 -------------------------
 Deloitte & Touche LLP

 Denver, Colorado
 December 20, 2002

STATEMENT OF INVESTMENTS

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Common Stocks--104.4%
- ----------------------------------------------------------------
 Consumer Discretionary--19.9%
- ----------------------------------------------------------------
 Auto Components--1.5%
 CarMax, Inc. 1                            1,913    $    37,686
- ----------------------------------------------------------------
 Gentex Corp. 1                              472         14,165
                                                    ------------
                                                         51,851

- ----------------------------------------------------------------
 Hotels, Restaurants & Leisure--3.4%
 CBRL Group, Inc.                            807         21,999
- ----------------------------------------------------------------
 Cheesecake Factory, Inc. (The) 1          1,021         36,409
- ----------------------------------------------------------------
 Darden Restaurants, Inc.                    938         20,289
- ----------------------------------------------------------------
 International Game Technology 1             310         23,901
- ----------------------------------------------------------------
 Yum! Brands, Inc. 1                         712         17,024
                                                    ------------
                                                        119,622

- ----------------------------------------------------------------
 Household Durables--1.4%
 Mohawk Industries, Inc. 1                   353         21,748
- ----------------------------------------------------------------
 Newell Rubbermaid, Inc.                     877         27,819
                                                    ------------
                                                         49,567

- ----------------------------------------------------------------
 Internet & Catalog Retail--2.0%
 Amazon.com, Inc. 1                        1,520         35,492
- ----------------------------------------------------------------
 eBay, Inc. 1                                510         35,149
                                                    ------------
                                                         70,641

- ----------------------------------------------------------------
 Media--2.0%
 Getty Images, Inc. 1                        859         25,658
- ----------------------------------------------------------------
 Insight Communications Co., Inc. 1        1,427         19,764
- ----------------------------------------------------------------
 Regal Entertainment Group                 1,212         27,391
                                                    ------------
                                                         72,813

- ----------------------------------------------------------------
 Multiline Retail--1.3%
 99 Cents Only Stores 1                      714         19,970
- ----------------------------------------------------------------
 Family Dollar Stores, Inc.                  920         27,131
                                                    ------------
                                                         47,101

- ----------------------------------------------------------------
 Specialty Retail--8.3%
 Advance Auto Parts, Inc. 1                  604         31,136
- ----------------------------------------------------------------
 AutoZone, Inc. 1                            280         22,876
- ----------------------------------------------------------------
 Bed Bath & Beyond, Inc. 1                 1,890         65,564
- ----------------------------------------------------------------
 GameStop Corp. 1                          3,487         64,858
- ----------------------------------------------------------------
 Guitar Center, Inc. 1                     1,190         23,753
- ----------------------------------------------------------------
 Rent-A-Center, Inc. 1                       309         15,354
- ----------------------------------------------------------------
 Tiffany & Co.                               657         18,646
- ----------------------------------------------------------------
 TJX Cos., Inc. (The)                        874         17,104
- ----------------------------------------------------------------
 Tractor Supply Co. 1                        448         19,926
- ----------------------------------------------------------------
 Williams-Sonoma, Inc. 1                     683         17,990
                                                    ------------
                                                        297,207

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Consumer Staples--3.2%
- ----------------------------------------------------------------
 Beverages--1.3%
 Constellation Brands, Inc., Cl. A 1         920    $    21,638
- ----------------------------------------------------------------
 Pepsi Bottling Group, Inc. (The)            827         23,752
                                                    ------------
                                                         45,390

- ----------------------------------------------------------------
 Food & Drug Retailing--0.8%
 Whole Foods Market, Inc. 1                  557         29,604
- ----------------------------------------------------------------
 Food Products--1.1%
 Wrigley, William Jr. Co.                    720         38,729
- ----------------------------------------------------------------
 Energy--4.0%
- ----------------------------------------------------------------
 Energy Equipment & Services--2.3%
 Nabors Industries Ltd. 1                    580         20,532
- ----------------------------------------------------------------
 Pride International, Inc. 1               2,160         30,197
- ----------------------------------------------------------------
 Smith International, Inc. 1                 936         31,824
                                                    ------------
                                                         82,553

- ----------------------------------------------------------------
 Oil & Gas--1.7%
 Burlington Resources, Inc.                  596         25,104
- ----------------------------------------------------------------
 Noble Energy, Inc.                          947         35,048
                                                    ------------
                                                         60,152

- ----------------------------------------------------------------
 Financials--7.7%
- ----------------------------------------------------------------
 Banks--2.3%
 Charter One Financial, Inc.                 755         22,726
- ----------------------------------------------------------------
 Investors Financial Services Corp.          577         20,183
- ----------------------------------------------------------------
 Synovus Financial Corp.                   1,840         38,327
                                                    ------------
                                                         81,236

- ----------------------------------------------------------------
 Diversified Financials--3.3%
 Federated Investors, Inc., Cl. B            679         18,367
- ----------------------------------------------------------------
 Moody's Corp.                               589         25,928
- ----------------------------------------------------------------
 Portfolio Recovery Associates, Inc. 1     2,283         40,158
- ----------------------------------------------------------------
 SLM Corp.                                   337         32,935
                                                    ------------
                                                        117,388

- ----------------------------------------------------------------
 Insurance--1.4%
 AMBAC Financial Group, Inc.                 806         50,383
- ----------------------------------------------------------------
 Real Estate--0.7%
 Host Marriott Corp. 1                     2,767         25,318
- ----------------------------------------------------------------
 Health Care--23.8%
- ----------------------------------------------------------------
 Biotechnology--3.1%
 Biogen, Inc. 1                              510         22,573
- ----------------------------------------------------------------
 Gilead Sciences, Inc. 1                     715         28,185
- ----------------------------------------------------------------
 IDEC Pharmaceuticals Corp. 1                610         20,069
- ----------------------------------------------------------------
 Medimmune, Inc. 1                         1,120         29,546
- ----------------------------------------------------------------
 Millennium Pharmaceuticals, Inc. 1          920          9,209
                                                    ------------
                                                        109,582

6 OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Health Care Equipment & Supplies--6.9%
 Biomet, Inc.                              1,530    $    42,075
- ----------------------------------------------------------------
 Boston Scientific Corp. 1                   602         25,284
- ----------------------------------------------------------------
 Dentsply International, Inc.                786         26,370
- ----------------------------------------------------------------
 ResMed, Inc. 1                            1,127         36,526
- ----------------------------------------------------------------
 St. Jude Medical, Inc. 1                  1,100         38,302
- ----------------------------------------------------------------
 Stryker Corp.                               506         31,296
- ----------------------------------------------------------------
 Varian Medical Systems, Inc. 1              572         26,707
- ----------------------------------------------------------------
 Zimmer Holdings, Inc. 1                     540         20,326
                                                    ------------
                                                        246,886

- ----------------------------------------------------------------
 Health Care Providers & Services--11.2%
 Advisory Board Co. (The) 1                  546         16,926
- ----------------------------------------------------------------
 AmerisourceBergen Corp.                     250         14,505
- ----------------------------------------------------------------
 Anthem, Inc. 1                              303         17,953
- ----------------------------------------------------------------
 Caremark Rx, Inc. 1                         920         16,247
- ----------------------------------------------------------------
 Community Health Systems, Inc.            1,486         30,537
- ----------------------------------------------------------------
 Express Scripts, Inc. 1                     564         28,544
- ----------------------------------------------------------------
 First Health Group Corp. 1                  716         17,084
- ----------------------------------------------------------------
 Health Management Assn., Inc., Cl. A      1,084         19,002
- ----------------------------------------------------------------
 ICON plc, Sponsored ADR 1                 1,757         40,938
- ----------------------------------------------------------------
 Laboratory Corp. of America Holdings 1      596         14,304
- ----------------------------------------------------------------
 McKesson Corp.                              648         16,796
- ----------------------------------------------------------------
 Medical Staffing Network
 Holdings, Inc. 1                          1,033         16,993
- ----------------------------------------------------------------
 Pharmaceutical Product
 Development, Inc. 1                       1,020         30,549
- ----------------------------------------------------------------
 Priority Healthcare Corp., Cl. B 1        1,377         30,322
- ----------------------------------------------------------------
 Schein (Henry), Inc. 1                      334         14,215
- ----------------------------------------------------------------
 Triad Hospitals, Inc. 1                     884         26,653
- ----------------------------------------------------------------
 Universal Health Services, Inc., Cl. B 1    410         18,347
- ----------------------------------------------------------------
 WellPoint Health Networks, Inc. 1           447         29,426
                                                    ------------
                                                        399,341

- ----------------------------------------------------------------
 Pharmaceuticals--2.6%
 Allergan, Inc.                              550         32,334
- ----------------------------------------------------------------
 Barr Laboratories, Inc. 1                   161         10,631
- ----------------------------------------------------------------
 IVAX Corp. 1                              1,037         14,010
- ----------------------------------------------------------------
 Medicis Pharmaceutical Corp., Cl. A 1       391         18,084
- ----------------------------------------------------------------
 Watson Pharmaceuticals, Inc. 1              610         18,294
                                                    ------------
                                                         93,353

- ----------------------------------------------------------------
 Industrials--15.7%
- ----------------------------------------------------------------
 Aerospace & Defense--0.4%
 InVision Technologies, Inc. 1               510         14,755
- ----------------------------------------------------------------
 Airlines--1.0%
 JetBlue Airways Corp. 1                     988         36,576
- ----------------------------------------------------------------
 Building Products--1.0%
 Masco Corp.                               1,784         35,983

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Commercial Services & Supplies--11.0%
 Administaff, Inc. 1                       2,287    $    15,552
- ----------------------------------------------------------------
 Apollo Group, Inc., Cl. A 1                 775         31,969
- ----------------------------------------------------------------
 Automatic Data Processing, Inc.             400         17,388
- ----------------------------------------------------------------
 BISYS Group, Inc. (The) 1                   604         12,249
- ----------------------------------------------------------------
 Career Education Corp. 1                    323         12,568
- ----------------------------------------------------------------
 CheckFree Corp. 1                         1,120         21,941
- ----------------------------------------------------------------
 ChoicePoint, Inc. 1                       1,046         39,309
- ----------------------------------------------------------------
 Cintas Corp.                                510         25,740
- ----------------------------------------------------------------
 Corporate Executive Board Co. 1             503         16,599
- ----------------------------------------------------------------
 First Data Corp.                            510         17,666
- ----------------------------------------------------------------
 Fiserv, Inc. 1                            1,330         45,114
- ----------------------------------------------------------------
 H&R Block, Inc.                           1,001         38,368
- ----------------------------------------------------------------
 Iron Mountain, Inc. 1                       883         29,218
- ----------------------------------------------------------------
 Stericycle, Inc. 1                          978         32,586
- ----------------------------------------------------------------
 Weight Watchers International, Inc. 1       762         34,480
                                                    ------------
                                                        390,747

- ----------------------------------------------------------------
 Electrical Equipment--0.5%
 AU Optronics Corp., ADR 1                 2,400         16,464
- ----------------------------------------------------------------
 Machinery--1.5%
 Danaher Corp.                               410         25,764
- ----------------------------------------------------------------
 SureBeam Corp., Cl. A 1                   5,310         28,621
                                                    ------------
                                                         54,385

- ----------------------------------------------------------------
 Trading Companies & Distributors--0.3%
 Fastenal Co.                                310         11,076
- ----------------------------------------------------------------
 Information Technology--27.7%
- ----------------------------------------------------------------
 Communications Equipment--3.3%
 3Com Corp. 1                              3,600         18,540
- ----------------------------------------------------------------
 Avaya, Inc. 1                             6,900         20,010
- ----------------------------------------------------------------
 CommScope, Inc. 1                         1,000          9,000
- ----------------------------------------------------------------
 Comverse Technology, Inc. 1               1,300         15,756
- ----------------------------------------------------------------
 JDS Uniphase Corp. 1                      2,700          9,207
- ----------------------------------------------------------------
 Sycamore Networks, Inc. 1                 5,600         17,360
- ----------------------------------------------------------------
 Tellabs, Inc. 1                           3,000         26,610
                                                    ------------
                                                        116,483

- ----------------------------------------------------------------
 Computers & Peripherals--3.9%
 ATI Technologies, Inc. 1                  4,600         37,122
- ----------------------------------------------------------------
 Dell Computer Corp. 1                       720         20,592
- ----------------------------------------------------------------
 Lexmark International, Inc., Cl. A 1        200         13,228
- ----------------------------------------------------------------
 Pinnacle Systems, Inc. 1                  1,600         22,608
- ----------------------------------------------------------------
 SanDisk Corp. 1                           1,200         33,300
- ----------------------------------------------------------------
 Sigma Designs, Inc. 1                     2,600         10,501
                                                    ------------
                                                        137,351

7 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENT OF INVESTMENTS  Continued

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Electronic Equipment & Instruments--3.2%
 Fisher Scientific International, Inc. 1   1,140     $   34,155
- ----------------------------------------------------------------
 PerkinElmer, Inc.                         3,600         30,816
- ----------------------------------------------------------------
 ScanSource, Inc. 1                          356         25,988
- ----------------------------------------------------------------
 Waters Corp. 1                              904         24,227
                                                    ------------
                                                        115,186

- ----------------------------------------------------------------
 Internet Software & Services--1.0%
 Ameritrade Holding Corp. 1                3,300         16,995
- ----------------------------------------------------------------
 Yahoo!, Inc. 1                            1,100         20,097
                                                    ------------
                                                         37,092

- ----------------------------------------------------------------
 IT Consulting & Services--1.7%
 Anteon International Corp. 1                720         16,812
- ----------------------------------------------------------------
 MPS Group, Inc. 1                         2,660         15,960
- ----------------------------------------------------------------
 Unisys Corp. 1                            2,500         28,000
                                                    ------------
                                                         60,772

- ----------------------------------------------------------------
 Office Electronics--0.6%
 Zebra Technologies Corp., Cl. A 1           351         22,541
- ----------------------------------------------------------------
 Semiconductor Equipment & Products--6.0%
 Altera Corp. 1                            1,500         21,795
- ----------------------------------------------------------------
 Analog Devices, Inc. 1                      320          9,821
- ----------------------------------------------------------------
 ChipPAC, Inc. 1                           4,600         20,796
- ----------------------------------------------------------------
 Linear Technology Corp.                   1,020         33,895
- ----------------------------------------------------------------
 National Semiconductor Corp. 1            1,400         28,420
- ----------------------------------------------------------------
 Skyworks Solutions, Inc. 1                4,460         53,743
- ----------------------------------------------------------------
 Taiwan Semiconductor
 Manufacturing Co. Ltd., ADR               4,900         45,080
                                                    ------------
                                                        213,550

- ----------------------------------------------------------------
 Software--8.0%
 Adobe Systems, Inc.                         700         20,671
- ----------------------------------------------------------------
 Autodesk, Inc.                            1,200         18,588
- ----------------------------------------------------------------
 BEA Systems, Inc. 1                       1,300         14,378
- ----------------------------------------------------------------
 Cadence Design Systems, Inc. 1            1,120         16,150
- ----------------------------------------------------------------
 Electronic Arts, Inc. 1                     610         41,395
- ----------------------------------------------------------------
 Informatica Corp. 1                       2,600         17,940
- ----------------------------------------------------------------
 Intuit, Inc. 1                              500         26,970
- ----------------------------------------------------------------
 Network Associates, Inc. 1                1,220         22,265
- ----------------------------------------------------------------
 SAP AG (Systeme, Anwendungen,
 Produkte in der Datenverarbeitung),
 Sponsored ADR                               820         18,245
- ----------------------------------------------------------------
 Symantec Corp. 1                            800         34,984
- ----------------------------------------------------------------
 Take-Two Interactive Software, Inc. 1       600         17,958
- ----------------------------------------------------------------
 Veritas Software Corp. 1                  1,900         34,542
                                                    ------------
                                                        284,086

                                                   Market Value
                                          Shares     See Note 1
- ----------------------------------------------------------------
 Materials--1.9%
- ----------------------------------------------------------------
 Chemicals--1.4%
 Ecolab, Inc.                                586    $    29,106
- ----------------------------------------------------------------
 International Flavors & Fragrances, Inc.    691         22,817
                                                    ------------
                                                         51,923

- ----------------------------------------------------------------
 Metals & Mining--0.5%
 Nucor Corp.                                 363         18,237
- ----------------------------------------------------------------
 Telecommunication Services--0.5%
- ----------------------------------------------------------------
 Wireless Telecommunication Services--0.5%
 Vodafone Group plc, Sponsored ADR         1,000         18,750
                                                    ------------
 Total Common Stocks (Cost $3,686,118)                3,724,674

- ----------------------------------------------------------------
 Total Investments, at Value
 (Cost $3,686,118)                         104.4%     3,724,674
- ----------------------------------------------------------------
 Liabilities in Excess of Other Assets      (4.4)      (158,564)
                                           ---------------------
 Net Assets                                100.0%   $ 3,566,110
                                           =====================


Footnotes to Statement of Investments


1. Non-income producing security.

See accompanying Notes to Financial Statements.

8 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENT OF ASSETS AND LIABILITIES November 30, 2002


- -----------------------------------------------------------------------------------------
 Assets

 Investments, at value (cost $3,686,118)--see accompanying statement
$ 3,724,674
- -----------------------------------------------------------------------------------------
 Receivables and other assets:
 Investments
sold                                                                183,601
 Interest and dividends
                                                      754
 Shares of beneficial interest
sold                                                  458

Other
846

- ------------
 Total
assets
3,910,333

- -----------------------------------------------------------------------------------------
 Liabilities
 Bank
overdraft
86,049
- -----------------------------------------------------------------------------------------
 Payables and other liabilities:
 Investments purchased
                                            238,636
 Shareholder
reports                                                               9,963
 Legal, auditing and other professional
fees                                       7,659
 Transfer and shareholder servicing agent
fees                                       569
 Trustees'
compensation                                                              321
 Distribution and service plan
fees                                                  210
 Other
                                                                      816

- ------------
 Total
liabilities
344,223

- -----------------------------------------------------------------------------------------
 Net Assets
$ 3,566,110

============

- -----------------------------------------------------------------------------------------
 Composition of Net Assets
 Paid-in capital
$ 5,783,279
- -----------------------------------------------------------------------------------------
 Accumulated net realized loss on investment transactions
(2,255,725)
- -----------------------------------------------------------------------------------------
 Net unrealized appreciation on
investments                                       38,556

- ------------
 Net Assets
$ 3,566,110

============


9 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


STATEMENT OF ASSETS AND LIABILITIES Continued



- -----------------------------------------------------------------------------------------

 Net Asset Value Per Share
 Class A Shares:
 Net asset value and redemption price per share
 (based on net assets of $3,147,846 and 545,996
 shares of beneficial interest
outstanding)                                        $5.77
 Maximum offering price per share (net asset value
 plus sales charge of 5.75% of offering
price)                                     $6.12
- -----------------------------------------------------------------------------------------
 Class B Shares:
 Net asset value, redemption price (excludes applicable
 contingent deferred sales charge) and offering price
 per share (based on net assets of $193,490 and 34,012
 shares of beneficial interest
outstanding)                                        $5.69
- -----------------------------------------------------------------------------------------
 Class C Shares:
 Net asset value, redemption price (excludes applicable
 contingent deferred sales charge) and offering price
 per share (based on net assets of $156,099 and 27,452
 shares of beneficial interest
outstanding)                                        $5.69
- -----------------------------------------------------------------------------------------
 Class N Shares:
 Net asset value, redemption price (excludes applicable
 contingent deferred sales charge) and offering price
 per share (based on net assets of $68,096 and 11,882
 shares of beneficial interest
outstanding)                                        $5.73
- -----------------------------------------------------------------------------------------
 Class Y Shares:
 Net asset value, redemption price and offering price
 per share (based on net assets of $579 and 100 shares
 of beneficial interest
outstanding)                                               $5.79




 See accompanying Notes to Financial Statements.

10 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENT OF OPERATIONS For the Year Ended November 30, 2002

- --------------------------------------------------------------------------------
 INVESTMENT INCOME
 Dividends (net of foreign withholding taxes of $61)               $     9,524
- --------------------------------------------------------------------------------
 Interest                                                                3,247

- -------------
 Total investment income                                                12,771

- --------------------------------------------------------------------------------
 Expenses
 Management fees                                                        46,707
- --------------------------------------------------------------------------------
 Distribution and service plan fees:
 Class A                                                                   593
 Class B                                                                 1,479
 Class C                                                                 1,309
 Class N                                                                   251
- --------------------------------------------------------------------------------
 Transfer and shareholder servicing agent fees:
 Class A                                                                 4,697
 Class B                                                                   849
 Class C                                                                   547
 Class N                                                                   276
 Class Y                                                                   866
- --------------------------------------------------------------------------------
 Shareholder reports                                                    18,055
- --------------------------------------------------------------------------------
 Legal, auditing and other professional fees                            10,667
- --------------------------------------------------------------------------------
 Trustees' compensation                                                  3,945
- --------------------------------------------------------------------------------
 Custodian fees and expenses                                                82
- --------------------------------------------------------------------------------
 Other                                                                   1,680

- -------------
 Total expenses                                                         92,003
 Less voluntary reimbursement of expenses
(19,411)
 Less voluntary waiver of transfer and shareholder
 servicing agent fees--Classes A, B, C and N
(1,433)
 Less voluntary waiver of transfer and shareholder
 servicing agent fees--Class Y
(863)

- -------------
 Net expenses                                                           70,296

- --------------------------------------------------------------------------------
 Net Investment Loss
(57,525)

- --------------------------------------------------------------------------------
 Realized and Unrealized Loss
 Net realized loss on investments
(885,171)
- --------------------------------------------------------------------------------
 Net change in unrealized depreciation on investments
(121,962)

- -------------
 Net realized and unrealized loss
(1,007,133)

- --------------------------------------------------------------------------------
 Net Decrease in Net Assets Resulting from Operations
$(1,064,658)

=============



 See accompanying Notes to Financial Statements.




11 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

STATEMENTS OF CHANGES IN NET ASSETS



 Year Ended November 30,                                      2002
2001 1
- ------------------------------------------------------------------------------------

 Operations
 Net investment loss                                   $   (57,525)    $
(37,343)
- ------------------------------------------------------------------------------------
 Net realized loss                                        (885,171)
(1,370,554)
- ------------------------------------------------------------------------------------
 Net change in unrealized appreciation (depreciation)     (121,962)
160,518

- -----------------------------
 Net decrease in net assets resulting from operations   (1,064,658)
(1,247,379)

- ------------------------------------------------------------------------------------
 Beneficial Interest Transactions
 Net increase in net assets resulting from beneficial
 interest transactions:
 Class A                                                    79,719
5,282,582
 Class B                                                   133,805
88,164
 Class C                                                    79,667
118,917
 Class N                                                    50,078
28,215
 Class Y                                                        --
            --

- ------------------------------------------------------------------------------------
 Net Assets
 Total increase (decrease)                                (721,389)
4,270,499
- ------------------------------------------------------------------------------------
 Beginning of period                                     4,287,499
17,000 2

- -----------------------------
 End of period                                         $ 3,566,110     $
4,287,499

=============================




1. For the period from February 16, 2001 (inception of offering) to November
30,
2001.
2. Reflects the value of the Manager's initial seed money investment at
December 22, 2000.



 See accompanying Notes to Financial Statements.




12 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

FINANCIAL HIGHLIGHTS



                                                                   Class
A                     Class B                     Class C

Year                        Year                        Year

Ended                       Ended                       Ended
                                                                  Nov.
30,                    Nov. 30,                    Nov. 30,
                                                        2002          2001
1        2002          2001 1        2002          2001 1
- ------------------------------------------------------------------------------------------------------------------------------------


 Per Share Operating Data
 Net asset value, beginning of period                 $ 7.56
$10.00        $ 7.51        $10.00        $ 7.51        $10.00
- ------------------------------------------------------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                    (.09)
(.07)         (.05)         (.14)         (.11)         (.04)
 Net realized and unrealized loss                      (1.70)
(2.37)        (1.77)        (2.35)        (1.71)        (2.45)

- -------------------------------------------------------------------------------
 Total from investment operations                      (1.79)
(2.44)        (1.82)        (2.49)        (1.82)        (2.49)
- ------------------------------------------------------------------------------------------------------------------------------------
 Net asset value, end of period                        $5.77        $
7.56         $5.69        $ 7.51         $5.69        $ 7.51

===============================================================================

- ------------------------------------------------------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 2                   (23.68)%
(24.40)%      (24.23)%      (24.90)%      (24.23)%      (24.90)%

- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)             $3,148
$4,046          $193          $ 95          $156          $114
- ------------------------------------------------------------------------------------------------------------------------------------
 Average net assets (in thousands)                    $3,560
$4,255          $148          $118          $131          $ 40
- ------------------------------------------------------------------------------------------------------------------------------------
 Ratios to average net assets: 3
 Net investment loss                                   (1.42)%
(1.04)%       (2.16)%       (1.93)%       (2.16)%       (1.93)%
 Expenses                                               2.24%
1.75%         3.66%         2.74%         3.51%         2.76%
 Expenses, net of voluntary reimbursement of expenses
 and/or voluntary waiver of transfer agent fees         1.73%
1.75%         2.77%         2.57%         2.79%         2.28%
- ------------------------------------------------------------------------------------------------------------------------------------
 Portfolio turnover rate                                 408%
370%          408%          370%          408%          370%




1. For the period from February 16, 2001 (inception of offering) to November
30,
2001.
2. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
3. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.

13 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


FINANCIAL HIGHLIGHTS  Continued


                                                              Class
N           Class Y

Year              Year

Ended             Ended
                                                             Nov.
30,          Nov. 30,
                                                        2002   2001 1
2002   2001 2
- -----------------------------------------------------------------------------------------

 Per Share Operating Data
 Net asset value, beginning of period                 $ 7.53   $ 9.06   $
7.57   $10.00
- -----------------------------------------------------------------------------------------
 Income (loss) from investment operations:
 Net investment loss                                    (.10)    (.03)
(.08)    (.05)
 Net realized and unrealized loss                      (1.70)   (1.50)
(1.70)   (2.38)

- -------------------------------------
 Total from investment operations                      (1.80)   (1.53)
(1.78)   (2.43)
- -----------------------------------------------------------------------------------------
 Net asset value, end of period                        $5.73    $7.53
$5.79    $7.57

=====================================

- -----------------------------------------------------------------------------------------
 Total Return, at Net Asset Value 3                   (23.90)% (16.89)%
(23.51)% (24.30)%

- -----------------------------------------------------------------------------------------
 Ratios/Supplemental Data
 Net assets, end of period (in thousands)                $68      $31
$1       $1
- -----------------------------------------------------------------------------------------
 Average net assets (in thousands)                       $50      $ 9
$1       $1
 Ratios to average net assets: 4
 Net investment loss                                   (1.67)%  (1.53)%
(0.80)%  (0.63)%
 Expenses                                               3.14%    2.27%
88.69%  501.80%
 Expenses, net of voluntary reimbursement of expenses
 and/or voluntary waiver of transfer agent fees         2.28%    1.74%
1.62%    1.45%
- -----------------------------------------------------------------------------------------
 Portfolio turnover rate                                 408%     370%
408%     370%



1. For the period from March 1, 2001 (inception of offering) to November 30,
2001.
2. For the period from February 16, 2001 (inception of offering) to November
30,
2001.
3. Assumes an investment on the business day before the first day of the
fiscal
period (or inception of offering), with all dividends and distributions
reinvested in additional shares on the reinvestment date, and redemption at
the
net asset value calculated on the last business day of the fiscal period.
Sales
charges are not reflected in the total returns. Total returns are not
annualized
for periods of less than one full year.
4. Annualized for periods of less than one full year.
See accompanying Notes to Financial Statements.

14 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

NOTES TO FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Oppenheimer Select Managers Gartmore Millennium Growth Fund II (the Fund), a
series of Oppenheimer Select Managers, is an open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Fund's investment objective is to seek long-term capital appreciation. The
Fund's investment advisor is OppenheimerFunds, Inc. (the Manager). The Manager
has entered into a sub-advisory agreement with Gartmore Mutual Fund Capital
Trust (the Sub-Advisor).
         The Fund offers Class A, Class B, Class C, Class N and Class Y
shares.
Class A shares are sold at their offering price, which is normally net asset
value plus a front-end sales charge. Class B, Class C and Class N shares are
sold without a front-end sales charge but may be subject to a contingent
deferred sales charge (CDSC). Class N shares are sold only through retirement
plans. Retirement plans that offer Class N shares may impose charges on those
accounts. Class Y shares are sold to certain institutional investors without
either a front-end sales charge or a CDSC. All classes of shares have
identical
rights and voting privileges. Earnings, net assets and net asset value per
share
may differ by minor amounts due to each class having its own expenses directly
attributable to that class. Classes A, B, C and N have separate distribution
and/or service plans. No such plan has been adopted for Class Y shares. Class
B
shares will automatically convert to Class A shares six years after the date
of
purchase.
         The following is a summary of significant accounting policies
consistently followed by the Fund.
- --------------------------------------------------------------------------------
Securities Valuation. Securities listed or traded on National Stock Exchanges
or
other domestic or foreign exchanges are valued based on the last sale price of
the security traded on that exchange prior to the time when the Fund's assets
are valued. In the absence of a sale, the security is valued at the last sale
price on the prior trading day, if it is within the spread of the closing bid
and asked prices, and if not, at the closing bid price. Securities (including
restricted securities) for which quotations are not readily available are
valued
primarily using dealer-supplied valuations, a portfolio pricing service
authorized by the Board of Trustees, or at their fair value. Fair value is
determined in good faith under consistently applied procedures under the
supervision of the Board of Trustees. Short-term "money market type" debt
securities with remaining maturities of sixty days or less are valued at
amortized cost (which approximates market value).
- --------------------------------------------------------------------------------
Joint Repurchase Agreements. The Fund, along with other affiliated funds of
the
Manager, may transfer uninvested cash balances into one or more joint
repurchase
agreement accounts. These balances are invested in one or more repurchase
agreements, secured by U.S. government securities. Securities pledged as
collateral for repurchase agreements are held by a custodian bank until the
agreements mature. Each agreement requires that the market value of the
collateral be sufficient to cover payments of interest and principal; however,
in the event of default by the other party to the agreement, retention of the
collateral may be subject to legal proceedings.
- --------------------------------------------------------------------------------
Allocation of Income, Expenses, Gains and Losses. Income, expenses (other than
those attributable to a specific class), gains and losses are allocated daily
to
each class of shares based upon the relative proportion of net assets
represented by such class. Operating expenses directly attributable to a
specific class are charged against the operations of that class.
- --------------------------------------------------------------------------------
Federal Taxes. The Fund intends to continue to comply with provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income or excise tax provision is required.
    During the fiscal year ended November 30, 2002, the Fund did not utilize
any
capital loss carryforward.

15 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
 1. Significant Accounting Policies Continued
 As of November 30, 2002, the Fund had available for federal income tax
purposes
 unused capital loss carryforwards as follows:

                  Expiring
                  -------------------------------------
                  2009                       $1,370,554
                  2010                          880,670
                                             ----------
                  Total                      $2,251,224
                                             ==========

 As of November 30, 2002, the Fund had approximately $5,000 of post-October
 losses available to offset future capital gains, if any. Such losses, if
 unutilized, will expire in 2011.
- --------------------------------------------------------------------------------
 Dividends and Distributions to Shareholders. Dividends and distributions to
 shareholders, which are determined in accordance with income tax regulations,
 are recorded on the ex-dividend date.
- --------------------------------------------------------------------------------
 Classification of Distributions to Shareholders. Net investment income (loss)
 and net realized gain (loss) may differ for financial statement and tax
 purposes. The character of dividends and distributions made during the fiscal
 year from net investment income or net realized gains may differ from their
 ultimate characterization for federal income tax purposes. Also, due to
timing
 of dividends and distributions, the fiscal year in which amounts are
 distributed may differ from the fiscal year in which the income or net
realized
 gain was recorded by the Fund.
    The Fund adjusts the classification of distributions to shareholders to
 reflect the differences between financial statement amounts and distributions
 determined in accordance with income tax regulations. Accordingly, during the
 year ended November 30, 2002, amounts have been reclassified to reflect
 decrease in paid-in capital $57,525. Accumulated net investment loss was
 decreased by the same amount. Net assets of the Fund were unaffected by the
 reclassifications.
    No distributions were paid during the year ended November 30, 2002 and the
 period ended November 30, 2001.

 As of November 30, 2002, the components of distributable earnings on a tax
 basis were as follows:

                 Accumulated net realized loss        $(2,255,725)
                 Net unrealized appreciation               38,556
                                                      -----------
                 Total                                $(2,217,169)
                                                      ===========

- --------------------------------------------------------------------------------
 Investment Income. Dividend income is recorded on the ex-dividend date or
upon
 ex-dividend notification in the case of certain foreign dividends where the
 ex-dividend date may have passed. Non-cash dividends included in dividend
 income, if any, are recorded at the fair market value of the securities
 received. Interest income, which includes accretion of discount and
 amortization of premium, is accrued as earned.
- --------------------------------------------------------------------------------
 Security Transactions. Security transactions are recorded on the trade date.
 Realized gains and losses on securities sold are determined on the basis of
 identified cost.
- --------------------------------------------------------------------------------
 Other. The preparation of financial statements in conformity with accounting
 principles generally accepted in the United States of America requires
 management to make estimates and assumptions that affect the reported amounts
 of assets and liabilities and disclosure of contingent assets and liabilities
 at the date of the financial state- ments and the reported amounts of income
 and expenses during the reporting period. Actual results could differ from
 those estimates.

16 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II


- --------------------------------------------------------------------------------
 2. Shares of Beneficial Interest
 The Fund has authorized an unlimited number of no par value shares of
 beneficial interest of each class. Transactions in shares of beneficial
 interest were as follows:



                            Year Ended November 30, 2002      Period Ended
November 30, 2001 1
                                Shares            Amount
Shares            Amount
- -----------------------------------------------------------------------------------------------

 Class A
 Sold                           30,084         $ 196,309
595,277        $5,822,887
 Redeemed                      (19,548)         (116,590)
(61,217)         (540,305)

- ----------------------------------------------------------------
 Net increase                   10,536         $  79,719
534,060        $5,282,582

================================================================
- -----------------------------------------------------------------------------------------------
 Class B
 Sold                           42,282         $ 258,845
69,186        $  598,656
 Redeemed                      (20,912)         (125,040)
(56,644)         (510,492)

- ----------------------------------------------------------------
 Net increase                   21,370         $ 133,805
12,542        $   88,164

================================================================
- -----------------------------------------------------------------------------------------------
 Class C
 Sold                           20,939         $ 138,980
15,134        $  119,151
 Redeemed                       (8,689)          (59,313)
(32)             (234)

- ----------------------------------------------------------------
 Net increase                   12,250         $  79,667
15,102        $  118,917

================================================================
- -----------------------------------------------------------------------------------------------
 Class N
 Sold                            7,953         $  51,460
4,166        $   28,215
 Redeemed                         (237)           (1,382)
- --                --

- ----------------------------------------------------------------
 Net increase                    7,716         $  50,078
4,166        $   28,215

================================================================
- -----------------------------------------------------------------------------------------------
 Class Y
 Sold                               --         $      --
- --        $       --
 Redeemed                           --                --
- --                --

- ----------------------------------------------------------------
 Net increase (decrease)            --         $      --
- --        $       --

================================================================


 1. For the period from February 16, 2001 (inception of offering) to November
 30, 2001, for Class A, B, C and Y shares and for the period from March 1,
2001
 (inception of offering) to November 30, 2001, for Class N shares.

- --------------------------------------------------------------------------------
 3. Purchases and Sales of Securities The aggregate cost of purchases and
 proceeds from sales of securities, other than short-term obligations, for the
 year ended November 30, 2002, were $16,210,702 and $15,219,389, respectively.

 As of November 30, 2002, unrealized appreciation (depreciation) based on cost
 of securities for federal income tax purposes of $3,686,118 was composed of:

            Gross unrealized appreciation      $ 251,856
            Gross unrealized depreciation       (213,300)
                                               ---------
            Net unrealized appreciation        $  38,556
                                               =========

 The difference between book-basis and tax-basis unrealized appreciation and
 depreciation, if applicable, is attributable primarily to the tax deferral of
 losses on wash sales, or return of capital dividends, and the realization for
 tax purposes of unrealized gain (loss) on certain futures contracts,
 investments in passive foreign investment companies, and forward foreign
 currency exchange contracts.

17 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

NOTES TO FINANCIAL STATEMENTS  Continued

- --------------------------------------------------------------------------------
4. Fees and Other Transactions with Affiliates
Management Fees. Management fees paid to the Manager were in accordance with
the
investment advisory agreement with the Fund which provides for a fee at an
annual rate of 1.20% of the first $400 million of average annual net assets of
the Fund, 1.10% of the next $400 million, and 1.00% of average annual net
assets
in excess of $800 million. The Manager has voluntarily undertaken to assume
certain Fund expenses. The Manager reserves the right to amend or terminate
that
expense assumption at any time.
- --------------------------------------------------------------------------------
Sub-Advisor Fees. The Manager has retained Gartmore Mutual Fund Capital Trust
as
the Sub-Advisor to provide the day-to-day portfolio management of the Fund.
For
the year ended November 30, 2002, the Manager paid $27,568 to the Sub-Advisor.
- --------------------------------------------------------------------------------
Transfer Agent Fees. OppenheimerFunds Services (OFS), a division of the
Manager,
acts as the transfer and shareholder servicing agent for the Fund. The Fund
pays
OFS a $19.75 per account fee.
    Additionally, Class Y shares are subject to minimum fees of $5,000 for
assets of less than $10 million and $10,000 for assets of $10 million or more.
The Class Y shares are subject to the minimum fees in the event that the per
account fee does not equal or exceed the applicable minimum fees. OFS may
voluntarily waive the minimum fees.
    OFS has voluntarily agreed to limit transfer and shareholder servicing
agent
fees up to an annual rate of 0.35% for all classes. Effective November 1,
2002,
Class Y shares were changed from 0.25% to 0.35%. This undertaking may be
amended
or withdrawn at any time.
- --------------------------------------------------------------------------------
Distribution and Service Plan (12b-1) Fees. Under its General Distributor's
Agreement with the Manager, OppenheimerFunds Distributor, Inc. (the
Distributor)
acts as the Fund's principal underwriter in the continuous public offering of
the different classes of shares of the Fund.

The compensation paid to (or retained by) the Distributor from the sale of
shares or on the redemption of shares is shown in the table below for the
period
indicated.



                   Aggregate        Class A      Concessions
Concessions       Concessions      Concessions
                   Front-End      Front-End       on Class A        on Class
B        on Class C       on Class N
               Sales Charges  Sales Charges           Shares
Shares            Shares           Shares
                  on Class A    Retained by      Advanced by       Advanced
by       Advanced by      Advanced by
Year Ended            Shares    Distributor    Distributor 1     Distributor
1     Distributor 1    Distributor 1
- -----------------------------------------------------------------------------------------------------------------

November 30, 2002     $2,876         $1,899               $7
$4,524              $926             $279


1. The Distributor advances concession payments to dealers for certain sales
of
Class A shares and for sales of Class B, Class C and Class N shares from its
own
resources at the time of sale.



                                            Class A                   Class
B                   Class C                   Class N
                                Contingent Deferred       Contingent
Deferred       Contingent Deferred       Contingent Deferred
                                      Sales Charges             Sales
Charges             Sales Charges             Sales Charges
                                        Retained by               Retained
by               Retained by               Retained by
Year Ended                              Distributor
Distributor               Distributor               Distributor
- ----------------------------------------------------------------------------------------------------------------------------------


November 30, 2002                               $--
$2,142                        $8                        $4


- --------------------------------------------------------------------------------
Service Plan for Class A Shares. The Fund has adopted a Service
Plan for Class A shares. It reimburses the Distributor for a portion of its
costs incurred for services provided to accounts that hold Class A shares.
Reimbursement is made quarterly at an annual rate of up to 0.25% of the
average
annual net assets of Class A shares of the Fund. For the year ended November
30,
2002, payments under the Class A Plan totaled $593, all of which were paid by
the Distributor to recipients, and included $167 paid to an affiliate of the
Manager. Any unreimbursed expenses the Distributor incurs with respect to
Class
A shares in any fiscal year cannot be recovered in subsequent years.
- --------------------------------------------------------------------------------
Distribution and Service Plans for Class B, Class C and Class N Shares. The
Fund
has adopted Distribution and Service Plans for Class B, Class C and Class N
shares. Under the plans, the Fund pays the Distributor an annual asset-based
sales charge of 0.75% per year on Class B shares and on Class C shares and the
Fund pays the Distributor an annual asset-based sales charge of 0.25% per year
on Class N shares. The Distributor also receives a service fee of 0.25% per
year
under each plan.


18 | OPPENHEIMER SELECT MANAGERS GARTMORE MILLENNIUM GROWTH FUND II

 Distribution fees paid to the Distributor for the year ended November 30,
2002,
 were as follows:




                                   Distributor's Aggregate

Distributor's Aggregate             Unreimbursed
                                      Total Payments           Amount
Retained     Unreimbursed Expenses         Expenses as % of
                                          Under Plan            by
Distributor                Under Plan      Net Assets of Class
- ----------------------------------------------------------------------------------------------------------------------------------

 Class B Plan                                 $1,479
$1,339                   $41,203                    21.29%
 Class C Plan                                  1,309
1,025                    41,624                    26.67
 Class N Plan                                    251
236                     5,037                     7.40



- --------------------------------------------------------------------------------
5. Borrowing and Lending Arrangements Bank Borrowings.  Until November 12, 2002,
the Fund had the  ability  to  borrow  from a bank for  temporary  or  emergency
purposes  provided  asset  coverage for  borrowings  exceeded 300%. The Fund and
other Oppenheimer funds  participated in a $400 million unsecured line of credit
with a bank.  Under that unsecured line of credit,  interest was charged to each
fund,  based on its  borrowings,  at a rate equal to the Federal Funds Rate plus
0.45%.  Under that credit facility,  the Fund paid a commitment fee equal to its
pro rata share of the average unutilized amount of the credit facility at a rate
of                     0.08%                     per                      annum.
- --------------------------------------------------------------------------------
Interfund Borrowing and Lending  Arrangements.  Effective November 12, 2002, the
following  interfund  borrowing  and  lending  arrangements  went  into  effect.
Consistent  with its  fundamental  policies and  pursuant to an exemptive  order
issued by the Securities and Exchange Commission ("SEC"), the Fund may engage in
borrowing  and  lending  activities  with  other  funds in the  OppenheimerFunds
complex.  Borrowing  money  from  affiliated  funds  may  afford  the  Fund  the
flexibility to use the most cost-effective  alternative to satisfy its borrowing
requirements. Lending money to an affiliated fund may allow the Fund to obtain a
higher  rate  of  return  than it  could  from  interest  rates  on  alternative
short-term investments. Implementation of interfund lending will be accomplished
consistent with applicable regulatory requirements,  including the provisions of
the SEC order. There is a risk that a borrowing fund could have a loan called on
one day's  notice.  In that  circumstance,  the Fund might have to borrow from a
bank at a higher  interest cost if money to lend were not available from another
Oppenheimer  fund.  When the Fund lends assets to another  affiliated  fund, the
Fund is subject to the risk that the borrowing fund fails to repay the loan. The
Fund had no borrowing or lending arrangements  outstanding during the year ended
or at November 30, 2002.

EX-99.11

[GRAPHIC OMITTED][GRAPHIC OMITTED]

     June 18, 2003


NYDB01 17147481.4 061703 1219E
99566200


NYDB01 17147481.4 061703 1219E  99566200

       Brussels Charlotte Chicago Cologne Frankfurt Houston London Los
         Angeles Manchester New York Palo Alto Paris Washington, D.C.
  Independent Mexico City Correspondent: Jauregui, Navarrete, Nader y Rojas,
                                     S.C.

    Mayer, Brown, Rowe & Maw is a U.S. General Partnership. We operate in
  combination with our associated English partnership in the offices listed
                                    above.



                                                      [GRAPHIC
                                                      OMITTED][GRAPHIC OMITTED]


June 18, 2003                                         1675 Broadway
                                                      New York, New York 10019-5820

                                                      Main Tel (212) 506-2500
                                                      Main Fax (212) 262-1910
                                                      www.mayerbrownrowe.com




Oppenheimer MidCap Fund
6803 South Tucson Way
Centennial, Colorado 80112


Ladies and Gentlemen:

            This opinion is being furnished to Oppenheimer MidCap Fund, a
Massachusetts business trust ("MidCap"), in connection with the Registration
Statement on Form N-14 (the "Registration Statement") under the Securities
Act of 1933, as amended (the "1933 Act"), by MidCap in connection with the
acquisition by MidCap of substantially all the assets of  Gartmore Millennium
Growth Fund II, a series of Oppenheimer Select Managers, a Massachusetts
business trust ("OSM-Gartmore"), in exchange for shares of beneficial
interest of MidCap ("Shares") and the assumption by MidCap of certain stated
liabilities of OSM-Gartmore pursuant to an Agreement and Plan of
Reorganization dated as of April 28, 2003 (the "Reorganization Agreement").
We have examined such statutes, regulations, corporate records and other
documents and reviewed such questions of law as we deemed necessary or
appropriate for the purposes of this opinion.

            As to matters of Massachusetts law contained in this opinion, we
have relied upon the opinion of Kushner & Sanders LLP, dated the date hereof.

            Based upon the foregoing, we are of the opinion that the Shares
when issued, as described in the Reorganization Agreement, will be duly
authorized and, assuming receipt of the consideration to be paid therefor,
upon delivery as provided in the Reorganization Agreement, will be validly
issued, fully paid and non-assessable (except for the potential liability of
shareholders described in MidCap's Statement of Additional Information dated
December 23, 2002 under the caption "Shareholder and Trustee  Liability").

            We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us as legal counsel to
MidCap in the Prospectus forming a part of the Registration Statement.  We do
not thereby admit that we are within the category of persons whose consent is
required under Section 7 of the 1933 Act or the rules and regulations of the
Securities and Exchange Commission thereunder.

                                    Very truly yours,

                                /s/ Mayer, Brown, Rowe & Maw

EX-99.12

                                    DRAFT






[Date]


OSM Gartmore Millennium Growth Fund II
6803 S. Tucson Way
Centennial, Colorado 80112

Dear Sirs:

We have reviewed the Agreement and Plan of Reorganization between OSM
Gartmore Millennium Growth Fund II (Gartmore) and Oppenheimer MidCap Fund
(MidCap) which is attached as Exhibit A of [name of registrant] Registration
Statement under the Securities Act of 1933 on Form N-14 filed with the
Securities and Exchange Commission on [filing date] concerning the
acquisition by MidCap of substantially all of the assets of Gartmore solely
for voting shares of beneficial interest in MidCap, followed by the
distribution of such shares in exchange for all of the outstanding shares of
Gartmore.

Section 368(a)(1)(C), IRC provides that, when determining whether the
exchange is solely for stock, the assumption by MidCap of a liability of
Gartmore shall be disregarded.

The managements of both MidCap and Gartmore have represented to us that there
is no plan or intention by any shareholder of Gartmore who owns 5% or more of
the outstanding shares of Gartmore and, to the best of their knowledge, there
is no plan or intention on the part of the remaining shareholders of Gartmore
to redeem, sell, exchange, or otherwise dispose of MidCap shares to MidCap,
other than in the ordinary course of business.

Management of each fund has further represented to us that, as of the date of
the exchange, both MidCap and Gartmore will qualify as regulated investment
companies or will meet the diversification test of Section 368(a)(2)(F)(ii),
IRC, and that a significant portion (as contemplated by Regulation Section
1.368-1(d)(3), IRC) of Gartmore's existing assets will continue to be held
beyond the date of the transaction and liquidated only in the ordinary course
of business.

In our opinion, the federal tax consequences of the transaction, if carried
out in the manner outlined in the Agreement and in accordance with the above
representations, should be as follows:


1.    The transactions contemplated by the Agreement should qualify as a
      tax-free "reorganization" within the meaning of Section 368(a)(1) of
      the Internal Revenue Code of
      1986, as amended, and under the regulations promulgated thereunder.

2.    MidCap and Gartmore should each qualify as a "party to a
      reorganization" within the meaning of Section 368(b)(2).

3.    No gain or loss should be recognized by the shareholders of Gartmore
      upon the distribution of shares of beneficial interest in MidCap to the
      shareholder of Gartmore pursuant to Section 354.

4.    Under Section 361(a) no gain or loss should be recognized by Gartmore
      by reason of the transfer of its assets solely in exchange for shares
      of MidCap.

5.    Under Section 1032 no gain or loss should be recognized by MidCap by
      reason of the transfer of Gartmore assets solely in exchange for shares
      of MidCap.

6.    The stockholders of Gartmore should have the same tax basis and holding
      period for the shares of beneficial interest in MidCap that they
      receive as they had for the stock of Gartmore that they previously
      held, pursuant to Sections 358(a) and 1223(1), respectively.

7.    The securities transferred by Gartmore to MidCap should have the same
      tax basis and holding period in the hands of MidCap as they had for
      Gartmore, pursuant to Sections 362(b) and 1223(1), respectively.

   Very truly yours,

                                    DRAFT






[Date]


Oppenheimer MidCap Fund
6803 S. Tucson Way
Centennial, Colorado 80112

Dear Sirs:

We have reviewed the Agreement and Plan of Reorganization between OSM
Gartmore Millennium Growth Fund II (Gartmore) and Oppenheimer MidCap Fund
(MidCap) which is attached as Exhibit A of [name of registrant] Registration
Statement under the Securities Act of 1933 on Form N-14 filed with the
Securities and Exchange Commission on [filing date] concerning the
acquisition by MidCap of substantially all of the assets of Gartmore solely
for voting shares of beneficial interest in MidCap, followed by the
distribution of such shares in exchange for all of the outstanding shares of
Gartmore.

Section 368(a)(1)(C), IRC provides that, when determining whether the
exchange is solely for stock, the assumption by MidCap of a liability of
Gartmore shall be disregarded.

The managements of both MidCap and Gartmore have represented to us that there
is no plan or intention by any shareholder of Gartmore who owns 5% or more of
the outstanding shares of Gartmore and, to the best of their knowledge, there
is no plan or intention on the part of the remaining shareholders of Gartmore
to redeem, sell, exchange, or otherwise dispose of MidCap shares to MidCap,
other than in the ordinary course of business.

Management of each fund has further represented to us that, as of the date of
the exchange, both MidCap and Gartmore will qualify as regulated investment
companies or will meet the diversification test of Section 368(a)(2)(F)(ii),
IRC, and that a significant portion (as contemplated by Regulation Section
1.368-1(d)(3), IRC) of Gartmore's existing assets will continue to be held
beyond the date of the transaction and liquidated only in the ordinary course
of business.

In our opinion, the federal tax consequences of the transaction, if carried
out in the manner outlined in the Agreement and in accordance with the above
representations, should be as follows:


8.    The transactions contemplated by the Agreement should qualify as a
      tax-free "reorganization" within the meaning of Section 368(a)(1) of
      the Internal Revenue Code of
      1986, as amended, and under the regulations promulgated thereunder.

9.    MidCap and Gartmore should each qualify as a "party to a
      reorganization" within the meaning of Section 368(b)(2).

10.   No gain or loss should be recognized by the shareholders of Gartmore
      upon the distribution of shares of beneficial interest in MidCap to the
      shareholder of Gartmore pursuant to Section 354.

11.   Under Section 361(a) no gain or loss should be recognized by Gartmore
      by reason of the transfer of its assets solely in exchange for shares
      of MidCap.

12.   Under Section 1032 no gain or loss should be recognized by MidCap by
      reason of the transfer of Gartmore assets solely in exchange for shares
      of MidCap.

13.   The stockholders of Gartmore should have the same tax basis and holding
      period for the shares of beneficial interest in MidCap that they
      receive as they had for the stock of Gartmore that they previously
      held, pursuant to Sections 358(a) and 1223(1), respectively.

14.   The securities transferred by Gartmore to MidCap should have the same
      tax basis and holding period in the hands of MidCap as they had for
      Gartmore, pursuant to Sections 362(b) and 1223(1), respectively.

   Very truly yours,

EX-99

                                  Proxy Card

        Oppenheimer Select Managers Gartmore Millennium Growth Fund II

Proxy For a Special Shareholders Meeting of shareholders To Be Held on AUGUST
                                   29, 2003

The undersigned,  revoking prior proxies, hereby appoints Brian Wixted, Philip
Vottiero,   Kate   Ives  and   Philip   Masterson,   and  each  of  them,   as
attorneys-in-fact  and  proxies  of  the  undersigned,   with  full  power  of
substitution,  to vote  shares  held in the  name  of the  undersigned  on the
record date at the  Special  Meeting of  Shareholders  of  Oppenheimer  Select
Managers  Gartmore  Millennium  Growth Fund II (the "Fund") to be held at 6803
South Tucson Way,  Centennial,  Colorado,  80112,  on August 29, 2003, at 1:00
p.m.  Mountain  time,  or at  any  adjournment  thereof,  upon  the  proposals
described in the Notice of Meeting and  accompanying  Proxy  Statement,  which
have been received by the undersigned.

This proxy is solicited  on behalf of the Fund's  Board of  Trustees,  and the
proposal  (set forth on the reverse side of this proxy card) has been proposed
by the Board of Trustees.  When properly executed, this proxy will be voted as
indicated on the reverse  side or "FOR" a proposal if no choice is  indicated.
The proxy will be voted in  accordance  with the proxy  holders' best judgment
as to any other matters that may arise at the Meeting.

                              VOTE VIA THE TELEPHONE:  1-800-597-7836
                              CONTROL NUMBER:  999  9999  9999  999

                              Note:  Please  sign this  proxy  exactly as your
                              name or names  appear  hereon.  Each joint owner
                              should  sign.  Trustees  and  other  fiduciaries
                              should  indicate  the  capacity  in  which  they
                              sign.  If a  corporation,  partnership  or other
                              entity,  this signature should be that of a duly
                              authorized  individual  who should  state his or
                              her title.


                              Signature


                              Signature of joint owner, if any


                              Date


PLEASE VOTE ON THE REVERSE SIDE, SIGN AND DATE THIS PROXY AND RETURN PROMPTLY
                           IN THE ENCLOSED ENVELOPE



The Proposal:

To approve an Agreement and Plan of Reorganization  between Oppenheimer MidCap
Fund ("MidCap  Fund"),  and Oppenheimer  Select Managers  Gartmore  Millennium
Growth  Fund II  ("GMG  Fund")  and  the  transactions  contemplated  thereby,
including:  (a) the  transfer of  substantially  all the assets of GMG Fund to
MidCap  Fund in  exchange  for Class A,  Class B, Class C, Class N and Class Y
shares of MidCap Fund, (b) the  distribution  of such shares of MidCap Fund to
the corresponding  Class A, Class B, Class C, Class N and Class Y shareholders
of GMG Fund in complete  liquidation of GMG Fund, and (c) the  cancellation of
the outstanding shares of GMG Fund.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK.  Example: [ ]

FOR [___]               AGAINST [___]           ABSTAIN [___]

EX-99

John V. Murphy                                  OppenheimerFunds Logo
- --------------                                  ---------------------
President &                                     498 Seventh Avenue, 10th Floor
Chief Executive Officer                               New York, NY 10018
July 14, 2003                                         1.800.708.7780
                                                 www.oppenheimerfunds.com


Dear Oppenheimer Select Managers Gartmore Millennium Growth Fund II
Shareholder,

One of the things we are proud of at OppenheimerFunds,  Inc. is our commitment
to our Fund  shareholders.  I am  writing to you today to let you know about a
positive  change  that has  been  proposed  for  Oppenheimer  Select  Managers
Gartmore Millennium Growth Fund II.

After  careful  consideration,  the Board of Trustees has  determined  that it
would be in the best interest of shareholders  of Oppenheimer  Select Managers
Gartmore  Millennium  Growth Fund II ("GMG Fund") to  reorganize  into another
Oppenheimer  fund,  Oppenheimer  MidCap Fund  ("MidCap  Fund").  A shareholder
meeting has been scheduled in August,  and all GMG Fund shareholders of record
as of June 18, 2003 are being  asked to vote either in person or by proxy,  on
the proposed  reorganization.  You will find a notice of the meeting, a ballot
card, a proxy statement  detailing the proposal,  a MidCap Fund prospectus and
a postage-paid return envelope enclosed for your use.

Why does the Board of Trustees recommend this change?
- -----------------------------------------------------

      GMG Fund and MidCap Fund have similar  investment  objectives.  GMG Fund
seeks   long-term   capital   appreciation   and  MidCap  Fund  seeks  capital
appreciation.  In seeking  their  investment  objectives,  GMG Fund and MidCap
Fund  utilize a similar  investing  strategy.  GMG Fund  invests  primarily in
securities of growth  companies that are creating  fundamental  changes in the
economy and MidCap Fund looks for,  among other  characteristics,  established
growth  companies  that are  well-positioned  to take  advantage of product or
technology advances in their industry or related growth sector.

Among other factors,  the GMG Fund Board  considered that the expense ratio of
MidCap Fund has been lower than the expense  ratio of GMG fund.  Although past
performance  is not  predictive of future  results,  shareholders  of GMG Fund
would  have an  opportunity  to  become  shareholders  of a fund with a better
long-term performance history.

How do you vote?
- ----------------

No matter  how large or small  your  investment,  your vote is  important,  so
please review the proxy statement  carefully.  To cast your vote, simply mark,
sign and date the  enclosed  proxy  ballot and  return it in the  postage-paid
envelope today.  Remember,  it can be costly for the Fund--and  ultimately for
you as a  shareholder--to  remail ballots if not enough responses are received
to conduct the meeting.

If you have any  questions  about the  proposal,  please  feel free to contact
your  financial  advisor  or  call  us  at   1.800.708.7780.   As  always,  we
appreciate  your  confidence in  OppenheimerFunds  and look forward to serving
you for many years to come.


                                          Sincerely,

                                        /s/John V. Murphy
                                        --------------------------------
                                          John V. Murphy


Enclosures

EX-99

                        Telephone Voting Instructions



                                1.800.597.7836

Vote your OppenheimerFunds proxy over the phone
Voting your proxy is important.  And now
OppenheimerFunds has made it easy.  Vote at your
convenience, 24 hours a day, and save postage
costs, ultimately reducing fund expenses.  Read
your Proxy Card carefully.  To exercise your
proxy, just follow these simple steps:

1.    Call the toll free number: 1.800.597.7836.

2.    Enter the 14-digit Control Number, located on your Proxy Card.

3.    Follow the voice instructions.

If vote by phone, please do not mail your Proxy Card.

EX-99.16

      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director  of  Oppenheimer  Cash Reserves,  Oppenheimer  Capital Income
Fund,   Oppenheimer  Champion  Income  Fund,   Oppenheimer  High  Yield  Fund,
Oppenheimer  International Bond Fund, Oppenheimer Integrity Funds, Oppenheimer
Limited-Term  Government Fund, Oppenheimer Main Street Fund, Inc., Oppenheimer
Main  Street  Opportunity  Fund,  Oppenheimer  Main  Street  Small  Cap  Fund,
Oppenheimer  Municipal Fund,  Oppenheimer Real Asset Fund,  Oppenheimer Select
Managers,  Oppenheimer Senior Floating Rate Fund, Oppenheimer Strategic Income
Fund,  Oppenheimer Total Return Fund, Inc., Oppenheimer Variable Account Funds
and Panorama  Series Fund,  Inc. (the "Funds"),  to sign on his behalf any and
all proxy statements under the Securities Act of 1933, as amended,  (including
any amendments and  supplements  thereto),  and other  documents in connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ John Murphy
- -----------------------
John Murphy




      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer  Real  Asset  Fund,   Oppenheimer  Select  Managers,   Oppenheimer
Strategic  Income  Fund,  Oppenheimer  Total Return  Fund,  Inc.,  Oppenheimer
Variable  Account Funds and Panorama Series Fund, Inc. (the "Funds"),  to sign
on her behalf any and all proxy  statements  under the Securities Act of 1933,
as amended,  (including  any amendments and  supplements  thereto),  and other
documents in connection  thereunder,  and to file the same,  with all exhibits
thereto,  and  other  documents  in  connection  therewith,  and  any  and all
Registration   Statements   (including   any   post-effective   amendments  to
Registration  Statements)  under the  Securities  Act of 1933,  the Investment
Company Act of 1940 and any  amendments  and  supplements  thereto,  and other
documents in connection  thereunder,  and to file the same,  with all exhibits
thereto, and other documents in connection therewith,  with the Securities and
Exchange  Commission,  granting unto said  attorneys-in-fact  and agents,  and
each of them,  full power and  authority  to do and perform each and every act
and thing  requisite and  necessary to be done in and about the  premises,  as
fully as to all  intents  and  purposes  as she  might or could do in  person,
hereby  ratifying and confirming all that said  attorneys-in-fact  and agents,
and each of them, may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ Beverly L. Hamilton
- -----------------------
Beverly L. Hamilton




      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer  Real  Asset  Fund,   Oppenheimer  Select  Managers,   Oppenheimer
Strategic  Income  Fund,  Oppenheimer  Total Return  Fund,  Inc.,  Oppenheimer
Variable  Account Funds and Panorama Series Fund, Inc. (the "Funds"),  to sign
on his behalf any and all proxy  statements  under the Securities Act of 1933,
as amended,  (including  any amendments and  supplements  thereto),  and other
documents in connection  thereunder,  and to file the same,  with all exhibits
thereto,  and  other  documents  in  connection  therewith,  and  any  and all
Registration   Statements   (including   any   post-effective   amendments  to
Registration  Statements)  under the  Securities  Act of 1933,  the Investment
Company Act of 1940 and any  amendments  and  supplements  thereto,  and other
documents in connection  thereunder,  and to file the same,  with all exhibits
thereto, and other documents in connection therewith,  with the Securities and
Exchange  Commission,  granting unto said  attorneys-in-fact  and agents,  and
each of them,  full power and  authority  to do and perform each and every act
and thing  requisite and  necessary to be done in and about the  premises,  as
fully as to all  intents  and  purposes  as he  might  or could do in  person,
hereby  ratifying and confirming all that said  attorneys-in-fact  and agents,
and each of them, may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ Robert J. Malone
- -----------------------
Robert J. Malone






      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ James C. Swain
- -----------------------
James C. Swain





      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ William L. Armstrong
- -----------------------
William L. Armstrong






      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ Robert G. Avis
- -----------------------
Robert G. Avis




      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ George C. Bowen
- -----------------------
George C. Bowen




      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ Edward L. Cameron
- -----------------------
Edward L. Cameron




      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ Jon S. Fossel
- -----------------------
Jon S. Fossel




      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ Sam Freedman
- -----------------------
Sam Freedman




      KNOW ALL MEN BY THESE  PRESENTS,  that the  undersigned  constitutes and
appoints   Robert  G.  Zack  and   Katherine  P.  Feld  his  true  and  lawful
attorneys-in-fact   and  agents,   and  each  of  them,  with  full  power  of
substitution  and  resubstitution,  for him in his  capacity as an Officer and
Trustee/Director of Centennial America Fund, L.P.,  Centennial  California Tax
Exempt Trust,  Centennial  Government  Trust,  Centennial  Money Market Trust,
Centennial   New  York  Tax  Exempt  Trust,   Centennial   Tax  Exempt  Trust,
Oppenheimer  Cash  Reserves,  Oppenheimer  Capital  Income  Fund,  Oppenheimer
Champion Income Fund, Oppenheimer High Yield Fund,  Oppenheimer  International
Bond Fund, Oppenheimer Integrity Funds,  Oppenheimer  Limited-Term  Government
Fund,  Oppenheimer Main Street Fund, Inc., Oppenheimer Main Street Opportunity
Fund,  Oppenheimer  Main Street Small Cap Fund,  Oppenheimer  Municipal  Fund,
Oppenheimer   Real  Asset  Fund,   Oppenheimer   Senior  Floating  Rate  Fund,
Oppenheimer Select Managers,  Oppenheimer  Strategic Income Fund,  Oppenheimer
Total Return  Fund,  Inc.,  Oppenheimer  Variable  Account  Funds and Panorama
Series  Fund,  Inc.  (the  "Funds"),  to sign on his  behalf any and all proxy
statements  under the  Securities  Act of 1933,  as  amended,  (including  any
amendments  and  supplements  thereto),  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents in connection  therewith,  and any and all  Registration  Statements
(including any  post-effective  amendments to Registration  Statements)  under
the  Securities  Act of  1933,  the  Investment  Company  Act of 1940  and any
amendments  and  supplements   thereto,  and  other  documents  in  connection
thereunder,  and to file  the  same,  with all  exhibits  thereto,  and  other
documents  in  connection   therewith,   with  the   Securities  and  Exchange
Commission,  granting  unto said  attorneys-in-fact  and  agents,  and each of
them,  full power and authority to do and perform each and every act and thing
requisite and  necessary to be done in and about the premises,  as fully as to
all intents and purposes as he might or could do in person,  hereby  ratifying
and confirming all that said  attorneys-in-fact  and agents, and each of them,
may lawfully do or cause to be done by virtue hereof.

Dated:      May 12, 2003



/s/ F. William Marshall, Jr.
- -----------------------
F. William Marshall, Jr.