-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SswxQjTJUtWKY8vLeoqz6Cd8hotWGRhEwoWdrGomre5GnbnDf24bO0vJbutPXdcy xtBLSFcKO8j0j0ZIhzSSLA== 0000935069-08-002319.txt : 20080925 0000935069-08-002319.hdr.sgml : 20080925 20080924174317 ACCESSION NUMBER: 0000935069-08-002319 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080731 FILED AS OF DATE: 20080925 DATE AS OF CHANGE: 20080924 EFFECTIVENESS DATE: 20080925 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Oppenheimer Portfolio Series CENTRAL INDEX KEY: 0001307792 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-21686 FILM NUMBER: 081087272 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112-3924 0001307792 S000007511 Active Allocation Fund C000020527 A C000020528 B C000020529 C C000020530 N C000020531 Y 0001307792 S000007512 Equity Investor Fund C000020532 A C000020533 B C000020534 C C000020535 N C000020536 Y 0001307792 S000007513 Conservative Investor Fund C000020537 A C000020538 B C000020539 C C000020540 N C000020541 Y 0001307792 S000007514 Moderate Investor Fund C000020542 A C000020543 B C000020544 C C000020545 N C000020546 Y N-CSRS 1 rs540_48843ncsrs.txt RS540_48843NCSRS.TXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-21686 Oppenheimer Portfolio Series (Exact name of registrant as specified in charter) 6803 South Tucson Way, Centennial, Colorado 80112-3924 (Address of principal executive offices) (Zip code) Robert G. Zack, Esq. OppenheimerFunds, Inc. Two World Financial Center, New York, New York 10281-1008 (Name and address of agent for service) Registrant's telephone number, including area code: (303) 768-3200 Date of fiscal year end: January 31 Date of reporting period: 07/31/2008 ITEM 1. REPORTS TO STOCKHOLDERS. JULY 31, 2008 - -------------------------------------------------------------------------------- Equity Management Investor Fund Commentaries A Series of Oppenheimer Portfolio Series and Semiannual Report - -------------------------------------------------------------------------------- MANAGEMENT COMMENTARIES An Interview with Your Fund's Managers SEMIANNUAL REPORT Listing of Investments Financial Statements [OPPENHEIMERFUNDS LOGO] TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- ASSET CLASS ALLOCATION [PIE CHART] U.S. Equity Funds 70.6% Global Equity Funds 29.4
Fund holdings and allocations are subject to change. Percentages are as of July 31, 2008, and are based on the total market value of investments in affiliated companies. 10 | EQUITY INVESTOR FUND NOTES - -------------------------------------------------------------------------------- Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. The Fund's investment strategy and focus can change over time. The mention of specific holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 4/5/05. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. 11 | EQUITY INVESTOR FUND NOTES - -------------------------------------------------------------------------------- CLASS Y shares of the Fund were first publicly offered on 4/5/05. Class Y shares are offered only to certain institutional investors under a special agreement with the Distributor, and to present or former officers, directors, trustees or employees (and their eligible family members) of the Fund, the Manager, its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 12 | EQUITY INVESTOR FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended July 31, 2008. ACTUAL EXPENSES. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts 13 | EQUITY INVESTOR FUND FUND EXPENSES Continued - -------------------------------------------------------------------------------- valued at less than $500.00 (subject to exceptions described in the Statement of Additional Information). Therefore, the "hypothetical" section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED ACTUAL FEBRUARY 1, 2008 JULY 31, 2008 JULY 31, 2008 - ------------------------------------------------------------------------------------------ Class A $1,000.00 $ 943.40 $2.32 - ------------------------------------------------------------------------------------------ Class B 1,000.00 939.50 6.14 - ------------------------------------------------------------------------------------------ Class C 1,000.00 939.40 6.00 - ------------------------------------------------------------------------------------------ Class N 1,000.00 941.50 3.29 - ------------------------------------------------------------------------------------------ Class Y 1,000.00 945.30 0.05 HYPOTHETICAL (5% return before expenses) - ------------------------------------------------------------------------------------------ Class A 1,000.00 1,022.48 2.42 - ------------------------------------------------------------------------------------------ Class B 1,000.00 1,018.55 6.39 - ------------------------------------------------------------------------------------------ Class C 1,000.00 1,018.70 6.24 - ------------------------------------------------------------------------------------------ Class N 1,000.00 1,021.48 3.42 - ------------------------------------------------------------------------------------------ Class Y 1,000.00 1,024.81 0.05
Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Those annualized expense ratios, excluding all underlying fund expenses, based on the 6-month period ended July 31, 2008 are as follows:
CLASS EXPENSE RATIOS - ----------------------------- Class A 0.48% - ----------------------------- Class B 1.27 - ----------------------------- Class C 1.24 - ----------------------------- Class N 0.68 - ----------------------------- Class Y 0.01
The expense ratios reflect reduction to custodian expenses and voluntary waivers or reimbursements of expenses by the Fund's Manager that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable. 14 | EQUITY INVESTOR FUND STATEMENT OF INVESTMENTS July 31, 2008 / Unaudited - --------------------------------------------------------------------------------
SHARES VALUE - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- INVESTMENT COMPANIES--100.1% 1 - ------------------------------------------------------------------------------------------------------------------- GLOBAL EQUITY FUNDS--29.5% Oppenheimer Developing Markets Fund, Cl. Y 614,419 $ 26,389,303 - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Global Fund, Cl. Y 1,674,136 104,231,726 - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Global Opportunities Fund, Cl. Y 932,855 26,138,610 -------------- 156,759,639 - ------------------------------------------------------------------------------------------------------------------- U.S. EQUITY FUNDS--70.6% Oppenheimer Capital Appreciation Fund, Cl. Y 2,314,533 108,505,302 - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Main Street Fund, Cl. Y 2,499,116 79,746,784 - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Main Street Opportunity Fund, Cl. Y 4,402,151 53,310,044 - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Main Street Small Cap Fund, Cl. Y 2,954,802 56,052,608 - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Value Fund, Cl. Y 3,477,005 78,232,610 -------------- 375,847,348 - ------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $602,994,764) 100.1% 532,606,987 - ------------------------------------------------------------------------------------------------------------------- LIABILITIES IN EXCESS OF OTHER ASSETS (0.1) (389,485) ---------------------------- NET ASSETS 100.0% $532,217,502 ============================
FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended July 31, 2008, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES JANUARY 31, 2008 ADDITIONS REDUCTIONS JULY 31, 2008 - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y 2,170,054 249,091 104,612 2,314,533 Oppenheimer Developing Markets Fund, Cl. Y 681,054 67,064 133,699 614,419 Oppenheimer Global Fund, Cl. Y 1,505,084 186,250 17,198 1,674,136 Oppenheimer Global Opportunities Fund, Cl. Y 807,432 134,880 9,457 932,855 Oppenheimer Institutional Money Market Fund, Cl. E 144,934 22,559,258 22,704,192 -- Oppenheimer Main Street Fund, Cl. Y 2,212,683 311,442 25,009 2,499,116 Oppenheimer Main Street Opportunity Fund, Cl. Y 3,863,720 582,471 44,040 4,402,151 Oppenheimer Main Street Small Cap Fund, Cl. Y 2,432,908 551,064 29,170 2,954,802 Oppenheimer Value Fund, Cl. Y 3,075,162 437,424 35,581 3,477,005
DIVIDEND REALIZED VALUE INCOME LOSS - ------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y $108,505,302 $ -- $ 837,925 Oppenheimer Developing Markets Fund, Cl. Y 26,389,303 -- 767,077 Oppenheimer Global Fund, Cl. Y 104,231,726 -- 327,699 Oppenheimer Global Opportunities Fund, Cl. Y 26,138,610 -- 128,442 Oppenheimer Institutional Money Market Fund, Cl. E -- 6,304 -- Oppenheimer Main Street Fund, Cl. Y 79,746,784 -- 311,281 Oppenheimer Main Street Opportunity Fund, Cl. Y 53,310,044 -- 182,634 Oppenheimer Main Street Small Cap Fund, Cl. Y 56,052,608 -- 200,097 Oppenheimer Value Fund, Cl. Y 78,232,610 -- 270,755 --------------------------------------------- $532,606,987 $6,304 $3,025,910 =============================================
F1 | EQUITY INVESTOR FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- VALUATION INPUTS - -------------------------------------------------------------------------------- Various data inputs are used in determining the value of each of the Fund's investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards: 1) Level 1--quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange). 2) Level 2--inputs other than quoted prices that are observable for the asset (such as quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.). 3) Level 3--unobservable inputs (including the Manager's own judgments about assumptions that market participants would use in pricing the asset). The market value of the Fund's investments was determined based on the following inputs as of July 31, 2008:
INVESTMENTS IN OTHER FINANCIAL VALUATION DESCRIPTION SECURITIES INSTRUMENTS* ---------------------------------------------------------------------------------- Level 1--Quoted Prices $532,606,987 $-- Level 2--Other Significant Observable Inputs -- -- Level 3--Significant Unobservable Inputs -- -- -------------------------------- Total $532,606,987 $-- ================================
*Other financial instruments include options written, currency contracts, futures, forwards and swap contracts. Currency contracts and forwards are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract's value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swaps are reported at their market value at measurement date. SEE THE ACCOMPANYING NOTES FOR FURTHER DISCUSSION OF THE METHODS USED IN DETERMINING VALUE OF THE FUND'S INVESTMENTS, AND A SUMMARY OF CHANGES TO THE VALUATION TECHNIQUES, IF ANY, DURING THE REPORTING PERIOD. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F2 | EQUITY INVESTOR FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - -------------------------------------------------------------------------------- July 31, 2008 - ----------------------------------------------------------------------------------- ASSETS - ----------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments--affiliated companies (cost $602,994,764) $ 532,606,987 - ----------------------------------------------------------------------------------- Cash 283,199 - ----------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 624,790 Other 9,780 --------------- Total assets 533,524,756 - ----------------------------------------------------------------------------------- LIABILITIES - ----------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 773,673 Investments purchased 282,720 Distribution and service plan fees 109,826 Transfer and shareholder servicing agent fees 91,864 Trustees' compensation 28,962 Shareholder communications 4,450 Other 15,759 --------------- Total liabilities 1,307,254 - ----------------------------------------------------------------------------------- NET ASSETS $ 532,217,502 =============== - ----------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ----------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 47,953 - ----------------------------------------------------------------------------------- Additional paid-in capital 582,848,742 - ----------------------------------------------------------------------------------- Accumulated net investment loss (2,099,549) - ----------------------------------------------------------------------------------- Accumulated net realized gain on investments 21,808,133 - ----------------------------------------------------------------------------------- Net unrealized depreciation on investments (70,387,777) --------------- NET ASSETS $ 532,217,502 ===============
F3 | EQUITY INVESTOR FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued - -------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ---------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $274,611,918 and 24,614,867 shares of beneficial interest outstanding) $11.16 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $11.84 - ---------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $80,237,326 and 7,280,320 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 $115,446,009 and 10,487,459 shares of beneficial interest outstanding) $11.01 - ---------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $59,314,237 and 5,337,620 shares of beneficial interest outstanding) $11.11 - ---------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $2,608,012 and 232,336 shares of beneficial interest outstanding) $11.23
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F4 | EQUITY INVESTOR FUND STATEMENT OF OPERATIONS Unaudited - -------------------------------------------------------------------------------- For the Six Months Ended July 31, 2008 - ---------------------------------------------------------------------------- INVESTMENT INCOME - ---------------------------------------------------------------------------- Dividends from affiliated companies $ 6,304 - ---------------------------------------------------------------------------- Interest 6,265 -------------- Total investment income 12,569 - ---------------------------------------------------------------------------- EXPENSES - ---------------------------------------------------------------------------- Distribution and service plan fees: Class A 338,091 Class B 405,426 Class C 578,264 Class N 146,672 - ---------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 264,885 Class B 91,061 Class C 122,676 Class N 47,099 - ---------------------------------------------------------------------------- Shareholder communications: Class A 37,819 Class B 14,514 Class C 12,322 Class N 1,624 Class Y 11 - ---------------------------------------------------------------------------- Trustees' compensation 12,934 - ---------------------------------------------------------------------------- Custodian fees and expenses 1,819 - ---------------------------------------------------------------------------- Other 18,549 -------------- Total expenses 2,093,766 Less reduction to custodian expenses (133) Less waivers and reimbursements of expenses (159) -------------- Net expenses 2,093,474 - ---------------------------------------------------------------------------- NET INVESTMENT LOSS (2,080,905) - ---------------------------------------------------------------------------- REALIZED AND UNREALIZED LOSS - ---------------------------------------------------------------------------- Net realized loss on investments from affiliated companies (3,025,910) - ---------------------------------------------------------------------------- Net change in unrealized depreciation on investments (27,876,458) - ---------------------------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(32,983,273) ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F5 | EQUITY INVESTOR FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED JULY 31, 2008 JANUARY 31, (UNAUDITED) 2008 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- OPERATIONS - ---------------------------------------------------------------------------------------------------------------------- Net investment income (loss) $ (2,080,905) $ 11,840,755 - ---------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (3,025,910) 27,675,666 - ---------------------------------------------------------------------------------------------------------------------- Net change in unrealized depreciation (27,876,458) (62,666,904) -------------------------------- Net decrease in net assets resulting from operations (32,983,273) (23,150,483) - ---------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ---------------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A -- (6,834,536) Class B -- (1,518,294) Class C -- (2,199,214) Class N -- (1,303,777) Class Y -- (78,107) -------------------------------- -- (11,933,928) - ---------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A -- (4,212,810) Class B -- (1,300,283) Class C -- (1,796,530) Class N -- (866,546) Class Y -- (41,914) -------------------------------- -- (8,218,083) - ---------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ---------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 29,021,378 111,010,914 Class B 6,177,523 26,272,715 Class C 12,522,700 49,412,256 Class N 8,603,688 23,207,023 Class Y 231,927 733,708 -------------------------------- 56,557,216 210,636,616 - ---------------------------------------------------------------------------------------------------------------------- NET ASSETS - ---------------------------------------------------------------------------------------------------------------------- Total increase 23,573,943 167,334,122 - ---------------------------------------------------------------------------------------------------------------------- Beginning of period 508,643,559 341,309,437 -------------------------------- End of period (including accumulated net investment loss of $2,099,549 and $18,644, respectively) $ 532,217,502 $ 508,643,559 ================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F6 | EQUITY INVESTOR FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS A (UNAUDITED) 2008 2007 2006 1 - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.83 $ 12.63 $ 11.60 $ 10.00 - ----------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 (.03) .38 .25 .22 Net realized and unrealized gain (loss) (.64) (.65) 1.00 1.52 -------------------------------------------------------- Total from investment operations (.67) (.27) 1.25 1.74 - ----------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.33) (.18) (.12) Distributions from net realized gain -- (.20) (.04) (.02) -------------------------------------------------------- Total dividends and distributions to shareholders -- (.53) (.22) (.14) - ----------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.16 $ 11.83 $ 12.63 $ 11.60 ======================================================== - ----------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (5.66)% (2.45)% 10.85% 17.46% - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 274,612 $262,208 $ 173,539 $48,132 - ----------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 276,110 $239,348 $ 109,318 $17,321 - ----------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (0.47)% 2.87% 2.07% 2.47% Total expenses 5 0.48% 0.45% 0.50% 0.70% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.48% 0.45% 0.50% 0.68% - ----------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 3% 2% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.12% Year Ended January 31, 2008 1.08% Year Ended January 31, 2007 1.15% Period Ended January 31, 2006 1.39%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F7 | EQUITY INVESTOR FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS B (UNAUDITED) 2008 2007 2006 1 - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.73 $ 12.54 $ 11.55 $ 10.00 - ------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 (.07) .26 .14 .16 Net realized and unrealized gain (loss) (.64) (.63) 1.01 1.50 ----------------------------------------------------------- Total from investment operations (.71) (.37) 1.15 1.66 - ------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.24) (.12) (.09) Distributions from net realized gain -- (.20) (.04) (.02) ----------------------------------------------------------- Total dividends and distributions to shareholders -- (.44) (.16) (.11) - ------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.02 $ 11.73 $ 12.54 $ 11.55 =========================================================== - ------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (6.05)% (3.23)% 9.97% 16.70% - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 80,238 $ 79,187 $59,406 $ 19,078 - ------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 81,690 $ 75,204 $38,569 $ 7,050 - ------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (1.26)% 1.98% 1.19% 1.83% Total expenses 5 1.27% 1.25% 1.31% 1.53% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.27% 1.25% 1.31% 1.50% - ------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 3% 2% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.91% Year Ended January 31, 2008 1.88% Year Ended January 31, 2007 1.96% Period Ended January 31, 2006 2.22%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F8 | EQUITY INVESTOR FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS C (UNAUDITED) 2008 2007 2006 1 - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.72 $ 12.53 $ 11.54 $ 10.00 - ------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 (.07) .28 .14 .15 Net realized and unrealized gain (loss) (.64) (.64) 1.01 1.51 ----------------------------------------------------------- Total from investment operations (.71) (.36) 1.15 1.66 - ------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.25) (.12) (.10) Distributions from net realized gain -- (.20) (.04) (.02) ----------------------------------------------------------- Total dividends and distributions to shareholders -- (.45) (.16) (.12) - ------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.01 $ 11.72 $ 12.53 $ 11.54 =========================================================== - ------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (6.06)% (3.15)% 10.00% 16.64% - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 115,446 $ 110,383 $70,691 $ 20,034 - ------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 116,361 $ 98,098 $45,312 $ 6,131 - ------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (1.24)% 2.15% 1.23% 1.71% Total expenses 5 1.24% 1.23% 1.29% 1.48% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.24% 1.23% 1.29% 1.45% - ------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 3% 2% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.88% Year Ended January 31, 2008 1.86% Year Ended January 31, 2007 1.94% Period Ended January 31, 2006 2.17%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F9 | EQUITY INVESTOR FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS N (UNAUDITED) 2008 2007 2006 1 - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.80 $ 12.60 $ 11.59 $ 10.00 - ------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 (.04) .35 .29 .24 Net realized and unrealized gain (loss) (.65) (.65) .94 1.49 ----------------------------------------------------------- Total from investment operations (.69) (.30) 1.23 1.73 - ------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.30) (.18) (.12) Distributions from net realized gain -- (.20) (.04) (.02) ----------------------------------------------------------- Total dividends and distributions to shareholders -- (.50) (.22) (.14) - ------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.11 $ 11.80 $ 12.60 $ 11.59 =========================================================== - ------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (5.85)% (2.63)% 10.67% 17.34% - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 59,314 $ 54,336 $35,652 $ 5,608 - ------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 59,019 $ 48,745 $18,874 $ 1,717 - ------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income (loss) (0.67)% 2.67% 2.47% 2.62% Total expenses 5 0.68% 0.68% 0.69% 0.79% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.68% 0.68% 0.69% 0.78% - ------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 3% 2% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.32% Year Ended January 31, 2008 1.31% Year Ended January 31, 2007 1.34% Period Ended January 31, 2006 1.48%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F10 | EQUITY INVESTOR FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS Y (UNAUDITED) 2008 2007 2006 1 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.88 $ 12.67 $ 11.61 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 -- 3 .43 .29 .24 Net realized and unrealized gain (loss) (.65) (.64) 1.03 1.52 ------------------------------------------------------------ Total from investment operations (.65) (.21) 1.32 1.76 - -------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.38) (.22) (.13) Distributions from net realized gain -- (.20) (.04) (.02) ------------------------------------------------------------ Total dividends and distributions to shareholders -- (.58) (.26) (.15) - -------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.23 $ 11.88 $ 12.67 $ 11.61 ============================================================ - -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 4 (5.47)% (2.00)% 11.42% 17.69% - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 2,608 $ 2,530 $ 2,021 $ 711 - -------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 2,612 $ 2,508 $ 1,267 $ 331 - -------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 5 Net investment income (loss) (0.01)% 3.25% 2.46% 2.67% Total expenses 6 0.01% 0.02% 0.03% 0.30% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.01% 0.02% 0.03% 0.27% - -------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 3% 2% 2% 7%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Less than $0.005 per share. 4. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 5. Annualized for periods less than one full year. 6. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 0.65% Year Ended January 31, 2008 0.65% Year Ended January 31, 2007 0.68% Period Ended January 31, 2006 0.99%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F11 | EQUITY INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Portfolio Series (the "Trust") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Equity Investor Fund (the "Fund") is a series of the Trust whose investment objective is to seek long-term growth of capital. The Fund is a special type of mutual fund known as a "fund of funds" because it invests in other mutual funds. The Fund normally invests in a diversified portfolio of Oppenheimer mutual funds (individually, an "Underlying Fund" and collectively, the "Underlying Funds"). The Fund's investment adviser 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, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class 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 72 months after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares based upon the net asset value of the applicable Underlying Fund. For each Underlying fund, the net asset value per share for a class of shares is determined as of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading by dividing the value of the Underlying Fund's net assets attributable to that class by the number of outstanding shares of that class on that day. Effective for fiscal periods beginning after November 15, 2007, FASB Statement of Financial Accounting Standards No. 157, FAIR VALUE MEASUREMENTS, establishes a hierarchy for measuring fair value of assets and liabilities. As required by the standard, each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical assets or liabilities are classified as "Level 1", inputs other than quoted prices for an asset that are observable are classified as "Level 2" and unobservable inputs, including the Manager's judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as "Level 3". The inputs used for valuing assets and liabilities are not F12 | EQUITY INVESTOR FUND necessarily an indication of the risks associated with investing in those assets or liabilities. A table summarizing the Fund's investments under these levels of classification is included following the Statement of Investments. The Fund classifies each of its investments in the Underlying Funds as Level 1, without consideration as to the classification level of the specific investments held by the Underlying Funds. To determine their net asset values, the Underlying Funds' assets are valued primarily on the basis of current market quotations. In the absence of a readily available quoted market price, including for assets whose values have been materially affected by what the Manager identifies as a significant event occurring before the Underlying Fund's assets are valued but after the close of their respective exchanges, the Manager, acting through its internal valuation committee, in good faith determines the fair valuation of that Underlying Fund's assets using consistently applied procedures under the supervision of the Board of Trustees. The methodologies used for valuing assets are not necessarily an indication of the risks associated with investing in those Underlying Funds. The Underlying Funds' investments are classified as Level 1, Level 2 or Level 3 based on the inputs used in determining their value. Investments held by the Underlying Funds are typically classified as Level 1 or Level 2. Fair valued assets may be classified as "Level 3" if the valuation primarily reflects the Manager's own assumptions about the inputs that market participants would use in valuing such securities. There have been no significant changes to the fair valuation methodologies during the period. - -------------------------------------------------------------------------------- RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund's investments and therefore the value of the Fund's shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund. - -------------------------------------------------------------------------------- INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund ("IMMF") to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment adviser of IMMF. The Fund's investment in IMMF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of IMMF's Class E expenses, including its management fee. F13 | EQUITY INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / 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 on a daily basis 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 comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company 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. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund's tax return filings generally remain open for the three preceding fiscal reporting period ends. As of July 31, 2008, the Fund had available for federal income tax purposes an estimated capital loss carryforward of $3,025,910. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended July 31, 2008, it is estimated that the Fund will not utilize any capital loss carryforward to offset realized capital gains. 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 aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of July 31, 2008 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 602,994,764 ============= Gross unrealized appreciation $ 1,710,876 Gross unrealized depreciation (72,098,653) ------------- Net unrealized depreciation $ (70,387,777) =============
- -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the "Plan") for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the "Freeze Date") and existing F14 | EQUITY INVESTOR FUND Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the six months ended July 31, 2008, the Fund's projected benefit obligations, payments to retired trustees and accumulated liability were as follows: Projected Benefit Obligations Increased $ 7,478 Payments Made to Retired Trustees 6 Accumulated Liability as of July 31, 2008 21,024
The Board of Trustees has adopted a compensation deferral plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. 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. Amounts will be deferred until distributed in accordance to the compensation deferral plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager. - -------------------------------------------------------------------------------- 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 is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily. - -------------------------------------------------------------------------------- CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. F15 | EQUITY INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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. - -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. - -------------------------------------------------------------------------------- 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, 2008 SHARES AMOUNT SHARES AMOUNT - --------------------------------------------------------------------------------------------------------- CLASS A Sold 4,890,336 $ 57,391,479 10,914,889 $ 143,741,742 Dividends and/or distributions reinvested -- -- 830,164 10,636,288 Redeemed (2,436,470) (28,370,101) (3,324,723) (43,367,116) --------------------------------------------------------------- Net increase 2,453,866 $ 29,021,378 8,420,330 $ 111,010,914 =============================================================== - --------------------------------------------------------------------------------------------------------- CLASS B Sold 1,280,102 $ 14,835,409 2,909,331 $ 37,978,741 Dividends and/or distributions reinvested -- -- 215,120 2,734,266 Redeemed (747,860) (8,657,886) (1,113,188) (14,440,292) --------------------------------------------------------------- Net increase 532,242 $ 6,177,523 2,011,263 $ 26,272,715 =============================================================== - --------------------------------------------------------------------------------------------------------- CLASS C Sold 2,169,377 $ 25,142,608 5,030,455 $ 65,585,341 Dividends and/or distributions reinvested -- -- 304,091 3,858,873 Redeemed (1,100,792) (12,619,908) (1,555,496) (20,031,958) --------------------------------------------------------------- Net increase 1,068,585 $ 12,522,700 3,779,050 $ 49,412,256 ===============================================================
F16 | EQUITY INVESTOR FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, 2008 SHARES AMOUNT SHARES AMOUNT - --------------------------------------------------------------------------------------------------------- CLASS N Sold 1,374,646 $ 16,147,769 2,431,824 $ 31,836,415 Dividends and/or distributions reinvested -- -- 150,827 1,926,056 Redeemed (642,798) (7,544,081) (806,573) (10,555,448) -------------------------------------------------------------- Net increase 731,848 $ 8,603,688 1,776,078 $ 23,207,023 ============================================================== - --------------------------------------------------------------------------------------------------------- CLASS Y Sold 49,792 $ 587,928 117,125 $ 1,549,814 Dividends and/or distributions -- -- 9,336 119,962 reinvested Redeemed (30,450) (356,001) (73,009) (936,068) -------------------------------------------------------------- Net increase 19,342 $ 231,927 53,452 $ 733,708 ==============================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the six months ended July 31, 2008, were as follows:
PURCHASES SALES ------------------------------------------------------ Investment securities $ 70,556,853 $ 15,184,629
- -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from investments in the Underlying Funds and the Fund's investment in IMMF. The weighted indirect management fees collected from the Underlying Funds and the Fund's investment in IMMF, as a percent of average daily net assets of the Fund for the six months ended July 31, 2008 was 0.58%. - -------------------------------------------------------------------------------- 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 per account fee. For the six months ended July 31, 2008, the Fund paid $507,232 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 annually 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. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor") acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. F17 | EQUITY INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the "Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically 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 periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans (the "Plans") for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to compensate the Distributor for its services in connection with the distribution of those 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 each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the Plans at June 30, 2008 for Class B, Class C and Class N shares were $1,623,259, $1,024,483 and $538,714, respectively. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges ("CDSC") do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - -------------------------------------------------------------------------------------------------------------- July 31, 2008 $ 441,756 $ 9,809 $ 85,670 $ 12,865 $ 1,382
F18 | EQUITY INVESTOR FUND - -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a total expense limitation on the aggregate amount of combined direct (fund-of-funds level) and indirect expense so that "Total expenses" as a percentage of average daily net assets will not exceed the following annual rates: 1.45%, 2.20%, 2.20%, 1.70% and 1.20%, for Class A, Class B, Class C, Class N and Class Y, respectively. The Manager may modify or terminate this undertaking at any time without notice to shareholders. These expense limitations do not include extraordinary expenses and other expenses not incurred in the ordinary course of the Fund's business. Notwithstanding the foregoing limits, the Manager is not required to waive or reimburse Fund expenses in excess of indirect management fees earned from investments in Underlying Funds to assure that expenses do not exceed those limits. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time. Prior to June 1, 2008, the Manager waived fees and/or reimbursed Fund expenses in an amount equal to the indirect management fees incurred through the Fund's investment in IMMF. During the six months ended July 31, 2008, the Manager waived $159 for IMMF management fees. - -------------------------------------------------------------------------------- 5. RECENT ACCOUNTING PRONOUNCEMENT In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement on Financial Accounting Standards ("SFAS") No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This standard requires enhanced disclosures about derivative and hedging activities, including qualitative disclosures about how and why the Fund uses derivative instruments, how these activities are accounted for, and their effect on the Fund's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, management is evaluating the implications of SFAS No. 161 and its impact on the Fund's financial statements and related disclosures. F19 | EQUITY INVESTOR FUND THIS PAGE INTENTIONALLY LEFT BLANK. F20 | EQUITY INVESTOR FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may 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 1-800-SEC-0330. 15 | EQUITY INVESTOR FUND JULY 31, 2008 - -------------------------------------------------------------------------------- Active Allocation Management Fund Commentaries A Series of Oppenheimer Portfolio Series and Semiannual Report - -------------------------------------------------------------------------------- MANAGEMENT COMMENTARIES An Interview with Your Fund's Managers SEMIANNUAL REPORT Listing of Investments Financial Statements [OPPENHEIMERFUNDS LOGO] TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- ASSET CLASS ALLOCATION [PIE CHART] U.S. Equity Funds 51.2% Fixed Income Funds 25.9 Global Equity Funds 17.5 Alternative Investment Fund 5.1 Money Market Fund 0.3
Fund holdings and allocations are subject to change. Percentages are as of July 31, 2008, and are based on the total market value of investments in affiliated companies. 10 | ACTIVE ALLOCATION FUND NOTES - -------------------------------------------------------------------------------- Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. The Fund's investment strategy and focus can change over time. The mention of specific holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 4/5/05. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. 11 | ACTIVE ALLOCATION FUND NOTES - -------------------------------------------------------------------------------- CLASS Y shares of the Fund were first publicly offered on 4/5/05. Class Y shares are offered only to certain institutional investors under a special agreement with the Distributor, and to present or former officers, directors, trustees or employees (and their eligible family members) of the Fund, the Manager, its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 12 | ACTIVE ALLOCATION FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended July 31, 2008. ACTUAL EXPENSES. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts 13 | ACTIVE ALLOCATION FUND FUND EXPENSES Continued - -------------------------------------------------------------------------------- valued at less than $500.00 (subject to exceptions described in the Statement of Additional Information). Therefore, the "hypothetical" section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED ACTUAL FEBRUARY 1, 2008 JULY 31, 2008 JULY 31, 2008 - ---------------------------------------------------------------------------------- Class A $ 1,000.00 $ 947.70 $ 2.42 - ---------------------------------------------------------------------------------- Class B 1,000.00 943.70 6.25 - ---------------------------------------------------------------------------------- Class C 1,000.00 944.50 6.11 - ---------------------------------------------------------------------------------- Class N 1,000.00 947.50 3.44 - ---------------------------------------------------------------------------------- Class Y 1,000.00 949.70 0.68 HYPOTHETICAL (5% return before expenses) - ---------------------------------------------------------------------------------- Class A 1,000.00 1,022.38 2.52 - ---------------------------------------------------------------------------------- Class B 1,000.00 1,018.45 6.49 - ---------------------------------------------------------------------------------- Class C 1,000.00 1,018.60 6.34 - ---------------------------------------------------------------------------------- Class N 1,000.00 1,021.33 3.57 - ---------------------------------------------------------------------------------- Class Y 1,000.00 1,024.17 0.70
Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Those annualized expense ratios, excluding all underlying fund expenses, based on the 6-month period ended July 31, 2008 are as follows:
CLASS EXPENSE RATIOS - --------------------------- Class A 0.50% - --------------------------- Class B 1.29 - --------------------------- Class C 1.26 - --------------------------- Class N 0.71 - --------------------------- Class Y 0.14
The expense ratios reflect reduction to custodian expenses and voluntary waivers or reimbursements of expenses by the Fund's Manager that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable. 14 | ACTIVE ALLOCATION FUND STATEMENT OF INVESTMENTS July 31, 2008 / Unaudited - --------------------------------------------------------------------------------
SHARES VALUE - ------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------ INVESTMENT COMPANIES--99.4% 1 - ------------------------------------------------------------------------------------------------ ALTERNATIVE INVESTMENT FUND--5.0% Oppenheimer Real Estate Fund, Cl. Y 7,045,325 $ 133,649,801 - ------------------------------------------------------------------------------------------------ FIXED INCOME FUNDS--25.8% Oppenheimer Champion Income Fund, Cl. Y 18,179,241 140,525,539 - ------------------------------------------------------------------------------------------------ Oppenheimer Core Bond Fund, Cl. Y 31,671,767 299,298,193 - ------------------------------------------------------------------------------------------------ Oppenheimer International Bond Fund, Cl. Y 19,587,439 126,926,608 - ------------------------------------------------------------------------------------------------ Oppenheimer U.S. Government Trust, Cl. Y 12,312,905 115,248,784 ---------------- 681,999,124 - ------------------------------------------------------------------------------------------------ GLOBAL EQUITY FUNDS--17.4% Oppenheimer Developing Markets Fund, Cl. Y 482,815 20,736,921 - ------------------------------------------------------------------------------------------------ Oppenheimer Global Fund, Cl. Y 3,908,703 243,355,860 - ------------------------------------------------------------------------------------------------ Oppenheimer Global Opportunities Fund, Cl. Y 4,898,207 137,247,754 - ------------------------------------------------------------------------------------------------ Oppenheimer International Growth Fund, Cl. Y 792,950 21,290,722 - ------------------------------------------------------------------------------------------------ Oppenheimer International Small Company Fund, Cl. Y 940,079 18,378,540 - ------------------------------------------------------------------------------------------------ Oppenheimer Quest International Value Fund, Inc., Cl. A 1,167,325 18,945,681 ---------------- 459,955,478 - ------------------------------------------------------------------------------------------------ MONEY MARKET FUND--0.3% Oppenheimer Institutional Money Market Fund, Cl. E, 2.67% 2 8,932,085 8,932,085 - ------------------------------------------------------------------------------------------------ U.S. EQUITY FUNDS--50.9% Oppenheimer Capital Appreciation Fund, Cl. Y 7,810,377 366,150,444 - ------------------------------------------------------------------------------------------------ Oppenheimer Main Street Fund, Cl. Y 7,661,309 244,472,360 - ------------------------------------------------------------------------------------------------ Oppenheimer Main Street Opportunity Fund, Cl. Y 11,706,240 141,762,566 - ------------------------------------------------------------------------------------------------ Oppenheimer Main Street Small Cap Fund, Cl. Y 7,377,129 139,944,140 - ------------------------------------------------------------------------------------------------ Oppenheimer MidCap Fund, Cl. Y 3 2,191,447 39,270,743 - ------------------------------------------------------------------------------------------------ Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 1,232,785 38,586,174 - ------------------------------------------------------------------------------------------------ Oppenheimer Value Fund, Cl. Y 16,756,919 377,030,667 ---------------- 1,347,217,094 - ------------------------------------------------------------------------------------------------ TOTAL INVESTMENTS, AT VALUE (COST $2,946,881,980) 99.4% 2,631,753,582 - ------------------------------------------------------------------------------------------------ OTHER ASSETS NET OF LIABILITIES 0.6 16,085,344 ------------------------------ NET ASSETS 100.0% $2,647,838,926 ==============================
F1 | ACTIVE ALLOCATION FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended July 31, 2008, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES JANUARY 31, 2008 ADDITIONS REDUCTIONS JULY 31, 2008 - --------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y 7,395,404 476,094 61,121 7,810,377 Oppenheimer Champion Income Fund, Cl. Y 16,515,149 1,804,781 140,689 18,179,241 Oppenheimer Core Bond Fund, Cl. Y 29,099,763 2,811,522 239,518 31,671,767 Oppenheimer Developing Markets Fund, Cl. Y 457,641 28,978 3,804 482,815 Oppenheimer Global Fund, Cl. Y 3,691,578 249,836 32,711 3,908,703 Oppenheimer Global Opportunities Fund, Cl. Y 4,621,178 319,036 42,007 4,898,207 Oppenheimer Institutional Money Market Fund, Cl. E 22,664,856 129,304,674 143,037,445 8,932,085 Oppenheimer International Bond Fund, Cl. Y 18,223,098 1,504,800 140,459 19,587,439 Oppenheimer International Growth Fund, Cl. Y 753,125 45,808 5,983 792,950 Oppenheimer International Small Company Fund, Cl. Y 890,431 57,224 7,576 940,079 Oppenheimer Main Street Fund, Cl. Y 7,233,544 491,515 63,750 7,661,309 Oppenheimer Main Street Opportunity Fund, Cl. Y 11,047,198 757,289 98,247 11,706,240 Oppenheimer Main Street Small Cap Fund, Cl. Y 6,936,180 506,251 65,302 7,377,129 Oppenheimer MidCap Fund, Cl. Y 2,069,622 139,844 18,019 2,191,447 Oppenheimer Quest International Value Fund, Inc., Cl. A 1,105,423 71,474 9,572 1,167,325 Oppenheimer Real Estate Fund, Cl. Y 6,562,660 546,988 64,323 7,045,325 Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 1,165,687 77,236 10,138 1,232,785 Oppenheimer U.S. Government Trust, Cl. Y 11,382,541 1,021,653 91,289 12,312,905 Oppenheimer Value Fund, Cl. Y 15,820,161 1,077,094 140,336 16,756,919
DIVIDEND REALIZED VALUE INCOME LOSS - --------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y $ 366,150,444 $ -- $ 488,664 Oppenheimer Champion Income Fund, Cl. Y 140,525,539 5,793,156 190,600 Oppenheimer Core Bond Fund, Cl. Y 299,298,193 9,259,357 131,057 Oppenheimer Developing Markets Fund, Cl. Y 20,736,921 -- 21,562 Oppenheimer Global Fund, Cl. Y 243,355,860 -- 604,495 Oppenheimer Global Opportunities Fund, Cl. Y 137,247,754 -- 563,295 Oppenheimer Institutional Money Market Fund, Cl. E 8,932,085 424,642 -- Oppenheimer International Bond Fund, Cl. Y 126,926,608 2,729,238 32,077 Oppenheimer International Growth Fund, Cl. Y 21,290,722 -- 11,101 Oppenheimer International Small Company Fund, Cl. Y 18,378,540 -- 106,189 Oppenheimer Main Street Fund, Cl. Y 244,472,360 -- 782,650 Oppenheimer Main Street Opportunity Fund, Cl. Y 141,762,566 -- 401,805 Oppenheimer Main Street Small Cap Fund, Cl. Y 139,944,140 -- 451,072 Oppenheimer MidCap Fund, Cl. Y 39,270,743 -- 19,109 Oppenheimer Quest International Value Fund, Inc., Cl. A 18,945,681 -- 34,757 Oppenheimer Real Estate Fund, Cl. Y 133,649,801 1,075,739 433,136 Oppenheimer Small- & Mid- Cap Value Fund, Cl. Y 38,586,174 -- 111,009
F2 | ACTIVE ALLOCATION FUND
DIVIDEND REALIZED VALUE INCOME LOSS - --------------------------------------------------------------------------------------------------------------------------------- Oppenheimer U.S. Government Trust, Cl. Y $ 115,248,784 $ 2,962,240 $ 22,334 Oppenheimer Value Fund, Cl. Y 377,030,667 -- 1,048,959 --------------------------------------------------- $2,631,753,582 $22,244,372 $5,453,871 ===================================================
2. Rate shown is the 7-day yield as of July 31, 2008. 3. Non-income producing security. - -------------------------------------------------------------------------------- VALUATION INPUTS - -------------------------------------------------------------------------------- Various data inputs are used in determining the value of each of the Fund's investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards: 1) Level 1--quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange). 2) Level 2--inputs other than quoted prices that are observable for the asset (such as quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.). 3) Level 3--unobservable inputs (including the Manager's own judgments about assumptions that market participants would use in pricing the asset). The market value of the Fund's investments was determined based on the following inputs as of July 31, 2008:
INVESTMENTS IN OTHER FINANCIAL VALUATION DESCRIPTION SECURITIES INSTRUMENTS* ------------------------------------------------------------------------------------- Level 1--Quoted Prices $2,631,753,582 $ 3,425,889 Level 2--Other Significant Observable Inputs -- (2,282,159) Level 3--Significant Unobservable Inputs -- -- ----------------------------------- Total $2,631,753,582 $ 1,143,730 ===================================
*Other financial instruments include options written, currency contracts, futures, forwards and swap contracts. Currency contracts and forwards are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract's value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swaps are reported at their market value at measurement date. SEE THE ACCOMPANYING NOTES FOR FURTHER DISCUSSION OF THE METHODS USED IN DETERMINING VALUE OF THE FUND'S INVESTMENTS, AND A SUMMARY OF CHANGES TO THE VALUATION TECHNIQUES, IF ANY, DURING THE REPORTING PERIOD. - -------------------------------------------------------------------------------- FUTURES CONTRACTS AS OF JULY 31, 2008 ARE AS FOLLOWS: - --------------------------------------------------------------------------------
UNREALIZED NUMBER OF EXPIRATION APPRECIATION CONTRACT DESCRIPTION BUY/SELL CONTRACTS DATE VALUE (DEPRECIATION) - --------------------------------------------------------------------------------------------------------------- MidCap 400 Index Buy 64 9/18/08 $ 25,724,800 $ (2,216,057) Standard & Poor's 500 E-Mini Sell 2,085 9/19/08 132,095,175 3,331,097 U.S. Treasury Nts., 10 yr. Buy 1,161 9/19/08 133,315,453 945,447 --------------- $ 2,060,487 ===============
F3 | ACTIVE ALLOCATION FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS Continued - -------------------------------------------------------------------------------- CREDIT DEFAULT SWAP CONTRACTS AS OF JULY 31, 2008 ARE AS FOLLOWS: - --------------------------------------------------------------------------------
PAY/ BUY/SELL NOTIONAL RECEIVE PREMIUM SWAP CREDIT AMOUNT FIXED TERMINATION RECEIVED/ COUNTERPARTY REFERENCE ENTITY PROTECTION (000s) RATE DATE (PAID) VALUE - ---------------------------------------------------------------------------------------------------------------------------- Goldman Sachs International CDX.NA.IG.10 Index Buy $ 26,500 1.55% 6/20/13 $ 462,481 $ (334,470) - ---------------------------------------------------------------------------------------------------------------------------- Morgan Stanley Capital Services, Inc. CDX.NA.HY.10 Index Sell 26,500 5.00 6/20/13 1,514,548 (1,287,980) ---------------------------- $1,977,029 $(1,622,450) ============================
- -------------------------------------------------------------------------------- TOTAL RETURN SWAP CONTRACTS AS OF JULY 31, 2008 ARE AS FOLLOWS: - --------------------------------------------------------------------------------
SWAP NOTIONAL PAID BY RECEIVED BY TERMINATION COUNTERPARTY AMOUNT THE FUND THE FUND DATE VALUE - ------------------------------------------------------------------------------------------------------------------- Citibank NA, New York: One-Month USD BBA LIBOR minus 30 basis points and if negative, the If positive, absolute value of the Total Return the Total Return of the S&P 500/ of the S&P 500/ Citigroup Value Citigroup Value $ 2,934,682 Total Return Index Total Return Index 4/8/09 $ (72,450) One-Month USD BBA LIBOR minus 30 basis points and if negative, the If positive, absolute value of the Total Return the Total Return of the S&P 500/ of the S&P 500/ Citigroup Value Citigroup Value 27,189,774 Total Return Index Total Return Index 4/8/09 (587,259) ------------ $(659,709) ============
Abbreviation is as follows: BBA LIBOR British Bankers' Association London-Interbank Offered Rate SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F4 | ACTIVE ALLOCATION FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - -------------------------------------------------------------------------------- July 31, 2008 - --------------------------------------------------------------------------------------------------------- ASSETS - --------------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments--affiliated companies (cost $2,946,881,980) $2,631,753,582 - --------------------------------------------------------------------------------------------------------- Cash 1,037,052 - --------------------------------------------------------------------------------------------------------- Cash used for collateral on futures 18,013,000 - --------------------------------------------------------------------------------------------------------- Receivables and other assets: Dividends 3,865,076 Futures margins 3,425,889 Shares of beneficial interest sold 3,407,778 Other 44,373 ----------------- Total assets 2,661,546,750 - --------------------------------------------------------------------------------------------------------- LIABILITIES - --------------------------------------------------------------------------------------------------------- Swaps, at value (premiums received $1,977,029) 2,282,159 - --------------------------------------------------------------------------------------------------------- Payables and other liabilities: Shares of beneficial interest redeemed 6,455,468 Investments purchased 3,866,954 Distribution and service plan fees 531,175 Transfer and shareholder servicing agent fees 312,366 Trustees' compensation 155,016 Shareholder communications 76,700 Other 27,986 ----------------- Total liabilities 13,707,824 - --------------------------------------------------------------------------------------------------------- NET ASSETS $2,647,838,926 ================= - --------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - --------------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 248,941 - --------------------------------------------------------------------------------------------------------- Additional paid-in capital 2,871,687,378 - --------------------------------------------------------------------------------------------------------- Accumulated net investment income 14,156,294 - --------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments and foreign currency transactions 75,119,354 - --------------------------------------------------------------------------------------------------------- Net unrealized depreciation on investments and translation of assets and liabilities denominated in foreign currencies (313,373,041) ----------------- NET ASSETS $2,647,838,926 =================
F5 | ACTIVE ALLOCATION FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited / Continued - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $1,412,843,644 and 132,152,869 shares of beneficial interest outstanding) $10.69 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $11.34 - ------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $436,310,569 and 41,270,355 shares of beneficial interest outstanding) $10.57 - ------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $628,132,713 and 59,502,186 shares of beneficial interest outstanding) $10.56 - ------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $166,711,843 and 15,659,185 shares of beneficial interest outstanding) $10.65 - ------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $3,840,157 and 356,860 shares of beneficial interest outstanding) $10.76
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F6 | ACTIVE ALLOCATION FUND STATEMENT OF OPERATIONS Unaudited - -------------------------------------------------------------------------------- For the Six Months Ended July 31, 2008 - ---------------------------------------------------------------- INVESTMENT INCOME - ---------------------------------------------------------------- Dividends from affiliated companies $ 22,244,372 - ---------------------------------------------------------------- Interest 85,239 --------------- Total investment income 22,329,611 - ---------------------------------------------------------------- EXPENSES - ---------------------------------------------------------------- Distribution and service plan fees: Class A 1,769,949 Class B 2,235,535 Class C 3,201,848 Class N 417,992 - ---------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 900,790 Class B 354,054 Class C 435,595 Class N 85,095 Class Y 445 - ---------------------------------------------------------------- Shareholder communications: Class A 113,954 Class B 57,509 Class C 49,763 Class N 4,085 Class Y 71 - ---------------------------------------------------------------- Asset allocation fees 1,348,207 - ---------------------------------------------------------------- Trustees' compensation 66,261 - ---------------------------------------------------------------- Custodian fees and expenses 7,386 - ---------------------------------------------------------------- Other 40,194 --------------- Total expenses 11,088,733 Less reduction to custodian expenses (2,594) Less waivers and reimbursements of expenses (18,195) --------------- Net expenses 11,067,944 - ---------------------------------------------------------------- NET INVESTMENT INCOME 11,261,667
F7 | ACTIVE ALLOCATION FUND STATEMENT OF OPERATIONS Unaudited / Continued - -------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) - ------------------------------------------------------------------------------------------ Net realized gain (loss) on: Investments from affiliated companies $ (5,453,871) Closing and expiration of futures contracts (4,493,898) Foreign currency transactions (429,504) Swap contracts 3,586,243 ---------------- Net realized loss (6,791,030) - ------------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) on: Investments (156,323,989) Translation of assets and liabilities denominated in foreign currencies 204,055 Futures contracts 158,297 Swap contracts 2,435,519 ---------------- Net change in unrealized depreciation (153,526,118) - ------------------------------------------------------------------------------------------ NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(149,055,481) ================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F8 | ACTIVE ALLOCATION FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED JULY 31, 2008 JANUARY 31, (UNAUDITED) 2008 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- OPERATIONS - -------------------------------------------------------------------------------------------------------------------- Net investment income $ 11,261,667 $ 77,241,153 - -------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (6,791,030) 115,228,800 - -------------------------------------------------------------------------------------------------------------------- Net change in unrealized depreciation (153,526,118) (277,135,980) ------------------------------------ Net decrease in net assets resulting from operations (149,055,481) (84,666,027) - -------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - -------------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A -- (49,762,444) Class B -- (13,063,856) Class C -- (18,702,863) Class N -- (5,468,177) Class Y -- (158,040) ------------------------------------ -- (87,155,380) - -------------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A -- (19,567,662) Class B -- (6,468,393) Class C -- (9,012,023) Class N -- (2,267,194) Class Y -- (57,016) ------------------------------------ -- (37,372,288) - -------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - -------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 93,526,804 551,288,066 Class B 12,755,889 134,492,010 Class C 33,797,484 248,464,306 Class N 14,352,651 65,148,152 Class Y 252,335 1,324,654 ------------------------------------ 154,685,163 1,000,717,188 - -------------------------------------------------------------------------------------------------------------------- NET ASSETS - -------------------------------------------------------------------------------------------------------------------- Total increase 5,629,682 791,523,493 - -------------------------------------------------------------------------------------------------------------------- Beginning of period 2,642,209,244 1,850,685,751 ------------------------------------ End of period (including accumulated net investment income of $14,156,294 and $2,894,627, respectively) $2,647,838,926 $2,642,209,244 ====================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F9 | ACTIVE ALLOCATION FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS A (UNAUDITED) 2008 2007 2006 1 - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.28 $ 12.05 $ 11.10 $ 10.00 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .06 .44 .35 .43 Net realized and unrealized gain (loss) (.65) (.61) .89 .89 ------------------------------------------------------------------ Total from investment operations (.59) (.17) 1.24 1.32 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.43) (.24) (.20) Distributions from net realized gain -- (.17) (.05) (.02) ------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- (.60) (.29) (.22) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.69 $ 11.28 $ 12.05 $ 11.10 ================================================================== - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (5.23)% (1.69)% 11.14% 13.31% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 1,412,844 $ 1,396,770 $ 956,520 $ 293,578 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 1,442,559 $ 1,267,499 $ 605,517 $ 112,224 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 1.16% 3.54% 3.10% 4.94% Total expenses 5 0.50% 0.48% 0.51% 0.56% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.50% 0.48% 0.50% 0.55% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 1% 18% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.12% Year Ended January 31, 2008 1.11% Year Ended January 31, 2007 1.16% Period Ended January 31, 2006 1.28%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F10 | ACTIVE ALLOCATION FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS B (UNAUDITED) 2008 2007 2006 1 - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.20 $ 11.97 $ 11.07 $ 10.00 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .02 .33 .26 .36 Net realized and unrealized gain (loss) (.65) (.59) .86 .91 ------------------------------------------------------------------ Total from investment operations (.63) (.26) 1.12 1.27 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.34) (.17) (.18) Distributions from net realized gain -- (.17) (.05) (.02) ------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- (.51) (.22) (.20) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.57 $ 11.20 $ 11.97 $ 11.07 ================================================================== - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (5.63)% (2.40)% 10.15% 12.72% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 436,310 $ 449,130 $ 349,024 $ 115,629 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 450,731 $ 433,217 $ 229,365 $ 46,284 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.37% 2.64% 2.26% 4.06% Total expenses 5 1.29% 1.27% 1.29% 1.37% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.29% 1.27% 1.29% 1.34% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 1% 18% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.91% Year Ended January 31, 2008 1.90% Year Ended January 31, 2007 1.94% Period Ended January 31, 2006 2.09%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F11 | ACTIVE ALLOCATION FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS C (UNAUDITED) 2008 2007 2006 1 - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.18 $ 11.96 $ 11.06 $ 10.00 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .02 .34 .27 .37 Net realized and unrealized gain (loss) (.64) (.60) .86 .89 ------------------------------------------------------------------ Total from investment operations (.62) (.26) 1.13 1.26 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.35) (.18) (.18) Distributions from net realized gain -- (.17) (.05) (.02) ------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- (.52) (.23) (.20) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.56 $ 11.18 $ 11.96 $ 11.06 ================================================================== - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (5.55)% (2.41)% 10.21% 12.66% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 628,133 $ 630,990 $ 433,213 $ 125,622 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 645,082 $ 577,347 $ 272,038 $ 45,647 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.40% 2.77% 2.34% 4.18% Total expenses 5 1.26% 1.24% 1.27% 1.33% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.26% 1.24% 1.26% 1.31% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 1% 18% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.88% Year Ended January 31, 2008 1.87% Year Ended January 31, 2007 1.92% Period Ended January 31, 2006 2.05%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F12 | ACTIVE ALLOCATION FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS N (UNAUDITED) 2008 2007 2006 1 - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.24 $ 12.02 $ 11.09 $ 10.00 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .05 .41 .35 .46 Net realized and unrealized gain (loss) (.64) (.61) .86 .85 ------------------------------------------------------------------ Total from investment operations (.59) (.20) 1.21 1.31 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.41) (.23) (.20) Distributions from net realized gain -- (.17) (.05) (.02) ------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- (.58) (.28) (.22) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.65 $ 11.24 $ 12.02 $ 11.09 ================================================================== - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (5.25)% (1.95)% 10.88% 13.18% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 166,712 $ 161,530 $ 109,146 $ 28,345 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 169,080 $ 145,988 $ 62,929 $ 9,156 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 0.95% 3.31% 3.07% 5.28% Total expenses 5 0.71% 0.70% 0.70% 0.73% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.71% 0.69% 0.70% 0.72% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 1% 18% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.33% Year Ended January 31, 2008 1.33% Year Ended January 31, 2007 1.35% Period Ended January 31, 2006 1.45%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F13 | ACTIVE ALLOCATION FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS Y (UNAUDITED) 2008 2007 2006 1 - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.33 $ 12.10 $ 11.13 $ 10.00 - --------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .08 .50 .44 .39 Net realized and unrealized gain (loss) (.65) (.63) .85 .97 ------------------------------------------------------------------ Total from investment operations (.57) (.13) 1.29 1.36 - --------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.47) (.27) (.21) Distributions from net realized gain -- (.17) (.05) (.02) ------------------------------------------------------------------ Total dividends and/or distributions to shareholders -- (.64) (.32) (.23) - --------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.76 $ 11.33 $ 12.10 $ 11.13 ================================================================== - --------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (5.03)% (1.38)% 11.56% 13.72% - --------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 3,840 $ 3,789 $ 2,783 $ 482 - --------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 3,883 $ 3,663 $ 1,317 $ 196 - --------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 1.52% 3.98% 3.79% 4.44% Total expenses 5 0.14% 0.13% 0.11% 0.33% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.14% 0.13% 0.11% 0.21% - --------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 1% 18% 40% 90%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 0.76% Year Ended January 31, 2008 0.76% Year Ended January 31, 2007 0.76% Period Ended January 31, 2006 1.05%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F14 | ACTIVE ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Portfolio Series (the "Trust") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Active Allocation Fund (the "Fund") is a series of the Trust whose investment objective is to seek long-term growth of capital with a secondary objective of current income. The Fund is a special type of mutual fund known as a "fund of funds" because it invests in other mutual funds. The Fund normally invests in a diversified portfolio of Oppenheimer mutual funds (individually, an "Underlying Fund" and collectively, the "Underlying Funds"). The Fund's investment adviser 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, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class 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 72 months after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares based upon the net asset value of the applicable Underlying Fund. For each Underlying fund, the net asset value per share for a class of shares is determined as of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading by dividing the value of the Underlying Fund's net assets attributable to that class by the number of outstanding shares of that class on that day. Effective for fiscal periods beginning after November 15, 2007, FASB Statement of Financial Accounting Standards No. 157, FAIR VALUE MEASUREMENTS, establishes a hierarchy for measuring fair value of assets and liabilities. As required by the standard, each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical assets or liabilities are classified as "Level 1", inputs other than quoted prices for an asset that are observable are classified as "Level 2" and unobservable inputs, including the Manager's judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as "Level 3". The inputs used for valuing assets and liabilities are not necessarily an indication of the risks associated with investing in those assets or liabilities. A table F15 | ACTIVE ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued summarizing the Fund's investments under these levels of classification is included following the Statement of Investments. The Fund classifies each of its investments in the Underlying Funds as Level 1, without consideration as to the classification level of the specific investments held by the Underlying Funds. To determine their net asset values, the Underlying Funds' assets are valued primarily on the basis of current market quotations. In the absence of a readily available quoted market price, including for assets whose values have been materially affected by what the Manager identifies as a significant event occurring before the Underlying Fund's assets are valued but after the close of their respective exchanges, the Manager, acting through its internal valuation committee, in good faith determines the fair valuation of that Underlying Fund's assets using consistently applied procedures under the supervision of the Board of Trustees. The methodologies used for valuing assets are not necessarily an indication of the risks associated with investing in those Underlying Funds. The Underlying Funds' investments are classified as Level 1, Level 2 or Level 3 based on the inputs used in determining their value. Investments held by the Underlying Funds are typically classified as Level 1 or Level 2. Fair valued assets may be classified as "Level 3" if the valuation primarily reflects the Manager's own assumptions about the inputs that market participants would use in valuing such securities. There have been no significant changes to the fair valuation methodologies during the period. - -------------------------------------------------------------------------------- RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund's investments and therefore the value of the Fund's shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund. - -------------------------------------------------------------------------------- FOREIGN CURRENCY TRANSLATION. The Fund's accounting records are maintained in U.S. dollars. The values of securities denominated in foreign currencies and amounts related to the purchase and sale of foreign securities and foreign investment income are translated into U.S. dollars as of the close of the Exchange, normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading. Foreign exchange rates may be valued primarily using a reliable bank, dealer or service authorized by the Board of Trustees. Reported net realized gains and losses from foreign currency transactions arise from sales of portfolio securities, sales and maturities of short-term securities, sales of foreign currencies, exchange rate fluctuations between the trade and settlement dates on securities transactions, and the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized appreciation and depreciation on the translation of assets and liabilities denominated in foreign currencies arise from changes in F16 | ACTIVE ALLOCATION FUND the values of assets and liabilities, including investments in securities at fiscal period end, resulting from changes in exchange rates. 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 and reported with all other foreign currency gains and losses in the Fund's Statement of Operations. - -------------------------------------------------------------------------------- INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund ("IMMF") to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment adviser of IMMF. The Fund's investment in IMMF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of IMMF's Class E expenses, including its management fee. - -------------------------------------------------------------------------------- INVESTMENTS WITH OFF-BALANCE SHEET MARKET RISK. The Fund enters into financial instrument transactions (such as swaps, futures, options and other derivatives) that may have off-balance sheet market risk. Off-balance sheet market risk exists when the maximum potential loss on a particular financial instrument is greater than the value of such financial instrument, as reflected in the Fund's Statement of Assets and Liabilities. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis 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 comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company 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. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund's tax return filings generally remain open for the three preceding fiscal reporting period ends. During the fiscal year ended January 31, 2008, the Fund did not utilize any capital loss carryforward to offset capital gains realized in that fiscal year. As of January 31, 2008, the Fund had available for federal income tax purposes post-October foreign currency losses of $276,537. As of July 31, 2008, the Fund had available for federal income tax purposes an estimated capital loss carryforward of $7,067,567 expiring by 2016. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses F17 | ACTIVE ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued deferred under tax accounting rules to the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended July 31, 2008, it is estimated that the Fund will not utilize any capital loss carryforward to offset realized capital gains. 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 aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of July 31, 2008 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $2,957,725,896 Federal tax cost of other investments 22,907,562 -------------- Total federal tax cost $2,980,633,458 ============== Gross unrealized appreciation $ 17,672,097 Gross unrealized depreciation (339,329,691) -------------- Net unrealized depreciation $ (321,657,594) ==============
- -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the "Plan") for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the six months ended July 31, 2008, the Fund's projected benefit obligations, payments to retired trustees and accumulated liability were as follows: Projected Benefit Obligations Increased $ 38,145 Payments Made to Retired Trustees 32 Accumulated Liability as of July 31, 2008 112,308
The Board of Trustees has adopted a compensation deferral plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as F18 | ACTIVE ALLOCATION FUND though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. 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. Amounts will be deferred until distributed in accordance to the compensation deferral plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager. - -------------------------------------------------------------------------------- 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 is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily. - -------------------------------------------------------------------------------- CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item, if applicable, represents earnings on cash balances maintained by the Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. F19 | ACTIVE ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, 2008 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------------------------- CLASS A Sold 21,959,624 $ 245,423,138 55,772,313 $ 692,918,762 Dividends and/or distributions reinvested -- -- 5,622,995 66,806,258 Redeemed (13,664,996) (151,896,334) (16,930,276) (208,436,954) ------------------------------------------------------------------ Net increase 8,294,628 $ 93,526,804 44,465,032 $ 551,288,066 ================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- CLASS B Sold 6,284,430 $ 69,521,550 16,273,470 $ 200,111,397 Dividends and/or distributions reinvested -- -- 1,608,626 18,997,933 Redeemed (5,130,419) (56,765,661) (6,916,902) (84,617,320) ------------------------------------------------------------------ Net increase 1,154,011 $ 12,755,889 10,965,194 $ 134,492,010 ================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- CLASS C Sold 9,480,401 $ 104,506,003 25,614,816 $ 314,499,898 Dividends and/or distributions reinvested -- -- 2,206,578 26,014,894 Redeemed (6,430,144) (70,708,519) (7,591,141) (92,050,486) ------------------------------------------------------------------ Net increase 3,050,257 $ 33,797,484 20,230,253 $ 248,464,306 ================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- CLASS N Sold 3,075,076 $ 34,095,739 6,924,608 $ 85,551,101 Dividends and/or distributions reinvested -- -- 609,598 7,223,732 Redeemed (1,784,341) (19,743,088) (2,248,973) (27,626,681) ------------------------------------------------------------------ Net increase 1,290,735 $ 14,352,651 5,285,233 $ 65,148,152 ================================================================== - ----------------------------------------------------------------------------------------------------------------------------------- CLASS Y Sold 83,088 $ 924,486 212,825 $ 2,659,299 Dividends and/or distributions reinvested -- -- 17,705 211,401 Redeemed (60,630) (672,151) (126,203) (1,546,046) ------------------------------------------------------------------ Net increase 22,458 $ 252,335 104,327 $ 1,324,654 ==================================================================
F20 | ACTIVE ALLOCATION FUND - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the six months ended July 31, 2008, were as follows:
PURCHASES SALES --------------------------------------------------------------------- Investment securities $195,643,851 $24,146,670
- -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from investments in the Underlying Funds and the Fund's investment in IMMF. The weighted indirect management fees collected from the Underlying Funds and the Fund's investment in IMMF, as a percent of average daily net assets of the Fund for the six months ended July 31, 2008 was 0.57%. The Fund pays the Manager an asset allocation fee equal to an annual rate of 0.10% of the average daily net assets of the Fund. - -------------------------------------------------------------------------------- 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 per account fee. For the six months ended July 31, 2008, the Fund paid $1,715,114 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 annually 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. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor") acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the "Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically 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 periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans (the "Plans") for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to compensate the F21 | ACTIVE ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued Distributor for its services in connection with the distribution of those 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 each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the Plans at June 30, 2008 for Class B, Class C and Class N shares were $7,696,042, $5,170,978 and $1,569,544, respectively. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges ("CDSC") do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SIX MONTHS RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ------------------------------------------------------------------------------------------------------------------------------------ July 31, 2008 $1,595,948 $14,539 $483,482 $70,424 $10,401
- -------------------------------------------------------------------------------- WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a total expense limitation on the aggregate amount of combined direct (fund-of-funds level) and indirect expense so that "Total expenses" as a percentage of average daily net assets will not exceed the following annual rates: 1.45%, 2.20%, 2.20%, 1.70% and 1.20%, for Class A, Class B, Class C, Class N and Class Y, respectively. During the six months ended July 31, 2008, the Manager reimbursed the Fund $4,875, $1,528, $2,183, $571 and $13 for Class A, Class B, Class C, Class N and Class Y shares, respectively. The Manager may modify or terminate this undertaking at any time without notice to shareholders. These expense limitations do not include extraordinary expenses and other expenses not incurred in the ordinary course of the Fund's business. Notwithstanding the foregoing limits, the Manager is not required to waive or reimburse Fund expenses in excess of indirect management fees earned from investments in Underlying Funds to assure that expenses do not exceed those limits. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time. F22 | ACTIVE ALLOCATION FUND Prior to June 1, 2008, the Manager waived fees and/or reimbursed Fund expenses in an amount equal to the indirect management fees incurred through the Fund's investment in IMMF. During the six months ended July 31, 2008, the Manager waived $9,025 for IMMF management fees. - -------------------------------------------------------------------------------- 5. FOREIGN CURRENCY EXCHANGE CONTRACTS The Fund may enter into foreign currency exchange contracts ("forward contracts") for the purchase or sale of a foreign currency at a negotiated rate at a future date. Forward contracts are reported on a schedule following the Statement of Investments. Forward contracts will be valued daily based upon the closing prices of the forward currency rates determined at the close of the Exchange as provided by a bank, dealer or pricing service. The resulting unrealized appreciation (depreciation) is reported in the Statement of Assets and Liabilities as a receivable or payable and in the Statement of Operations within the change in unrealized appreciation (depreciation). At contract close, the difference between the original cost of the contract and the value at the close date is recorded as a realized gain (loss) in the Statement of Operations. Risks to the Fund include both market and credit risk. Market risk is the risk that the value of the forward contract will depreciate due to unfavorable changes in the exchange rates. 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 payments that the Fund has not yet received. As of July 31, 2008, the Fund had no outstanding forward contracts. - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS A futures contract is a commitment to buy or sell a specific amount of a financial instrument at a negotiated price on a stipulated future date. The Fund may buy and sell futures contracts and may also buy or write put or call options on these futures contracts. Futures contracts traded on a commodities or futures exchange will be valued at the final settlement price or official closing price on the principal exchange as reported by such principal exchange at its trading session ending at, or most recently prior to, the time when the Fund's assets are valued. 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. Futures contracts are reported on a schedule following the Statement of Investments. Securities held in collateralized accounts to cover initial margin requirements on open futures contracts are noted in the Statement of Investments. Cash held by the broker to cover initial margin requirements on open futures contracts and the receivable and/or payable for the daily mark to market for the variation margin are noted in the Statement of Assets and Liabilities. The net change in unrealized appreciation and depreciation is F23 | ACTIVE ALLOCATION FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 6. FUTURES CONTRACTS Continued reported in the Statement of Operations. Realized gains (losses) are reported in the Statement of Operations at the closing or expiration of futures contracts. Risks of entering into futures contracts (and related options) include the possibility that there may be an illiquid market where the Fund is unable to liquidate the contract or enter into an offsetting position and, if used for hedging purposes, the risk that the price of the contract will correlate imperfectly with the prices of the Fund's securities. - -------------------------------------------------------------------------------- 7. SWAP CONTRACTS The Fund may enter into swap contract agreements with a counterparty to exchange a series of cash flows based on either specified reference rates, or the occurrence of a credit event, over a specified period. Such contracts may include interest rate, equity, debt, index, total return, credit and currency swaps. Swaps are marked to market daily using primarily quotations from pricing services, counterparties and brokers. Swap contracts are reported on a schedule following the Statement of Investments. The value of the contracts is separately disclosed on the Statement of Assets and Liabilities. The unrealized appreciation (depreciation) related to the change in the valuation of the notional amount of the swap is combined with the accrued interest due to (owed by) the Fund at termination or settlement. The net change in this amount during the period is included on the Statement of Operations. The Fund also records any periodic payments received from (paid to) the counterparty, including at termination, under such contracts as realized gain (loss) on the Statement of Operations. Risks of entering into swap contracts include credit, market and liquidity risk. 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 payments that the Fund has not yet received. Market risk is the risk that the value of the contract will depreciate due to unfavorable changes in the reference asset. If there is an illiquid market for the agreement, the Fund may be unable to close the contract prior to contract termination. - -------------------------------------------------------------------------------- CREDIT DEFAULT SWAP CONTRACTS. A credit default swap is a bilateral contract that enables an investor to buy or sell protection against a defined-issuer credit event. The Fund may enter into credit default swaps on a single security, or a basket of securities. In a credit default swap contract, the purchaser of the contract will pay a periodic interest fee, similar to an insurance premium, on the notional amount of the swap contract to the counterparty (the seller of the contract). If there is a credit event (for example, bankruptcy or a failure to timely pay interest or principal), the purchaser will exercise the contract and will receive a payment from the seller of the contract equal to the notional value of the credit default swap contract less the value of the underlying security. In the event that the credit default swap is exercised due to a credit event, the difference between the value of the underlying security and the notional amount is recorded as realized gain (loss) and is included on the Statement of Operations. F24 | ACTIVE ALLOCATION FUND Risks of credit default swaps include, but are not limited to, the cost of paying for credit protection if there are no credit events, or the cost of selling protection (paying the notional amount) when a credit event occurs, pricing transparency when assessing the cost of a credit default swap, and the need to fund the delivery obligation (either cash or defaulted securities). - -------------------------------------------------------------------------------- TOTAL RETURN SWAP CONTRACTS. A total return swap is an agreement between counterparties to exchange a set of future cash flows on the notional amount of the contract. One cash flow is typically based on a reference interest rate or index and the other on the total return of a reference asset such as a security, a basket of securities, or an index. The total return includes appreciation or depreciation on the reference asset, plus any interest or dividend payments. - -------------------------------------------------------------------------------- 8. RECENT ACCOUNTING PRONOUNCEMENT In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement on Financial Accounting Standards ("SFAS") No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This standard requires enhanced disclosures about derivative and hedging activities, including qualitative disclosures about how and why the Fund uses derivative instruments, how these activities are accounted for, and their effect on the Fund's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, management is evaluating the implications of SFAS No. 161 and its impact on the Fund's financial statements and related disclosures. F25 | ACTIVE ALLOCATION FUND THIS PAGE INTENTIONALLY LEFT BLANK. F26 | ACTIVE ALLOCATION FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may 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 1-800-SEC-0330. 15 | ACTIVE ALLOCATION FUND JULY 31, 2008 - -------------------------------------------------------------------------------- Moderate Management Investor Fund Commentaries A Series of Oppenheimer Portfolio Series and Semiannual Report - -------------------------------------------------------------------------------- MANAGEMENT COMMENTARIES An Interview with Your Fund's Managers SEMIANNUAL REPORT Listing of Investments Financial Statements [OPPENHEIMERFUNDS LOGO] TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- ASSET CLASS ALLOCATION [PIE CHART] Fixed Income Funds 45.5% U.S. Equity Funds 34.5 Alternative Investment Funds 10.3 Global Equity Fund 9.7
Fund holdings and allocations are subject to change. Percentages are as of July 31, 2008, and are based on the total market value of investments in affiliated companies. 10 | MODERATE INVESTOR FUND NOTES - -------------------------------------------------------------------------------- Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. The Fund's investment strategy and focus can change over time. The mention of specific holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 4/5/05. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. CLASS Y shares of the Fund were first publicly offered on 4/5/05. Class Y shares are offered only to certain institutional investors under a special agreement with the Distributor, and to present or former officers, directors, trustees or employees (and their eligible family members) of the Fund, the Manager, its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 11 | MODERATE INVESTOR FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended July 31, 2008. ACTUAL EXPENSES. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in the 12 | MODERATE INVESTOR FUND Statement of Additional Information). Therefore, the "hypothetical" section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED ACTUAL FEBRUARY 1, 2008 JULY 31, 2008 JULY 31, 2008 - --------------------------------------------------------------------------------- Class A $1,000.00 $ 968.20 $1.91 - --------------------------------------------------------------------------------- Class B 1,000.00 965.20 5.83 - --------------------------------------------------------------------------------- Class C 1,000.00 965.10 5.64 - --------------------------------------------------------------------------------- Class N 1,000.00 967.10 3.18 - --------------------------------------------------------------------------------- Class Y 1,000.00 970.10 0.05 HYPOTHETICAL (5% return before expenses) - --------------------------------------------------------------------------------- Class A 1,000.00 1,022.92 1.96 - --------------------------------------------------------------------------------- Class B 1,000.00 1,018.95 5.99 - --------------------------------------------------------------------------------- Class C 1,000.00 1,019.14 5.79 - --------------------------------------------------------------------------------- Class N 1,000.00 1,021.63 3.27 - --------------------------------------------------------------------------------- Class Y 1,000.00 1,024.81 0.05
Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Those annualized expense ratios, excluding all underlying fund expenses, based on the 6-month period ended July 31, 2008 are as follows:
CLASS EXPENSE RATIOS - -------------------------- Class A 0.39% - -------------------------- Class B 1.19 - -------------------------- Class C 1.15 - -------------------------- Class N 0.65 - -------------------------- Class Y 0.01
The expense ratios reflect reduction to custodian expenses and voluntary waivers or reimbursements of expenses by the Fund's Manager that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable. 13 | MODERATE INVESTOR FUND THIS PAGE INTENTIONALLY LEFT BLANK. 14 | MODERATE INVESTOR FUND STATEMENT OF INVESTMENTS July 31, 2008 / Unaudited - --------------------------------------------------------------------------------
SHARES VALUE - -------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------- INVESTMENT COMPANIES--99.8% 1 - -------------------------------------------------------------------------------------------- ALTERNATIVE INVESTMENT FUNDS--10.3% Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 6,114,697 $ 56,805,536 - -------------------------------------------------------------------------------------------- Oppenheimer Real Estate Fund, Cl. Y 2,744,141 52,056,358 ---------------- 108,861,894 - -------------------------------------------------------------------------------------------- FIXED INCOME FUNDS--45.4% Oppenheimer Champion Income Fund, Cl. Y 13,750,660 106,292,600 - -------------------------------------------------------------------------------------------- Oppenheimer Core Bond Fund, Cl. Y 22,553,164 213,127,394 - -------------------------------------------------------------------------------------------- Oppenheimer International Bond Fund, Cl. Y 8,079,355 52,354,226 - -------------------------------------------------------------------------------------------- Oppenheimer Limited-Term Government Fund, Cl. Y 11,095,882 107,408,141 ---------------- 479,182,361 - -------------------------------------------------------------------------------------------- GLOBAL EQUITY FUND--9.6% Oppenheimer Global Fund, Cl. Y 1,635,514 101,827,060 - -------------------------------------------------------------------------------------------- U.S. EQUITY FUNDS--34.5% Oppenheimer Capital Appreciation Fund, Cl. Y 2,260,574 105,975,697 - -------------------------------------------------------------------------------------------- Oppenheimer Main Street Fund, Cl. Y 3,254,326 103,845,524 - -------------------------------------------------------------------------------------------- Oppenheimer Main Street Opportunity Fund, Cl. Y 4,299,347 52,065,102 - -------------------------------------------------------------------------------------------- Oppenheimer Value Fund, Cl. Y 4,529,379 101,911,037 ---------------- 363,797,360 - -------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $1,134,837,927) 99.8% 1,053,668,675 - -------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.2 2,601,803 ------------------------------ NET ASSETS 100.0% $1,056,270,478 ==============================
F1 | MODERATE INVESTOR FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended July 31, 2008, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES JANUARY 31, 2008 ADDITIONS REDUCTIONS JULY 31, 2008 - ---------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y 1,971,338 313,897 24,661 2,260,574 Oppenheimer Champion Income Fund, Cl. Y 10,823,248 3,074,285 146,873 13,750,660 Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 6,896,989 789,852 1,572,144 6,114,697 Oppenheimer Core Bond Fund, Cl. Y 19,762,236 3,539,564 748,636 22,553,164 Oppenheimer Global Fund, Cl. Y 1,368,498 285,440 18,424 1,635,514 Oppenheimer Institutional Money Market Fund, Cl. E 1,346,117 62,240,590 63,586,707 -- Oppenheimer International Bond Fund, Cl. Y 8,350,987 1,248,225 1,519,857 8,079,355 Oppenheimer Limited-Term Government Fund, Cl. Y 10,121,883 1,706,533 732,534 11,095,882 Oppenheimer Main Street Fund, Cl. Y 2,683,355 606,777 35,806 3,254,326 Oppenheimer Main Street Opportunity Fund, Cl. Y 3,514,973 831,700 47,326 4,299,347 Oppenheimer Real Estate Fund, Cl. Y 2,112,124 663,117 31,100 2,744,141 Oppenheimer Value Fund, Cl. Y 3,731,119 848,994 50,734 4,529,379
DIVIDEND REALIZED VALUE INCOME GAIN (LOSS) - ---------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y $ 105,975,697 $ -- $ (217,693) Oppenheimer Champion Income Fund, Cl. Y 106,292,600 4,123,146 (244,652) Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 56,805,536 -- 1,061,198 Oppenheimer Core Bond Fund, Cl. Y 213,127,394 6,436,062 (479,043) Oppenheimer Global Fund, Cl. Y 101,827,060 -- (354,498) Oppenheimer Institutional Money Market Fund, Cl. E -- 15,847 -- Oppenheimer International Bond Fund, Cl. Y 52,354,226 1,166,463 239,098 Oppenheimer Limited-Term Government Fund, Cl. Y 107,408,141 2,672,707 (133,652) Oppenheimer Main Street Fund, Cl. Y 103,845,524 -- (449,212) Oppenheimer Main Street Opportunity Fund, Cl. Y 52,065,102 -- (198,760) Oppenheimer Real Estate Fund, Cl. Y 52,056,358 410,647 (204,976) Oppenheimer Value Fund, Cl. Y 101,911,037 -- (387,270) ------------------------------------------------------ $1,053,668,675 $14,824,872 $(1,369,460) ======================================================
F2 | MODERATE INVESTOR FUND - -------------------------------------------------------------------------------- VALUATION INPUTS - -------------------------------------------------------------------------------- Various data inputs are used in determining the value of each of the Fund's investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards: 1) Level 1--quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange). 2) Level 2--inputs other than quoted prices that are observable for the asset (such as quoted prices for similar assets and market-corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.). 3) Level 3--unobservable inputs (including the Manager's own judgments about assumptions that market participants would use in pricing the asset). The market value of the Fund's investments was determined based on the following inputs as of July 31, 2008:
INVESTMENTS IN OTHER FINANCIAL VALUATION DESCRIPTION SECURITIES INSTRUMENTS* ------------------------------------------------------------------------------------ Level 1--Quoted Prices $1,053,668,675 $-- Level 2--Other Significant Observable Inputs -- -- Level 3--Significant Unobservable Inputs -- -- ---------------------------------- Total $1,053,668,675 $-- ==================================
*Other financial instruments include options written, currency contracts, futures, forwards and swap contracts. Currency contracts and forwards are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract's value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swaps are reported at their market value at measurement date. SEE THE ACCOMPANYING NOTES FOR FURTHER DISCUSSION OF THE METHODS USED IN DETERMINING VALUE OF THE FUND'S INVESTMENTS, AND A SUMMARY OF CHANGES TO THE VALUATION TECHNIQUES, IF ANY, DURING THE REPORTING PERIOD. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F3 | MODERATE INVESTOR FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - -------------------------------------------------------------------------------- July 31, 2008 - ------------------------------------------------------------------------------------- ASSETS - ------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments-- affiliated companies (cost $1,134,837,927) $1,053,668,675 - ------------------------------------------------------------------------------------- Cash 1,199,069 - ------------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 4,393,183 Dividends 2,697,177 Other 16,343 ---------------- Total assets 1,061,974,447 - ------------------------------------------------------------------------------------- LIABILITIES - ------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 3,897,579 Shares of beneficial interest redeemed 1,401,624 Distribution and service plan fees 220,171 Transfer and shareholder servicing agent fees 112,427 Trustees' compensation 53,211 Other 18,957 ---------------- Total liabilities 5,703,969 - ------------------------------------------------------------------------------------- NET ASSETS $1,056,270,478 ================ - ------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - ------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 99,603 - ------------------------------------------------------------------------------------- Additional paid-in capital 1,108,252,165 - ------------------------------------------------------------------------------------- Accumulated net investment income 11,527,096 - ------------------------------------------------------------------------------------- Accumulated net realized gain on investments 17,560,866 - ------------------------------------------------------------------------------------- Net unrealized depreciation on investments (81,169,252) ---------------- NET ASSETS $1,056,270,478 ================
F4 | MODERATE INVESTOR FUND - ----------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ----------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $548,247,745 and 51,417,128 shares of beneficial interest outstanding) $10.66 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $11.31 - ----------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $141,104,685 and 13,388,719 shares of beneficial interest outstanding) $10.54 - ----------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $255,572,066 and 24,296,482 shares of beneficial interest outstanding) $10.52 - ----------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $109,028,134 and 10,285,023 shares of beneficial interest outstanding) $10.60 - ----------------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $2,317,848 and 216,117 shares of beneficial interest outstanding) $10.72
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F5 | MODERATE INVESTOR FUND STATEMENT OF OPERATIONS Unaudited - -------------------------------------------------------------------------------- For the Six Months Ended July 31, 2008 - --------------------------------------------------------------------------- INVESTMENT INCOME - --------------------------------------------------------------------------- Dividends from affiliated companies $ 14,824,872 - --------------------------------------------------------------------------- Interest 14,067 -------------- Total investment income 14,838,939 - --------------------------------------------------------------------------- EXPENSES - --------------------------------------------------------------------------- Distribution and service plan fees: Class A 662,036 Class B 690,924 Class C 1,235,679 Class N 262,872 - --------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 304,540 Class B 108,032 Class C 155,479 Class N 70,651 - --------------------------------------------------------------------------- Shareholder communications: Class A 39,199 Class B 16,284 Class C 15,451 Class N 2,021 Class Y 7 - --------------------------------------------------------------------------- Trustees' compensation 23,134 - --------------------------------------------------------------------------- Custodian fees and expenses 2,663 - --------------------------------------------------------------------------- Other 24,072 -------------- Total expenses 3,613,044 Less reduction to custodian expenses (58) Less waivers and reimbursements of expenses (390) -------------- Net expenses 3,612,596 - --------------------------------------------------------------------------- NET INVESTMENT INCOME 11,226,343 - --------------------------------------------------------------------------- REALIZED AND UNREALIZED LOSS - --------------------------------------------------------------------------- Net realized loss on investments from affiliated companies (1,369,460) - --------------------------------------------------------------------------- Net change in unrealized depreciation on investments (46,008,263) - --------------------------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(36,151,380) ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F6 | MODERATE INVESTOR FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED JULY 31, 2008 JANUARY 31, (UNAUDITED) 2008 - ----------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------- OPERATIONS - ----------------------------------------------------------------------------------------------------------------- Net investment income $ 11,226,343 $ 34,634,100 - ----------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (1,369,460) 21,604,558 - ----------------------------------------------------------------------------------------------------------------- Net change in unrealized depreciation (46,008,263) (60,182,411) --------------------------------- Net decrease in net assets resulting from operations (36,151,380) (3,943,753) - ----------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ----------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A -- (18,904,451) Class B -- (4,112,456) Class C -- (7,591,061) Class N -- (3,249,986) Class Y -- (57,724) --------------------------------- -- (33,915,678) - ----------------------------------------------------------------------------------------------------------------- Distributions from net realized gain: Class A -- (3,981,106) Class B -- (1,073,876) Class C -- (1,892,622) Class N -- (722,066) Class Y -- (11,276) --------------------------------- -- (7,680,946) - ----------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - ----------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 68,963,835 207,816,823 Class B 13,959,984 35,877,108 Class C 32,919,148 101,146,789 Class N 16,725,471 48,924,312 Class Y 511,060 734,860 --------------------------------- 133,079,498 394,499,892 - ----------------------------------------------------------------------------------------------------------------- NET ASSETS - ----------------------------------------------------------------------------------------------------------------- Total increase 96,928,118 348,959,515 - ----------------------------------------------------------------------------------------------------------------- Beginning of period 959,342,360 610,382,845 --------------------------------- End of period (including accumulated net investment income of $11,527,096 and $300,753, respectively) $1,056,270,478 $959,342,360 =================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F7 | MODERATE INVESTOR FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS A (UNAUDITED) 2008 2007 2006 1 - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.01 $ 11.42 $ 10.78 $ 10.00 - ---------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .14 .54 .39 .38 Net realized and unrealized gain (loss) (.49) (.41) .55 .57 ----------------------------------------------- Total from investment operations (.35) .13 .94 .95 - ---------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.45) (.27) (.17) Distributions from net realized gain -- (.09) (.03) -- ----------------------------------------------- Total dividends and/or distributions to shareholders -- (.54) (.30) (.17) - ---------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.66 $ 11.01 $ 11.42 $ 10.78 =============================================== - ---------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (3.18)% 1.01% 8.73% 9.58% - ---------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $548,248 $497,377 $313,311 $107,686 - ---------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $537,105 $423,981 $206,672 $ 43,984 - ---------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 2.50% 4.59% 3.57% 4.39% Total expenses 5 0.39% 0.37% 0.40% 0.47% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.39% 0.37% 0.40% 0.46% - ---------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 3% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 0.97% Year Ended January 31, 2008 0.95% Year Ended January 31, 2007 1.01% Period Ended January 31, 2006 1.15%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F8 | MODERATE INVESTOR FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS B (UNAUDITED) 2008 2007 2006 1 - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - --------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.92 $ 11.34 $ 10.74 $ 10.00 - --------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .09 .42 .30 .31 Net realized and unrealized gain (loss) (.47) (.39) .54 .58 ---------------------------------------------- Total from investment operations (.38) .03 .84 .89 - --------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.36) (.21) (.15) Distributions from net realized gain -- (.09) (.03) -- ---------------------------------------------- Total dividends and/or distributions to shareholders -- (.45) (.24) (.15) - --------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.54 $ 10.92 $ 11.34 $ 10.74 ============================================== - --------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (3.48)% 0.18% 7.80% 8.90% - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - --------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $141,104 $132,233 $101,929 $36,956 - --------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $138,994 $121,584 $ 70,066 $15,521 - --------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 1.70% 3.61% 2.73% 3.56% Total expenses 5 1.19% 1.18% 1.21% 1.31% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.19% 1.18% 1.21% 1.29% - --------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 3% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.77% Year Ended January 31, 2008 1.76% Year Ended January 31, 2007 1.82% Period Ended January 31, 2006 1.99%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F9 | MODERATE INVESTOR FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS C (UNAUDITED) 2008 2007 2006 1 - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ PER SHARE OPERATING DATA - ------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 10.90 $ 11.33 $ 10.73 $ 10.00 - ------------------------------------------------------------------------------------------------------------ Income (loss) from investment operations: Net investment income 2 .09 .45 .30 .31 Net realized and unrealized gain (loss) (.47) (.41) .54 .57 ---------------------------------------------- Total from investment operations (.38) .04 .84 .88 - ------------------------------------------------------------------------------------------------------------ Dividends and/or distributions to shareholders: Dividends from net investment income -- (.38) (.21) (.15) Distributions from net realized gain -- (.09) (.03) -- ---------------------------------------------- Total dividends and/or distributions to shareholders -- (.47) (.24) (.15) - ------------------------------------------------------------------------------------------------------------ Net asset value, end of period $ 10.52 $ 10.90 $ 11.33 $ 10.73 ============================================== - ------------------------------------------------------------------------------------------------------------ TOTAL RETURN, AT NET ASSET VALUE 3 (3.49)% 0.24% 7.85% 8.82% - ------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------ RATIOS/SUPPLEMENTAL DATA - ------------------------------------------------------------------------------------------------------------ Net assets, end of period (in thousands) $255,572 $231,792 $142,351 $47,904 - ------------------------------------------------------------------------------------------------------------ Average net assets (in thousands) $248,624 $193,641 $ 95,773 $19,527 - ------------------------------------------------------------------------------------------------------------ Ratios to average net assets: 4 Net investment income 1.74% 3.88% 2.78% 3.64% Total expenses 5 1.15% 1.14% 1.16% 1.23% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.15% 1.14% 1.16% 1.22% - ------------------------------------------------------------------------------------------------------------ Portfolio turnover rate 4% 3% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.73% Year Ended January 31, 2008 1.72% Year Ended January 31, 2007 1.77% Period Ended January 31, 2006 1.91%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F10 | MODERATE INVESTOR FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS N (UNAUDITED) 2008 2007 2006 1 - -------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.96 $ 11.38 $ 10.76 $ 10.00 - -------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .12 .51 .40 .40 Net realized and unrealized gain (loss) (.48) (.41) .51 .53 -------------------------------------------- Total from investment operations (.36) .10 .91 .93 - -------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.43) (.26) (.17) Distributions from net realized gain -- (.09) (.03) -- -------------------------------------------- Total dividends and/or distributions to shareholders -- (.52) (.29) (.17) - -------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.60 $ 10.96 $ 11.38 $ 10.76 ============================================ - -------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (3.29)% 0.72% 8.47% 9.35% - -------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $109,028 $96,080 $51,620 $12,117 - -------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $105,798 $73,754 $27,110 $ 4,158 - -------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 2.24% 4.36% 3.58% 4.56% Total expenses 5 0.65% 0.64% 0.65% 0.68% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.65% 0.64% 0.65% 0.67% - -------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 3% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.23% Year Ended January 31, 2008 1.22% Year Ended January 31, 2007 1.26% Period Ended January 31, 2006 1.36%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F11 | MODERATE INVESTOR FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS Y (UNAUDITED) 2008 2007 2006 1 - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ----------------------------------------------------------------------------------------------------- Net asset value, beginning of period $11.05 $11.45 $10.79 $10.00 - ----------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .16 .55 .56 .36 Net realized and unrealized gain (loss) (.49) (.38) .43 .61 --------------------------------------- Total from investment operations (.33) .17 .99 .97 - ----------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.48) (.30) (.18) Distributions from net realized gain -- (.09) (.03) -- --------------------------------------- Total dividends and/or distributions to shareholders -- (.57) (.33) (.18) - ----------------------------------------------------------------------------------------------------- Net asset value, end of period $10.72 $11.05 $11.45 $10.79 ======================================= - ----------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (2.99)% 1.39% 9.18% 9.79% - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $2,318 $1,860 $1,172 $ 316 - ----------------------------------------------------------------------------------------------------- Average net assets (in thousands) $2,283 $1,315 $ 335 $ 216 - ----------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 2.87% 4.67% 5.06% 4.20% Total expenses 5 0.01% 0.02% 0.00% 0.28% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.01% 0.02% 0.00% 0.12% - ----------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 3% 4% 0%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 0.59% Year Ended January 31, 2008 0.60% Year Ended January 31, 2007 0.61% Period Ended January 31, 2006 0.96%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F12 | MODERATE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Portfolio Series (the "Trust") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Moderate Investor Fund (the "Fund") is a series of the Trust whose investment objective is to seek long-term growth of capital and current income. The Fund is a special type of mutual fund known as a "fund of funds" because it invests in other mutual funds. The Fund normally invests in a diversified portfolio of Oppenheimer mututal funds (individually, an "Underlying Fund" and collectively, the "Underlying Funds"). The Fund's investment adviser 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, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class 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 72 months after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares based upon the net asset value of the applicable Underlying Fund. For each Underlying fund, the net asset value per share for a class of shares is determined as of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading by dividing the value of the Underlying Fund's net assets attributable to that class by the number of outstanding shares of that class on that day. Effective for fiscal periods beginning after November 15, 2007, FASB Statement of Financial Accounting Standards No. 157, FAIR VALUE MEASUREMENTS, establishes a hierarchy for measuring fair value of assets and liabilities. As required by the standard, each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical assets or liabilities are classified as "Level 1", inputs other than quoted prices for an asset that are observable are classified as "Level 2" and unobservable inputs, including the Manager's judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as "Level 3". The inputs used for valuing assets F13 | MODERATE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued and liabilities are not necessarily an indication of the risks associated with investing in those assets or liabilities. A table summarizing the Fund's investments under these levels of classification is included following the Statement of Investments. The Fund classifies each of its investments in the Underlying Funds as Level 1, without consideration as to the classification level of the specific investments held by the Underlying Funds. To determine their net asset values, the Underlying Funds' assets are valued primarily on the basis of current market quotations. In the absence of a readily available quoted market price, including for assets whose values have been materially affected by what the Manager identifies as a significant event occurring before the Underlying Fund's assets are valued but after the close of their respective exchanges, the Manager, acting through its internal valuation committee, in good faith determines the fair valuation of that Underlying Fund's assets using consistently applied procedures under the supervision of the Board of Trustees. The methodologies used for valuing assets are not necessarily an indication of the risks associated with investing in those Underlying Funds. The Underlying Funds' investments are classified as Level 1, Level 2 or Level 3 based on the inputs used in determining their value. Investments held by the Underlying Funds are typically classified as Level 1 or Level 2. Fair valued assets may be classified as "Level 3" if the valuation primarily reflects the Manager's own assumptions about the inputs that market participants would use in valuing such securities. There have been no significant changes to the fair valuation methodologies during the period. - -------------------------------------------------------------------------------- RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund's investments and therefore the value of the Fund's shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund. - -------------------------------------------------------------------------------- INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund ("IMMF") to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment adviser of IMMF. The Fund's investment in IMMF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of IMMF's Class E expenses, including its management fee. F14 | MODERATE INVESTOR FUND - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis 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 comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company 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. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund's tax return filings generally remain open for the three preceding fiscal reporting period ends. As of July 31, 2008, the Fund had available for federal income tax purposes an estimated capital loss carryforward of $1,369,460. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended July 31, 2008, it is estimated that the Fund will not utilize any capital loss carryforward to offset realized capital gains. 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 aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of July 31, 2008 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $1,137,454,587 ============== Gross unrealized appreciation $ 17,833,061 Gross unrealized depreciation (101,618,973) -------------- Net unrealized depreciation $ (83,785,912) ==============
- -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the "Plan") for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the F15 | MODERATE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued Plan. Active independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the six months ended July 31, 2008, the Fund's projected benefit obligations, payments to retired trustees and accumulated liability were as follows: Projected Benefit Obligations Increased $13,310 Payments Made to Retired Trustees 11 Accumulated Liability as of July 31, 2008 38,427
The Board of Trustees has adopted a compensation deferral plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. 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. Amounts will be deferred until distributed in accordance to the compensation deferral plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager. - -------------------------------------------------------------------------------- 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 is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily. - -------------------------------------------------------------------------------- CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item, if applicable, represents earnings on cash balances maintained by the F16 | MODERATE INVESTOR FUND Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. - -------------------------------------------------------------------------------- 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, 2008 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------ CLASS A Sold 11,754,756 $129,481,471 23,670,312 $277,504,057 Dividends and/or distributions reinvested -- -- 1,911,665 21,792,987 Redeemed (5,516,269) (60,517,636) (7,842,283) (91,480,221) ------------------------------------------------------------ Net increase 6,238,487 $ 68,963,835 17,739,694 $207,816,823 ============================================================ - ------------------------------------------------------------------------------------------ CLASS B Sold 3,116,043 $ 33,938,426 5,367,940 $ 62,105,890 Dividends and/or distributions reinvested -- -- 445,664 5,044,923 Redeemed (1,831,419) (19,978,442) (2,696,518) (31,273,705) ------------------------------------------------------------ Net increase 1,284,624 $ 13,959,984 3,117,086 $ 35,877,108 ============================================================ - ------------------------------------------------------------------------------------------ CLASS C Sold 6,001,025 $ 65,115,822 11,349,465 $131,882,421 Dividends and/or distributions reinvested -- -- 782,773 8,845,325 Redeemed (2,966,540) (32,196,674) (3,432,256) (39,580,957) ------------------------------------------------------------ Net increase 3,034,485 $ 32,919,148 8,699,982 $101,146,789 ============================================================
F17 | MODERATE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, 2008 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------ CLASS N Sold 3,344,599 $ 36,634,984 6,083,743 $ 70,781,442 Dividends and/or distributions reinvested -- -- 327,476 3,720,127 Redeemed (1,826,753) (19,909,513) (2,181,216) (25,577,257) ------------------------------------------------------------- Net increase 1,517,846 $ 16,725,471 4,230,003 $ 48,924,312 ============================================================= - ------------------------------------------------------------------------------------------ CLASS Y Sold 83,083 $ 913,705 84,671 $ 956,883 Dividends and/or distributions reinvested -- -- 6,021 68,943 Redeemed (35,255) (402,645) (24,775) (290,966) ------------------------------------------------------------- Net increase 47,828 $ 511,060 65,917 $ 734,860 =============================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the six months ended July 31, 2008, were as follows:
PURCHASES SALES -------------------------------------------------- Investment securities $190,066,332 $45,908,405
- -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from investments in the Underlying Funds and the Fund's investment in IMMF. The weighted indirect management fees collected from the Underlying Funds and the Fund's investment in IMMF, as a percent of average daily net assets of the Fund for the six months ended July 31, 2008 was 0.55%. - -------------------------------------------------------------------------------- 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 per account fee. For the six months ended July 31, 2008, the Fund paid $606,270 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 annually 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. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor") acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. F18 | MODERATE INVESTOR FUND - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the "Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically 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 periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans (the "Plans") for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to compensate the Distributor for its services in connection with the distribution of those 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 each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the Plans at June 30, 2008 for Class B, Class C and Class N shares were $2,248,542, $1,960,942 and $1,092,155, respectively. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges ("CDSC") do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - ------------------------------------------------------------------------------------------------------- July 31, 2008 $656,796 $10,179 $194,064 $27,373 $3,874
F19 | MODERATE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a total expense limitation on the aggregate amount of combined direct (fund-of-funds level) and indirect expense so that "Total expenses" as a percentage of average daily net assets will not exceed the following annual rates: 1.30%, 2.05%, 2.05%, 1.55% and 1.05%, for Class A, Class B, Class C, Class N and Class Y, respectively. The Manager may modify or terminate this undertaking at any time without notice to shareholders. These expense limitations do not include extraordinary expenses and other expenses not incurred in the ordinary course of the Fund's business. Notwithstanding the foregoing limits, the Manager is not required to waive or reimburse Fund expenses in excess of indirect management fees earned from investments in Underlying Funds to assure that expenses do not exceed those limits. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time. Prior to June 1, 2008, the Manager waived fees and/or reimbursed Fund expenses in an amount equal to the indirect management fees incurred through the Fund's investment in IMMF. During the six months ended July 31, 2008, the Manager waived $390 for IMMF management fees. - -------------------------------------------------------------------------------- 5. RECENT ACCOUNTING PRONOUNCEMENTS In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement on Financial Accounting Standards ("SFAS") No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This standard requires enhanced disclosures about derivative and hedging activities, including qualitative disclosures about how and why the Fund uses derivative instruments, how these activities are accounted for, and their effect on the Fund's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, management is evaluating the implications of SFAS No. 161 and its impact on the Fund's financial statements and related disclosures. F20 | MODERATE INVESTOR FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may 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 1-800-SEC-0330. 15 | MODERATE INVESTOR FUND JULY 31, 2008 - -------------------------------------------------------------------------------- Management Conservative Commentaries Investor Fund and A Series of Oppenheimer Portfolio Series Semiannual Report - -------------------------------------------------------------------------------- MANAGEMENT COMMENTARIES An Interview with Your Fund's Managers SEMIANNUAL REPORT Listing of Investments Financial Statements [OPPENHEIMERFUNDS LOGO] TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- ASSET CLASS ALLOCATION [PIE CHART] Fixed Income Funds 67.3% U.S. Equity Funds 16.2 Alternative Investment Funds 11.2 Global Equity Fund 5.3
Fund holdings and allocations are subject to change. Percentages are as of July 31, 2008, and are based on the total market value of investments in affiliated companies. 10 | CONSERVATIVE INVESTOR FUND NOTES - -------------------------------------------------------------------------------- Total returns include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund's total returns shown do not reflect the deduction of income taxes on an individual's investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares. INVESTORS SHOULD CONSIDER THE FUND'S INVESTMENT OBJECTIVES, RISKS, AND OTHER CHARGES AND EXPENSES CAREFULLY BEFORE INVESTING. THE FUND'S PROSPECTUS CONTAINS THIS AND OTHER INFORMATION ABOUT THE FUND, AND MAY BE OBTAINED BY ASKING YOUR FINANCIAL ADVISOR, CALLING US AT 1.800.525.7048 OR VISITING OUR WEBSITE AT WWW.OPPENHEIMERFUNDS.COM. READ THE PROSPECTUS CAREFULLY BEFORE INVESTING. The Fund's investment strategy and focus can change over time. The mention of specific holdings does not constitute a recommendation by OppenheimerFunds, Inc. CLASS A shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class A returns include the current maximum initial sales charge of 5.75%. CLASS B shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 3% (since inception). Class B shares are subject to an annual 0.75% asset-based sales charge. CLASS C shares of the Fund were first publicly offered on 4/5/05. Unless otherwise noted, Class C returns include the contingent deferred sales charge of 1% for the 1-year period. Class C shares are subject to an annual 0.75% asset-based sales charge. CLASS N shares of the Fund were first publicly offered on 4/5/05. Class N shares are offered only through retirement plans. Unless otherwise noted, Class N returns include the contingent deferred sales charge of 1% for the 1-year period. Class N shares are subject to an annual 0.25% asset-based sales charge. 11 | CONSERVATIVE INVESTOR FUND NOTES - -------------------------------------------------------------------------------- CLASS Y shares of the Fund were first publicly offered on 4/5/05. Class Y shares are offered only to certain institutional investors under a special agreement with the Distributor, and to present or former officers, directors, trustees or employees (and their eligible family members) of the Fund, the Manager, its affiliates, its parent company and the subsidiaries of its parent company, and retirement plans established for the benefit of such individuals. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 12 | CONSERVATIVE INVESTOR FUND FUND EXPENSES - -------------------------------------------------------------------------------- FUND EXPENSES. As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions; and redemption fees (if applicable); and (2) ongoing costs, including management fees; distribution and service fees; and other Fund expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000.00 invested at the beginning of the period and held for the entire 6-month period ended July 31, 2008. ACTUAL EXPENSES. The first section of the table provides information about actual account values and actual expenses. You may use the information in this section for the class of shares you hold, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600.00 account value divided by $1,000.00 = 8.60), then multiply the result by the number in the first section under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES. The second section of the table provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for each class of shares, and an assumed rate of return of 5% per year for each class before expenses, which is not the actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example for the class of shares you hold with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as front-end or contingent deferred sales charges (loads), or a $12.00 fee imposed annually on accounts valued at less than $500.00 (subject to exceptions described in 13 | CONSERVATIVE INVESTOR FUND FUND EXPENSES Continued - -------------------------------------------------------------------------------- the Statement of Additional Information). Therefore, the "hypothetical" section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
BEGINNING ENDING EXPENSES ACCOUNT ACCOUNT PAID DURING VALUE VALUE 6 MONTHS ENDED ACTUAL FEBRUARY 1, 2008 JULY 31, 2008 JULY 31, 2008 - --------------------------------------------------------------------------------------- Class A $ 1,000.00 $ 977.70 $ 1.82 - --------------------------------------------------------------------------------------- Class B 1,000.00 973.80 5.76 - --------------------------------------------------------------------------------------- Class C 1,000.00 974.60 5.66 - --------------------------------------------------------------------------------------- Class N 1,000.00 976.60 3.45 - --------------------------------------------------------------------------------------- Class Y 1,000.00 978.70 0.34 HYPOTHETICAL (5% return before expenses) - --------------------------------------------------------------------------------------- Class A 1,000.00 1,023.02 1.86 - --------------------------------------------------------------------------------------- Class B 1,000.00 1,019.05 5.89 - --------------------------------------------------------------------------------------- Class C 1,000.00 1,019.14 5.79 - --------------------------------------------------------------------------------------- Class N 1,000.00 1,021.38 3.52 - --------------------------------------------------------------------------------------- Class Y 1,000.00 1,024.52 0.35
Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). Those annualized expense ratios, excluding all underlying expenses, based on the 6-month period ended July 31, 2008 are as follows:
CLASS EXPENSE RATIOS - ---------------------------------- Class A 0.37% - ---------------------------------- Class B 1.17 - ---------------------------------- Class C 1.15 - ---------------------------------- Class N 0.70 - ---------------------------------- Class Y 0.07
The expense ratios reflect reduction to custodian expenses and voluntary waivers or reimbursements of expenses by the Fund's Manager that can be terminated at any time, without advance notice. The "Financial Highlights" tables in the Fund's financial statements, included in this report, also show the gross expense ratios, without such waivers or reimbursements and reduction to custodian expenses, if applicable. 14 | CONSERVATIVE INVESTOR FUND STATEMENT OF INVESTMENTS July 31, 2008 / Unaudited - --------------------------------------------------------------------------------
SHARES VALUE - ---------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------- INVESTMENT COMPANIES--99.7% 1 - ---------------------------------------------------------------------------------------- ALTERNATIVE INVESTMENT FUNDS--11.2% Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 2,855,569 $ 26,528,235 - ---------------------------------------------------------------------------------------- Oppenheimer Real Estate Fund, Cl. Y 1,292,462 24,518,002 --------------- 51,046,237 - ---------------------------------------------------------------------------------------- FIXED INCOME FUNDS--67.1% Oppenheimer Champion Income Fund, Cl. Y 6,750,843 52,184,023 - ---------------------------------------------------------------------------------------- Oppenheimer Core Bond Fund, Cl. Y 15,885,770 150,120,518 - ---------------------------------------------------------------------------------------- Oppenheimer International Bond Fund, Cl. Y 3,798,627 24,615,107 - ---------------------------------------------------------------------------------------- Oppenheimer Limited-Term Government Fund, Cl. Y 8,053,029 77,953,325 --------------- 304,872,973 - ---------------------------------------------------------------------------------------- GLOBAL EQUITY FUND--5.3% Oppenheimer Global Fund, Cl. Y 385,105 23,976,606 - ---------------------------------------------------------------------------------------- U.S. EQUITY FUNDS--16.1% Oppenheimer Capital Appreciation Fund, Cl. Y 531,230 24,904,018 - ---------------------------------------------------------------------------------------- Oppenheimer Main Street Fund, Cl. Y 765,173 24,416,675 - ---------------------------------------------------------------------------------------- Oppenheimer Value Fund, Cl. Y 1,065,974 23,984,428 --------------- 73,305,121 - ---------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $477,950,054) 99.7% 453,200,937 - ---------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.3 1,273,150 ----------------------------- NET ASSETS 100.0% $ 454,474,087 =============================
F1 | CONSERVATIVE INVESTOR FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTES TO STATEMENT OF INVESTMENTS 1. Is or was an affiliate, as defined in the Investment Company Act of 1940, at or during the period ended July 31, 2008, by virtue of the Fund owning at least 5% of the voting securities of the issuer or as a result of the Fund and the issuer having the same investment adviser. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES SHARES JANUARY 31, GROSS GROSS JULY 31, 2008 ADDITIONS REDUCTIONS 2008 - ---------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y 430,901 108,272 7,943 531,230 Oppenheimer Champion Income Fund, Cl. Y 4,973,921 1,876,455 99,533 6,750,843 Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 3,003,733 497,008 645,172 2,855,569 Oppenheimer Core Bond Fund, Cl. Y 12,965,949 3,202,807 282,986 15,885,770 Oppenheimer Global Fund, Cl. Y 300,157 90,832 5,884 385,105 Oppenheimer Institutional Money Market Fund, Cl. E 1,112,684 45,352,291 46,464,975 -- Oppenheimer International Bond Fund, Cl. Y 3,634,483 764,005 599,861 3,798,627 Oppenheimer Limited-Term Government Fund, Cl. Y 6,837,271 1,601,761 386,003 8,053,029 Oppenheimer Main Street Fund, Cl. Y 588,201 188,541 11,569 765,173 Oppenheimer Real Estate Fund, Cl. Y 942,921 369,283 19,742 1,292,462 Oppenheimer Value Fund, Cl. Y 818,623 263,673 16,322 1,065,974
DIVIDEND REALIZED VALUE INCOME GAIN (LOSS) - ---------------------------------------------------------------------------------------------------------------------- Oppenheimer Capital Appreciation Fund, Cl. Y $ 24,904,018 $ -- $ (59,192) Oppenheimer Champion Income Fund, Cl. Y 52,184,023 1,952,795 (149,302) Oppenheimer Commodity Strategy Total Return Fund, Cl. Y 26,528,235 -- 475,899 Oppenheimer Core Bond Fund, Cl. Y 150,120,518 4,364,053 (158,104) Oppenheimer Global Fund, Cl. Y 23,976,606 -- (97,104) Oppenheimer Institutional Money Market Fund, Cl. E -- 10,065 -- Oppenheimer International Bond Fund, Cl. Y 24,615,107 525,087 77,009 Oppenheimer Limited-Term Government Fund, Cl. Y 77,953,325 1,864,344 (66,332) Oppenheimer Main Street Fund, Cl. Y 24,416,675 -- (135,250) Oppenheimer Real Estate Fund, Cl. Y 24,518,002 184,945 (115,975) Oppenheimer Value Fund, Cl. Y 23,984,428 -- (109,631) -------------------------------------------- $ 453,200,937 $ 8,901,289 $ (337,982) ============================================
F2 | CONSERVATIVE INVESTOR FUND - -------------------------------------------------------------------------------- VALUATION INPUTS - -------------------------------------------------------------------------------- Various data inputs are used in determining the value of each of the Fund's investments as of the reporting period end. These data inputs are categorized in the following hierarchy under applicable financial accounting standards: 1) Level 1--quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange) 2) Level 2--inputs other than quoted prices that are observable for the asset (such as quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.) 3) Level 3--unobservable inputs (including the Manager's own judgments about assumptions that market participants would use in pricing the asset). The market value of the Fund's investments was determined based on the following inputs as of July 31, 2008:
INVESTMENTS OTHER FINANCIAL VALUATION DESCRIPTION IN SECURITIES INSTRUMENTS* - ---------------------------------------------------------------------------------------------- Level 1--Quoted Prices $ 453,200,937 $ -- Level 2--Other Significant Observable Inputs -- -- Level 3--Significant Unobservable Inputs -- -- ----------------------------------- Total $ 453,200,937 $ -- ===================================
*Other financial instruments include options written, currency contracts, futures, forwards and swap contracts. Currency contracts and forwards are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract's value from trade date. Futures are reported at their variation margin at measurement date, which represents the amount due to/from the Fund at that date. Options and swaps are reported at their market value at measurement date. SEE THE ACCOMPANYING NOTES FOR FURTHER DISCUSSION OF THE METHODS USED IN DETERMINING VALUE OF THE FUND'S INVESTMENTS, AND A SUMMARY OF CHANGES TO THE VALUATION TECHNIQUES, IF ANY, DURING THE REPORTING PERIOD. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F3 | CONSERVATIVE INVESTOR FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - -------------------------------------------------------------------------------- July 31, 2008 - --------------------------------------------------------------------------------------------------- ASSETS - --------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments-- affiliated companies (cost $477,950,054) $ 453,200,937 - --------------------------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 2,386,910 Dividends 1,675,490 Investments sold 456,397 Other 7,072 --------------- Total assets 457,726,806 - --------------------------------------------------------------------------------------------------- LIABILITIES - --------------------------------------------------------------------------------------------------- Bank overdraft 460,181 - --------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 1,674,300 Shares of beneficial interest redeemed 938,185 Distribution and service plan fees 92,174 Transfer and shareholder servicing agent fees 43,145 Trustees' compensation 19,288 Shareholder communications 10,778 Other 14,668 --------------- Total liabilities 3,252,719 - --------------------------------------------------------------------------------------------------- NET ASSETS $ 454,474,087 =============== - --------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - --------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 43,478 - --------------------------------------------------------------------------------------------------- Additional paid-in capital 468,934,632 - --------------------------------------------------------------------------------------------------- Accumulated net investment income 7,598,279 - --------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments 2,646,815 - --------------------------------------------------------------------------------------------------- Net unrealized depreciation on investments (24,749,117) --------------- NET ASSETS $ 454,474,087 ===============
F4 | CONSERVATIVE INVESTOR FUND - ---------------------------------------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE - ---------------------------------------------------------------------------------------------------------------- Class A Shares: Net asset value and redemption price per share (based on net assets of $228,320,615 and 21,725,298 shares of beneficial interest outstanding) $ 10.51 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 11.15 - ---------------------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $40,859,037 and 3,932,071 shares of beneficial interest outstanding) $ 10.39 - ---------------------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $116,647,236 and 11,249,016 shares of beneficial interest outstanding) $ 10.37 - ---------------------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $67,903,151 and 6,500,919 shares of beneficial interest outstanding) $ 10.45 - ---------------------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $744,048 and 70,426 shares of beneficial interest outstanding) $ 10.56
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F5 | CONSERVATIVE INVESTOR FUND STATEMENT OF OPERATIONS Unaudited - -------------------------------------------------------------------------------- For the Six Months Ended July 31, 2008 - -------------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------------- Dividends from affiliated companies $ 8,901,289 - -------------------------------------------------------------------------------------- Interest 6,308 -------------- Total investment income 8,907,597 - -------------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 264,919 Class B 188,889 Class C 539,897 Class N 159,964 - -------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 96,995 Class B 25,902 Class C 68,363 Class N 59,399 Class Y 163 - -------------------------------------------------------------------------------------- Shareholder communications: Class A 17,503 Class B 4,315 Class C 7,622 Class N 1,126 Class Y 13 - -------------------------------------------------------------------------------------- Trustees' compensation 8,827 - -------------------------------------------------------------------------------------- Custodian fees and expenses 1,050 - -------------------------------------------------------------------------------------- Other 17,142 -------------- Total expenses 1,462,089 Less reduction to custodian expenses (108) Less waivers and reimbursements of expenses (176) -------------- Net expenses 1,461,805 - -------------------------------------------------------------------------------------- NET INVESTMENT INCOME 7,445,792 - -------------------------------------------------------------------------------------- REALIZED AND UNREALIZED LOSS - -------------------------------------------------------------------------------------- Net realized loss on investments from affiliated companies (337,982) - -------------------------------------------------------------------------------------- Net change in unrealized depreciation on investments (17,820,869) - -------------------------------------------------------------------------------------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(10,713,059) ==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F6 | CONSERVATIVE INVESTOR FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED ENDED JULY 31, 2008 JANUARY 31, (UNAUDITED) 2008 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ OPERATIONS - ------------------------------------------------------------------------------------------------------------------------ Net investment income $ 7,445,792 $ 13,616,741 - ------------------------------------------------------------------------------------------------------------------------ Net realized gain (loss) (337,982) 3,794,075 - ------------------------------------------------------------------------------------------------------------------------ Net change in unrealized depreciation (17,820,869) (12,522,384) -------------------------------- Net increase (decrease) in net assets resulting from operations (10,713,059) 4,888,432 - ------------------------------------------------------------------------------------------------------------------------ DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - ------------------------------------------------------------------------------------------------------------------------ Dividends from net investment income: Class A -- (7,251,696) Class B -- (1,017,520) Class C -- (3,039,227) Class N -- (1,836,835) Class Y -- (29,725) -------------------------------- -- (13,175,003) - ------------------------------------------------------------------------------------------------------------------------ Distributions from net realized gain: Class A -- (1,026,863) Class B -- (175,905) Class C -- (509,106) Class N -- (274,075) Class Y -- (3,952) -------------------------------- -- (1,989,901) - ------------------------------------------------------------------------------------------------------------------------ BENEFICIAL INTEREST TRANSACTIONS - ------------------------------------------------------------------------------------------------------------------------ Net increase in net assets resulting from beneficial interest transactions: Class A 34,302,534 93,910,947 Class B 6,797,078 13,829,566 Class C 20,660,496 50,792,318 Class N 10,751,401 39,096,928 Class Y 161,642 504,155 -------------------------------- 72,673,151 198,133,914 - ------------------------------------------------------------------------------------------------------------------------ NET ASSETS - ------------------------------------------------------------------------------------------------------------------------ Total increase 61,960,092 187,857,442 - ------------------------------------------------------------------------------------------------------------------------ Beginning of period 392,513,995 204,656,553 -------------------------------- End of period (including accumulated net investment income of $7,598,279 and $152,487, respectively) $ 454,474,087 $392,513,995 ================================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F7 | CONSERVATIVE INVESTOR FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS A (UNAUDITED) 2008 2007 2006 1 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.75 $ 10.93 $ 10.53 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .20 .55 .46 .38 Net realized and unrealized gain (loss) (.44) (.24) .29 .33 ----------------------------------------------------- Total from investment operations (.24) .31 .75 .71 - -------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.43) (.33) (.18) Distributions from net realized gain -- (.06) (.02) -- ----------------------------------------------------- Total dividends and/or distributions to shareholders -- (.49) (.35) (.18) - -------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.51 $ 10.75 $ 10.93 $ 10.53 ===================================================== - -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (2.23)% 2.81% 7.11% 7.15% - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 228,321 $ 199,125 $ 110,378 $ 46,318 - -------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 215,714 $ 154,289 $ 76,542 $ 21,844 - -------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 3.81% 4.93% 4.24% 4.50% Total expenses 5 0.37% 0.35% 0.38% 0.53% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.37% 0.35% 0.38% 0.51% - -------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 10% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 0.92% Year Ended January 31, 2008 0.91% Year Ended January 31, 2007 0.98% Period Ended January 31, 2006 1.19%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F8 | CONSERVATIVE INVESTOR FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS B (UNAUDITED) 2008 2007 2006 1 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.67 $ 10.87 $ 10.49 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .16 .44 .36 .32 Net realized and unrealized gain (loss) (.44) (.22) .30 .32 ---------------------------------------------------- Total from investment operations (.28) .22 .66 .64 - -------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.36) (.26) (.15) Distributions from net realized gain -- (.06) (.02) -- ---------------------------------------------------- Total dividends and/or distributions to shareholders -- (.42) (.28) (.15) - -------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.39 $ 10.67 $ 10.87 $ 10.49 ==================================================== - -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (2.62)% 1.93% 6.28% 6.44% - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 40,859 $ 35,068 $ 21,991 $ 9,163 - -------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 38,019 $ 27,664 $ 15,882 $ 4,018 - -------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 3.01% 4.01% 3.36% 3.74% Total expenses 5 1.17% 1.18% 1.23% 1.39% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.17% 1.18% 1.23% 1.34% - -------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 10% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.72% Year Ended January 31, 2008 1.74% Year Ended January 31, 2007 1.83% Period Ended January 31, 2006 2.05%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F9 | CONSERVATIVE INVESTOR FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS C (UNAUDITED) 2008 2007 2006 1 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.64 $ 10.85 $ 10.48 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .16 .46 .37 .32 Net realized and unrealized gain (loss) (.43) (.24) .29 .31 ----------------------------------------------------- Total from investment operations (.27) .22 .66 .63 - -------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.37) (.27) (.15) Distributions from net realized gain -- (.06) (.02) -- ----------------------------------------------------- Total dividends and/or distributions to shareholders -- (.43) (.29) (.15) - -------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.37 $ 10.64 $ 10.85 $ 10.48 ===================================================== - -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (2.54)% 1.94% 6.28% 6.37% - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 116,647 $ 98,955 $ 50,876 $ 19,145 - -------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 108,671 $ 74,109 $ 35,277 $ 7,647 - -------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 3.03% 4.15% 3.46% 3.78% Total expenses 5 1.15% 1.15% 1.19% 1.36% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 1.15% 1.15% 1.19% 1.33% - -------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 10% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.70% Year Ended January 31, 2008 1.71% Year Ended January 31, 2007 1.79% Period Ended January 31, 2006 2.02%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F10 | CONSERVATIVE INVESTOR FUND
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS N (UNAUDITED) 2008 2007 2006 1 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.70 $ 10.90 $ 10.51 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .19 .53 .44 .41 Net realized and unrealized gain (loss) (.44) (.26) .28 .28 ---------------------------------------------------- Total from investment operations (.25) .27 .72 .69 - -------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.41) (.31) (.18) Distributions from net realized gain -- (.06) (.02) -- ---------------------------------------------------- Total dividends and/or distributions to shareholders -- (.47) (.33) (.18) - -------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.45 $ 10.70 $ 10.90 $ 10.51 ==================================================== - -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (2.34)% 2.43% 6.84% 6.98% - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 67,903 $ 58,762 $ 21,277 $ 7,569 - -------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 64,388 $ 37,891 $ 13,671 $ 2,231 - -------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 3.48% 4.74% 4.08% 4.82% Total expenses 5 0.70% 0.66% 0.66% 0.72% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.70% 0.66% 0.66% 0.71% - -------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 10% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 1.25% Year Ended January 31, 2008 1.22% Year Ended January 31, 2007 1.26% Period Ended January 31, 2006 1.38%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F11 | CONSERVATIVE INVESTOR FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, CLASS Y (UNAUDITED) 2008 2007 2006 1 - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.79 $ 10.96 $ 10.54 $ 10.00 - -------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .22 .64 .49 .38 Net realized and unrealized gain (loss) (.45) (.29) .30 .35 --------------------------------------------------- Total from investment operations (.23) .35 .79 .73 - -------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.46) (.35) (.19) Distributions from net realized gain -- (.06) (.02) -- --------------------------------------------------- Total dividends and/or distributions to shareholders -- (.52) (.37) (.19) - -------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 10.56 $ 10.79 $ 10.96 $ 10.54 =================================================== - -------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 3 (2.13)% 3.15% 7.50% 7.34% - -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - -------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 744 $ 604 $ 135 $ 96 - -------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 647 $ 385 $ 127 $ 71 - -------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 4 Net investment income 4.13% 5.70% 4.57% 4.42% Total expenses 5 0.07% 0.01% 0.06% 0.30% Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses 0.07% 0.01% 0.06% 0.25% - -------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 4% 10% 5% 11%
1. For the period from April 5, 2005 (commencement of operations) to January 31, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Assumes an investment on the business day before the first day of the fiscal period, 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 less than one full year. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. 4. Annualized for periods less than one full year. 5. Total expenses including all underlying fund expenses were as follows: Six Months Ended July 31, 2008 0.62% Year Ended January 31, 2008 0.57% Year Ended January 31, 2007 0.66% Period Ended January 31, 2006 0.96%
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. F12 | CONSERVATIVE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer Portfolio Series (the "Trust") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Conservative Investor Fund (the "Fund") is a series of the Trust whose investment objective is to seek current income with a secondary objective of long-term growth of capital. The Fund is a special type of mutual fund known as a "fund of funds" because it invests in other mutual funds. The Fund normally invests in a diversified portfolio of Oppenheimer mututal funds (individually, an "Underlying Fund" and collectively, the "Underlying Funds"). The Fund's investment adviser 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, however, the institutional investor may impose charges on those accounts. All classes of shares have identical rights and voting privileges with respect to the Fund in general and exclusive voting rights on matters that affect that class alone. Earnings, net assets and net asset value per share may differ due to each class having its own expenses, such as transfer and shareholder servicing agent fees and shareholder communications, directly attributable to that class. Class 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 72 months after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares based upon the net asset value of the applicable Underlying Fund. For each Underlying fund, the net asset value per share for a class of shares is determined as of the close of the New York Stock Exchange (the "Exchange"), normally 4:00 P.M. Eastern time, on each day the Exchange is open for trading by dividing the value of the Underlying Fund's net assets attributable to that class by the number of outstanding shares of that class on that day. Effective for fiscal periods beginning after November 15, 2007, FASB Statement of Financial Accounting Standards No. 157, Fair Value Measurements, establishes a hierarchy for measuring fair value of assets and liabilities. As required by the standard, each investment asset or liability of the Fund is assigned a level at measurement date based on the significance and source of the inputs to its valuation. Quoted prices in active markets for identical assets or liabilities are classified as "Level 1", inputs other than quoted prices for an asset that are observable are classified as "Level 2" and unobservable inputs, including the Manager's judgment about the assumptions that a market participant would use in pricing an asset or liability are classified as "Level 3". The inputs used for valuing assets and liabilities are not necessarily an indication of the risks associated with investing in F13 | CONSERVATIVE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued those assets or liabilities. A table summarizing the Fund's investments under these levels of classification is included following the Statement of Investments. The Fund classifies each of its investments in the Underlying Funds as Level 1, without consideration as to the classification level of the specific investments held by the Underlying Funds. To determine their net asset values, the Underlying Funds' assets are valued primarily on the basis of current market quotations. In the absence of a readily available quoted market price, including for assets whose values have been materially affected by what the Manager identifies as a significant event occurring before the Underlying Fund's assets are valued but after the close of their respective exchanges, the Manager, acting through its internal valuation committee, in good faith determines the fair valuation of that Underlying Fund's assets using consistently applied procedures under the supervision of the Board of Trustees. The methodologies used for valuing assets are not necessarily an indication of the risks associated with investing in those Underlying Funds. The Underlying Funds' investments are classified as Level 1, Level 2 or Level 3 based on the inputs used in determining their value. Investments held by the Underlying Funds are typically classified as Level 1 or Level 2. Fair valued assets may be classified as "Level 3" if the valuation primarily reflects the Manager's own assumptions about the inputs that market participants would use in valuing such securities. There have been no significant changes to the fair valuation methodologies during the period. - -------------------------------------------------------------------------------- RISKS OF INVESTING IN THE UNDERLYING FUNDS. Each of the Underlying Funds in which the Fund invests has its own investment risks, and those risks can affect the value of the Fund's investments and therefore the value of the Fund's shares. To the extent that the Fund invests more of its assets in one Underlying Fund than in another, the Fund will have greater exposure to the risks of that Underlying Fund. - -------------------------------------------------------------------------------- INVESTMENT IN OPPENHEIMER INSTITUTIONAL MONEY MARKET FUND. The Fund is permitted to invest daily available cash balances in an affiliated money market fund. The Fund may invest the available cash in Class E shares of Oppenheimer Institutional Money Market Fund ("IMMF") to seek current income while preserving liquidity. IMMF is a registered open-end management investment company, regulated as a money market fund under the Investment Company Act of 1940, as amended. The Manager is also the investment adviser of IMMF. The Fund's investment in IMMF is included in the Statement of Investments. As a shareholder, the Fund is subject to its proportional share of IMMF's Class E expenses, including its management fee. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated on a daily basis to F14 | CONSERVATIVE INVESTOR FUND 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 comply with provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its investment company 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. The Fund files income tax returns in U.S. federal and applicable state jurisdictions. The statute of limitations on the Fund's tax return filings generally remain open for the three preceding fiscal reporting period ends. As of July 31, 2008, the Fund had available for federal income tax purposes an estimated capital loss carryforward of $337,982 expiring by 2016. This estimated capital loss carryforward represents carryforward as of the end of the last fiscal year, increased for losses deferred under tax accounting rules to the current fiscal year and is increased or decreased by capital losses or gains realized in the first six months of the current fiscal year. During the six months ended July 31, 2008, it is estimated that the Fund will not utilize any capital loss carryforward to offset realized capital gains. 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 aggregate cost of securities and other investments and the composition of unrealized appreciation and depreciation of securities and other investments for federal income tax purposes as of July 31, 2008 are noted in the following table. The primary difference between book and tax appreciation or depreciation of securities and other investments, if applicable, is attributable to the tax deferral of losses or tax realization of financial statement unrealized gain or loss. Federal tax cost of securities $ 478,678,723 ============= Gross unrealized appreciation $ 8,074,262 Gross unrealized depreciation (33,552,048) ------------- Net unrealized depreciation $ (25,477,786) =============
- -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan (the "Plan") for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during their period of service. The Plan was frozen with respect to adding new participants effective December 31, 2006 (the "Freeze Date") and existing Plan Participants as of the Freeze Date will continue to receive accrued benefits under the Plan. Active F15 | CONSERVATIVE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued independent trustees as of the Freeze Date have each elected a distribution method with respect to their benefits under the Plan. During the six months ended July 31, 2008, the Fund's projected benefit obligations, payments to retired trustees and accumulated liability were as follows: Projected Benefit Obligations Increased $ 5,061 Payments Made to Retired Trustees 4 Accumulated Liability as of July 31, 2008 13,824
The Board of Trustees has adopted a compensation deferral plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from the Fund. For purposes of determining the amount owed to the Trustee under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of the Fund or in other Oppenheimer funds selected by the Trustee. The Fund purchases shares of the funds selected for deferral by the Trustee in amounts equal to his or her deemed investment, resulting in a Fund asset equal to the deferred compensation liability. Such assets are included as a component of "Other" within the asset section of the Statement of Assets and Liabilities. 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. Amounts will be deferred until distributed in accordance to the compensation deferral plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations and may differ from U.S. generally accepted accounting principles, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually or at other times as deemed necessary by the Manager. - -------------------------------------------------------------------------------- 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 is recognized on an accrual basis. Discount and premium, which are included in interest income on the Statement of Operations, are amortized or accreted daily. - -------------------------------------------------------------------------------- CUSTODIAN FEES. "Custodian fees and expenses" in the Statement of Operations may include interest expense incurred by the Fund on any cash overdrafts of its custodian account during the period. Such cash overdrafts may result from the effects of failed trades in portfolio securities and from cash outflows resulting from unanticipated shareholder redemption activity. The Fund pays interest to its custodian on such cash overdrafts, to the extent they are not offset by positive cash balances maintained by the Fund, at a rate equal to the Federal Funds Rate plus 0.50%. The "Reduction to custodian expenses" line item, if applicable, represents earnings on cash balances maintained by the F16 | CONSERVATIVE INVESTOR FUND Fund during the period. Such interest expense and other custodian fees may be paid with these earnings. - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- INDEMNIFICATIONS. The Fund's organizational documents provide current and former trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote. - -------------------------------------------------------------------------------- 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 increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, 2008 SHARES AMOUNT SHARES AMOUNT - ----------------------------------------------------------------------------------------------------------------- CLASS A Sold 6,136,018 $ 65,841,490 12,148,307 $ 135,563,875 Dividends and/or distributions reinvested -- -- 690,645 7,559,691 Redeemed (2,941,221) (31,538,956) (4,406,363) (49,212,619) ------------------------------------------------------------------- Net increase 3,194,797 $ 34,302,534 8,432,589 $ 93,910,947 =================================================================== - ----------------------------------------------------------------------------------------------------------------- CLASS B Sold 1,400,415 $ 14,907,906 2,029,631 $ 22,343,722 Dividends and/or distributions reinvested -- -- 105,016 1,140,471 Redeemed (755,636) (8,110,828) (870,723) (9,654,627) ------------------------------------------------------------------- Net increase 644,779 $ 6,797,078 1,263,924 $ 13,829,566 =================================================================== - ----------------------------------------------------------------------------------------------------------------- CLASS C Sold 3,544,987 $ 37,620,515 6,283,929 $ 69,461,639 Dividends and/or distributions reinvested -- -- 294,395 3,191,243 Redeemed (1,592,370) (16,960,019) (1,969,339) (21,860,564) ------------------------------------------------------------------- Net increase 1,952,617 $ 20,660,496 4,608,985 $ 50,792,318 ===================================================================
F17 | CONSERVATIVE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED JULY 31, 2008 YEAR ENDED JANUARY 31, 2008 SHARES AMOUNT SHARES AMOUNT - ---------------------------------------------------------------------------------------------------------------- CLASS N Sold 2,045,027 $ 21,844,170 5,418,049 $ 60,119,664 Dividends and/or distributions reinvested -- -- 166,742 1,815,822 Redeemed (1,037,035) (11,092,769) (2,044,399) (22,838,558) ------------------------------------------------------------------- Net increase 1,007,992 $ 10,751,401 3,540,392 $ 39,096,928 =================================================================== - ---------------------------------------------------------------------------------------------------------------- CLASS Y Sold 26,636 $ 291,109 70,557 $ 802,208 Dividends and/or distributions reinvested -- -- 2,971 32,626 Redeemed (12,173) (129,467) (29,847) (330,679) ------------------------------------------------------------------- Net increase 14,463 $ 161,642 43,681 $ 504,155 ===================================================================
- -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations and investments in IMMF, for the six months ended July 31, 2008, were as follows:
PURCHASES SALES ------------------------------------------------------------------- Investment securities $ 103,378,389 $ 18,686,303
- -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES MANAGEMENT FEES. Under the investment advisory agreement, the Manager does not charge a management fee, but rather collects indirect management fees from investments in the Underlying Funds and the Fund's investment in IMMF. The weighted indirect management fees collected from the Underlying Funds and the Fund's Investment in IMMF, as a percent of average daily net assets of the Fund for the six months ended July 31, 2008 was 0.52%. - -------------------------------------------------------------------------------- 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 per account fee. For the six months ended July 31, 2008, the Fund paid $232,930 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 annually 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. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLAN (12b-1) FEES. Under its General Distributor's Agreement with the Fund, OppenheimerFunds Distributor, Inc. (the "Distributor") acts as the Fund's principal underwriter in the continuous public offering of the Fund's classes of shares. F18 | CONSERVATIVE INVESTOR FUND - -------------------------------------------------------------------------------- SERVICE PLAN FOR CLASS A SHARES. The Fund has adopted a Service Plan (the "Plan") for Class A shares under Rule 12b-1 of the Investment Company Act of 1940. Under the Plan, the Fund reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made periodically 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 periodically for providing personal service and maintenance of accounts of their customers that hold Class A shares. Any unreimbursed expenses the Distributor incurs with respect to Class A shares in any fiscal year cannot be recovered in subsequent periods. Fees incurred by the Fund under the Plan are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- DISTRIBUTION AND SERVICE PLANS FOR CLASS B, CLASS C AND CLASS N SHARES. The Fund has adopted Distribution and Service Plans (the "Plans") for Class B, Class C and Class N shares under Rule 12b-1 of the Investment Company Act of 1940 to compensate the Distributor for its services in connection with the distribution of those 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 each plan. If either the Class B, Class C or Class N plan is terminated by the Fund or by the shareholders of a class, the Board of Trustees and its independent trustees must determine whether the Distributor shall be entitled to payment from the Fund of all or a portion of the service fee and/or asset-based sales charge in respect to shares sold prior to the effective date of such termination. The Distributor's aggregate uncompensated expenses under the Plans at June 30, 2008 for Class B, Class C and Class N shares were $534,001, $809,892 and $713,619, respectively. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations. - -------------------------------------------------------------------------------- SALES CHARGES. Front-end sales charges and contingent deferred sales charges ("CDSC") do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. The sales charges retained by the Distributor from the sale of shares and the CDSC retained by the Distributor on the redemption of shares is shown in the following table for the period indicated.
CLASS A CLASS B CLASS C CLASS N CLASS A CONTINGENT CONTINGENT CONTINGENT CONTINGENT FRONT-END DEFERRED DEFERRED DEFERRED DEFERRED SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES SALES CHARGES RETAINED BY RETAINED BY RETAINED BY RETAINED BY RETAINED BY SIX MONTHS ENDED DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR DISTRIBUTOR - --------------------------------------------------------------------------------------------------------- July 31, 2008 $235,261 $4,340 $87,294 $14,619 $648
F19 | CONSERVATIVE INVESTOR FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued WAIVERS AND REIMBURSEMENTS OF EXPENSES. The Manager has voluntarily agreed to a total expense limitation on the aggregate amount of combined direct (fund-of-funds level) and indirect expense so that "Total expenses" as a percentage of average daily net assets will not exceed the following annual rates: 1.25%, 2.00%, 2.00%, 1.50% and 1.00%, for Class A, Class B, Class C, Class N and Class Y, respectively. The Manager may modify or terminate this undertaking at any time without notice to shareholders. These expense limitations do not include extraordinary expenses and other expenses not incurred in the ordinary course of the Fund's business. Notwithstanding the foregoing limits, the Manager is not required to waive or reimburse Fund expenses in excess of indirect management fees earned from investments in Underlying Funds to assure that expenses do not exceed those limits. OFS has voluntarily agreed to limit transfer and shareholder servicing agent fees for all classes to 0.35% of average annual net assets per class. This undertaking may be amended or withdrawn at any time. Prior to June 1, 2008, the Manager waived fees and/or reimbursed Fund expenses in an amount equal to the indirect management fees incurred through the Fund's investment in IMMF. During the six months ended July 31, 2008, the Manager waived $176 for IMMF management fees. - -------------------------------------------------------------------------------- 5. RECENT ACCOUNTING PRONOUNCEMENT In March 2008, the Financial Accounting Standards Board ("FASB") issued Statement on Financial Accounting Standards ("SFAS") No. 161, DISCLOSURES ABOUT DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This standard requires enhanced disclosures about derivative and hedging activities, including qualitative disclosures about how and why the Fund uses derivative instruments, how these activities are accounted for, and their effect on the Fund's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. At this time, management is evaluating the implications of SFAS No. 161 and its impact on the Fund's financial statements and related disclosures. F20 | CONSERVATIVE INVESTOR FUND PORTFOLIO PROXY VOTING POLICIES AND PROCEDURES; UPDATES TO STATEMENTS OF INVESTMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The Fund has adopted Portfolio Proxy Voting Policies and Procedures under which the Fund votes proxies relating to securities ("portfolio proxies") held by the Fund. A description of the Fund's Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, (ii) on the Fund's website at www.oppenheimerfunds.com, and (iii) on the SEC's website at www.sec.gov. In addition, the Fund is required to file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Fund's voting record is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.525.7048, and (ii) in the Form N-PX filing on the SEC's website at www.sec.gov. The Fund files its complete schedule of portfolio holdings with the SEC for the first quarter and the third quarter of each fiscal year on Form N-Q. The Fund's Form N-Q filings are available on the SEC's website at http://www.sec.gov. Those forms may 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 1-800-SEC-0330. 15 | CONSERVATIVE INVESTOR FUND ITEM 2. CODE OF ETHICS. Not applicable to semiannual reports. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable to semiannual reports. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable to semiannual reports. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Not applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. THE FUND'S GOVERNANCE COMMITTEE PROVISIONS WITH RESPECT TO NOMINATIONS OF DIRECTORS/TRUSTEES TO THE RESPECTIVE BOARDS 1. The Fund's Governance Committee (the "Committee") will evaluate potential Board candidates to assess their qualifications. The Committee shall have the authority, upon approval of the Board, to retain an executive search firm to assist in this effort. The Committee may consider recommendations by business and personal contacts of current Board members and by executive search firms which the Committee may engage from time to time and may also consider shareholder recommendations. The Committee may consider the advice and recommendation of the Funds' investment manager and its affiliates in making the selection. 2. The Committee shall screen candidates for Board membership. The Committee has not established specific qualifications that it believes must be met by a trustee nominee. In evaluating trustee nominees, the Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the Investment Company Act of 1940; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the Board. There are no differences in the manner in which the Committee evaluates nominees for trustees based on whether the nominee is recommended by a shareholder. 3. The Committee may consider nominations from shareholders for the Board at such times as the Committee meets to consider new nominees for the Board. The Committee shall have the sole discretion to determine the candidates to present to the Board and, in such cases where required, to shareholders. Recommendations for trustee nominees should, at a minimum, be accompanied by the following: - the name, address, and business, educational, and/or other pertinent background of the person being recommended; - a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; - any other information that the Funds would be required to include in a proxy statement concerning the person if he or she was nominated; and - the name and address of the person submitting the recommendation and, if that person is a shareholder, the period for which that person held Fund shares. The recommendation also can include any additional information which the person submitting it believes would assist the Committee in evaluating the recommendation. 4. Shareholders should note that a person who owns securities issued by Massachusetts Mutual Life Insurance Company (the parent company of the Funds' investment adviser) would be deemed an "interested person" under the Investment Company Act of 1940. In addition, certain other relationships with Massachusetts Mutual Life Insurance Company or its subsidiaries, with registered broker-dealers, or with the Funds' outside legal counsel may cause a person to be deemed an "interested person." 5. Before the Committee decides to nominate an individual as a trustee, Committee members and other directors customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving as a trustee of a registered investment company. ITEM 11. CONTROLS AND PROCEDURES. Based on their evaluation of the registrant's disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c)) as of 07/31/2008, the registrant's principal executive officer and principal financial officer found the registrant's disclosure controls and procedures to provide reasonable assurances that information required to be disclosed by the registrant in the reports that it files under the Securities Exchange Act of 1934 (a) is accumulated and communicated to registrant's management, including its principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure, and (b) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms adopted by the U.S. Securities and Exchange Commission. There have been no changes in the registrant's internal controls over financial reporting that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a) (1) Not applicable to semiannual reports. (2) Exhibits attached hereto. (3) Not applicable. (b) Exhibit attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Oppenheimer Portfolio Series By: /s/ John V. Murphy --------------------------- John V. Murphy Principal Executive Officer Date: 09/12/2008 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ John V. Murphy --------------------------- John V. Murphy Principal Executive Officer Date: 09/12/2008 By: /s/ Brian W. Wixted --------------------------- Brian W. Wixted Principal Financial Officer Date: 09/12/2008 EX-99.CERT 2 rs540_48843cert302.txt RS540_48843CERT302.TXT Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, John V. Murphy, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Portfolio Series; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 09/12/2008 /s/ John V. Murphy - --------------------------- John V. Murphy Principal Executive Officer Exhibit 99.CERT Section 302 Certifications CERTIFICATIONS I, Brian W. Wixted, certify that: 1. I have reviewed this report on Form N-CSR of Oppenheimer Portfolio Series; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of Trustees (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: 09/12/2008 /s/ Brian W. Wixted - --------------------------- Brian W. Wixted Principal Financial Officer EX-99.906CERT 3 rs540_48843cert906.txt RS540_48843CERT906.TXT EX-99.906CERT Section 906 Certifications CERTIFICATION PURSUANT TO 18 U.S.C SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 John V. Murphy, Principal Executive Officer, and Brian W. Wixted, Principal Financial Officer, of Oppenheimer Portfolio Series (the "Registrant"), each certify to the best of his knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended 07/31/2008 (the "Form N-CSR") fully complies with the requirements of Section 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer Portfolio Series Oppenheimer Portfolio Series /s/ John V. Murphy /s/ Brian W. Wixted - ---------------------------- ---------------------------- John V. Murphy Brian W. Wixted Date: 09/12/2008 Date: 09/12/2008 -----END PRIVACY-ENHANCED MESSAGE-----