-----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, TT3NbbxjRVFUcpCZzzjcDZ95gJ/dCX3kHK0Yf1eg/X7HtRddVy5R4qyR/26VQQuo Y3kCKI0cXB3YvxtfjOzlnA== 0000935069-06-003442.txt : 20061228 0000935069-06-003442.hdr.sgml : 20061228 20061228131536 ACCESSION NUMBER: 0000935069-06-003442 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061031 FILED AS OF DATE: 20061228 DATE AS OF CHANGE: 20061228 EFFECTIVENESS DATE: 20061228 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Oppenheimer International Diversified Fund CENTRAL INDEX KEY: 0001329067 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0407 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-21775 FILM NUMBER: 061302244 BUSINESS ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112 BUSINESS PHONE: 303-768-3200 MAIL ADDRESS: STREET 1: 6803 SOUTH TUCSON WAY CITY: CENTENNIAL STATE: CO ZIP: 80112 0001329067 S000008825 Oppenheimer International Diversified Fund C000024038 A C000024039 B C000024040 C C000024041 N C000024042 Y N-CSRS 1 rs195_35961ncsrs.txt RS195_35961NCSRS.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 811-21775 OPPENHEIMER INTERNATIONAL DIVESIFIED FUND (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: APRIL 30 Date of reporting period: OCTOBER 31, 2006 ITEM 1. REPORTS TO STOCKHOLDERS. TOP HOLDINGS AND ALLOCATIONS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ASSET CLASS ALLOCATION [THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.] Global Equity 90.4% Fixed Income 9.6 Portfolio holdings and allocations are subject to change. Percentages are as of October 31, 2006, and are based on the total market value of investments in affiliated companies. - -------------------------------------------------------------------------------- 9 | OPPENHEIMER INTERNATIONAL DIVERSIFIED 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. Cumulative total returns are not annualized. 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 fund holdings does not constitute a recommendation by OppenheimerFunds, Inc. Please remember this Fund has a limited operating history. CLASS A shares of the Fund were first offered on 9/27/05. 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 9/27/05. Unless otherwise noted, Class B returns include the applicable contingent deferred sales charge of 5% (1-year) and 4% (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 9/27/05. 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 9/27/05. 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 9/27/05. Class Y shares are offered only to certain institutional investors under special agreement with the Distributor. An explanation of the calculation of performance is in the Fund's Statement of Additional Information. 10 | OPPENHEIMER INTERNATIONAL DIVERSIFIED 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 any; 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 October 31, 2006. ACTUAL EXPENSES. The "actual" lines of the table provide information about actual account values and actual expenses. You may use the information on this line 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 "actual" line 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 "hypothetical" lines of the table provide 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 before expenses, which is not the Fund's 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 11 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND FUND EXPENSES - -------------------------------------------------------------------------------- the Statement of Additional Information). Therefore, the "hypothetical" lines of the table are 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 (5/1/06) (10/31/06) OCTOBER 31, 2006 - -------------------------------------------------------------------------------- Class A Actual $1,000.00 $1,020.30 $1.94 - -------------------------------------------------------------------------------- Class A Hypothetical 1,000.00 1,023.29 1.94 - -------------------------------------------------------------------------------- Class B Actual 1,000.00 1,016.20 6.47 - -------------------------------------------------------------------------------- Class B Hypothetical 1,000.00 1,018.80 6.48 - -------------------------------------------------------------------------------- Class C Actual 1,000.00 1,016.20 5.86 - -------------------------------------------------------------------------------- Class C Hypothetical 1,000.00 1,019.41 5.87 - -------------------------------------------------------------------------------- Class N Actual 1,000.00 1,018.70 3.52 - -------------------------------------------------------------------------------- Class N Hypothetical 1,000.00 1,021.73 3.52 - -------------------------------------------------------------------------------- Class Y Actual 1,000.00 1,022.80 (0.31) 1 - -------------------------------------------------------------------------------- Class Y Hypothetical 1,000.00 1,025.51 (0.31) 1 Hypothetical assumes 5% annual return before expenses. Expenses are equal to the Fund's annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). Those annualized expense ratios, excluding all underlying fund expenses, based on the 6-month period ended October 31, 2006 are as follows: CLASS EXPENSE RATIOS - --------------------------- Class A 0.38% - --------------------------- Class B 1.27 - --------------------------- Class C 1.15 - --------------------------- Class N 0.69 - --------------------------- Class Y (0.06) 1 The expense ratios reflect 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. 1. The amount of indirect expenses reimbursed for the class exceed the amount of direct expenses that it incurred. - -------------------------------------------------------------------------------- 12 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND STATEMENT OF INVESTMENTS October 31, 2006 / Unaudited - --------------------------------------------------------------------------------
VALUE SHARES SEE NOTE 1 - ------------------------------------------------------------------------------------------------------------------------------- INVESTMENTS IN AFFILIATED COMPANIES--99.1% 1 - ------------------------------------------------------------------------------------------------------------------------------- FIXED INCOME--9.5% Oppenheimer International Bond Fund, Cl. Y 10,245,714 $ 60,654,628 - ------------------------------------------------------------------------------------------------------------------------------- GLOBAL EQUITY--89.6% Oppenheimer Developing Markets Fund, Cl. Y 2,271,622 93,227,378 - ------------------------------------------------------------------------------------------------------------------------------- Oppenheimer International Growth Fund, Cl. Y 7,478,368 192,717,548 - ------------------------------------------------------------------------------------------------------------------------------- Oppenheimer International Small Company Fund, Cl. Y 3,812,520 96,304,257 - ------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Quest International Value Fund, Inc., Cl. A 8,736,512 192,115,894 --------------- 574,365,077 --------------- Total Investments in Affiliated Companies (Cost $589,220,387) 635,019,705 PRINCIPAL AMOUNT - ------------------------------------------------------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS--0.3% - ------------------------------------------------------------------------------------------------------------------------------- Undivided interest of 1.87% in joint repurchase agreement (Principal Amount/Value $106,853,000, with a maturity value of $106,868,612) with UBS Warburg LLC, 5.26%, dated 10/31/06, to be repurchased at $2,001,292 on 11/1/06, collateralized by Federal National Mortgage Assn., 6.50%, 10/1/36, with a value of $109,133,594 (Cost $2,001,000) $ 2,001,000 2,001,000 - ------------------------------------------------------------------------------------------------------------------------------- TOTAL INVESTMENTS, AT VALUE (COST $591,221,387) 99.4% 637,020,705 - ------------------------------------------------------------------------------------------------------------------------------- OTHER ASSETS NET OF LIABILITIES 0.6 3,832,137 ------------------------------- NET ASSETS 100.0% $ 640,852,842 ===============================
13 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND STATEMENT OF INVESTMENTS Unaudited / Continued - -------------------------------------------------------------------------------- FOOTNOTE TO STATEMENT OF INVESTMENTS 1. Represents ownership of an affiliated fund, at or during the period ended October 31, 2006. Transactions during the period in which the issuer was an affiliate are as follows:
SHARES GROSS GROSS SHARES APRIL 30, 2006 ADDITIONS REDUCTIONS OCT. 31, 2006 - ------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Developing Markets Fund, Cl. Y 1,059,927 1,217,791 6,096 2,271,622 Oppenheimer International Bond Fund, Cl. Y 4,712,831 5,560,019 27,136 10,245,714 Oppenheimer International Growth Fund, Cl. Y* 3,587,686 3,910,000 19,318 7,478,368 Oppenheimer International Small Company Fund, Cl. Y 1,824,425 1,998,196 10,101 3,812,520 Oppenheimer Quest International Value Fund, Inc., Cl. A* 4,227,659 4,531,298 22,445 8,736,512
VALUE DIVIDEND REALIZED SEE NOTE 1 INCOME LOSS - ------------------------------------------------------------------------------------------------------------------------------- Oppenheimer Developing Markets Fund, Cl. Y $ 93,227,378 $ -- $ 34,461 Oppenheimer International Bond Fund, Cl. Y 60,654,628 922,083 6,019 Oppenheimer International Growth Fund, Cl. Y* 192,717,548 -- 25,352 Oppenheimer International Small Company Fund, Cl. Y 96,304,257 -- 39,142 Oppenheimer Quest International Value Fund, Inc., Cl. A* 192,115,894 -- 17,884 ------------------------------------------------ $ 635,019,705 $ 922,083 $ 122,858 ================================================
* Represents at least 5% of the voting securities of the issuer, and is or was an affiliate, as defined in the Investment Company Act of 1940. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 14 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND STATEMENT OF ASSETS AND LIABILITIES Unaudited - --------------------------------------------------------------------------------
October 31, 2006 - -------------------------------------------------------------------------------------------------------------------------------- ASSETS - -------------------------------------------------------------------------------------------------------------------------------- Investments, at value--see accompanying statement of investments: Unaffiliated companies (cost $2,001,000) $ 2,001,000 Affiliated companies (cost $589,220,387) 635,019,705 ---------------- 637,020,705 - -------------------------------------------------------------------------------------------------------------------------------- Cash 118,480 - -------------------------------------------------------------------------------------------------------------------------------- Receivables and other assets: Shares of beneficial interest sold 7,052,687 Interest 175,710 Other 1,999 ---------------- Total assets 644,369,581 - -------------------------------------------------------------------------------------------------------------------------------- LIABILITIES - -------------------------------------------------------------------------------------------------------------------------------- Payables and other liabilities: Investments purchased 2,257,187 Shares of beneficial interest redeemed 945,566 Distribution and service plan fees 124,904 Transfer and shareholder servicing agent fees 84,076 Shareholder communications 80,826 Trustees' compensation 10,298 Other 13,882 ---------------- Total liabilities 3,516,739 - -------------------------------------------------------------------------------------------------------------------------------- NET ASSETS $ 640,852,842 ================ - -------------------------------------------------------------------------------------------------------------------------------- COMPOSITION OF NET ASSETS - -------------------------------------------------------------------------------------------------------------------------------- Par value of shares of beneficial interest $ 53,348 - -------------------------------------------------------------------------------------------------------------------------------- Additional paid-in capital 594,936,876 - -------------------------------------------------------------------------------------------------------------------------------- Accumulated net investment loss (630,991) - -------------------------------------------------------------------------------------------------------------------------------- Accumulated net realized gain on investments 694,291 - -------------------------------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments 45,799,318 ---------------- NET ASSETS $ 640,852,842 ================
15 | OPPENHEIMER INTERNATIONAL DIVERSIFIED 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 $381,190,985 and 31,640,375 shares of beneficial interest outstanding) $ 12.05 Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price) $ 12.79 - ---------------------------------------------------------------------------------------------------- Class B Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $67,049,537 and 5,612,383 shares of beneficial interest outstanding) $ 11.95 - ---------------------------------------------------------------------------------------------------- Class C Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $174,749,307 and 14,609,749 shares of beneficial interest outstanding) $ 11.96 - ---------------------------------------------------------------------------------------------------- Class N Shares: Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $16,022,900 and 1,333,144 shares of beneficial interest outstanding) $ 12.02 - ---------------------------------------------------------------------------------------------------- Class Y Shares: Net asset value, redemption price and offering price per share (based on net assets of $1,840,113 and 151,998 shares of beneficial interest outstanding) $ 12.11
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 16 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND STATEMENT OF OPERATIONS Unaudited - --------------------------------------------------------------------------------
For the Six Months Ended October 31, 2006 - -------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME - -------------------------------------------------------------------------------------------------------------------------------- Dividends: Affiliated companies $ 922,083 - -------------------------------------------------------------------------------------------------------------------------------- Interest 66,520 ---------------- Total investment income 988,603 - -------------------------------------------------------------------------------------------------------------------------------- EXPENSES - -------------------------------------------------------------------------------------------------------------------------------- Distribution and service plan fees: Class A 343,954 Class B 248,241 Class C 640,336 Class N 25,207 - -------------------------------------------------------------------------------------------------------------------------------- Transfer and shareholder servicing agent fees: Class A 217,600 Class B 66,197 Class C 110,075 Class N 10,934 Class Y 25 - -------------------------------------------------------------------------------------------------------------------------------- Shareholder communications: Class A 53,020 Class B 17,732 Class C 25,548 Class N 1,891 Class Y 3 - -------------------------------------------------------------------------------------------------------------------------------- Trustees' compensation 11,545 - -------------------------------------------------------------------------------------------------------------------------------- Custodian fees and expenses 903 - -------------------------------------------------------------------------------------------------------------------------------- Other 19,570 ---------------- Total expenses 1,792,781 Less reduction to custodian expenses (139) Less waivers and reimbursements of expenses (174,435) ---------------- Net expenses 1,618,207 - -------------------------------------------------------------------------------------------------------------------------------- NET INVESTMENT LOSS (629,604) - -------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) - -------------------------------------------------------------------------------------------------------------------------------- Net realized loss on investments from affiliated companies (122,858) - -------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation on investments 25,276,293 - -------------------------------------------------------------------------------------------------------------------------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 24,523,831 ================
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 17 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
SIX MONTHS PERIOD ENDED ENDED OCT. 31, 2006 APRIL 30, (UNAUDITED) 2006 1 - --------------------------------------------------------------------------------------------------------------------------------- OPERATIONS - --------------------------------------------------------------------------------------------------------------------------------- Net investment income (loss) $ (629,604) $ 904,762 - --------------------------------------------------------------------------------------------------------------------------------- Net realized gain (loss) (122,858) 1,083,824 - --------------------------------------------------------------------------------------------------------------------------------- Net change in unrealized appreciation 25,276,293 20,523,025 -------------------------------------- Net increase in net assets resulting from operations 24,523,831 22,511,611 - --------------------------------------------------------------------------------------------------------------------------------- DIVIDENDS AND/OR DISTRIBUTIONS TO SHAREHOLDERS - --------------------------------------------------------------------------------------------------------------------------------- Dividends from net investment income: Class A -- (712,897) Class B -- (128,919) Class C -- (221,423) Class N -- (13,342) Class Y -- (2,866) - --------------------------------------------------------------------------------------------------------------------------------- BENEFICIAL INTEREST TRANSACTIONS - --------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets resulting from beneficial interest transactions: Class A 183,370,440 169,798,646 Class B 30,778,857 31,525,125 Class C 83,874,840 78,877,189 Class N 9,250,411 5,634,714 Class Y 378,798 1,303,827 - --------------------------------------------------------------------------------------------------------------------------------- NET ASSETS - --------------------------------------------------------------------------------------------------------------------------------- Total increase 332,177,177 308,571,665 - --------------------------------------------------------------------------------------------------------------------------------- Beginning of period 308,675,665 104,000 2 -------------------------------------- End of period (including accumulated net investment loss of $630,991 and $1,387, respectively) $ 640,852,842 $ 308,675,665 ======================================
1. For the period from September 27, 2005 (commencement of operations) to April 30, 2006. 2. Reflects the value of the Manager's initial seed money investment on August 25, 2005. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 18 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
SIX MONTHS PERIOD ENDED ENDED OCT. 31, 2006 APRIL 30, CLASS A (UNAUDITED) 2006 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.81 $ 10.00 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 -- 3,4 .14 5 Net realized and unrealized gain .24 1.91 --------------------------------------- Total from investment operations .24 2.05 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.24) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.05 $ 11.81 ======================================= - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 6 2.03% 20.81% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 381,191 $ 182,910 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 275,477 $ 56,852 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net asses: 7 Net investment income 0.04% 4 2.10% 5 Total expenses 0.46% 8 0.53% 8 Expenses after waivers and reduction to custodian expenses 0.38% 0.46% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 0% 9 0% 9
1. For the period from September 27, 2005 (commencement of operations) to April 30, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Less than $0.005 per share. 4. Net investment income per share and the net investment income ratio include $.02 and 0.39%, respectively, resulting from dividends received from Oppenheimer International Bond Fund for the six months ended October 31, 2006. 5. Net investment income per share and the net investment income ratio include $.07 and 0.63%, respectively, resulting from a dividend received from Oppenheimer Quest International Value Fund, Inc. in December 2005. 6. 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 of 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. 7. Annualized for periods of less than one full year. 8. Expenses paid including all underlying fund expenses were as follows: Six Months Ended October 31, 2006 1.37% Period Ended April 30, 2006 1.43% 9. Less than 0.005%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 19 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS PERIOD ENDED ENDED OCT. 31, 2006 APRIL 30, CLASS B (UNAUDITED) 2006 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.76 $ 10.00 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 (.05) 3 .09 4 Net realized and unrealized gain .24 1.90 --------------------------------------- Total from investment operations .19 1.99 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.23) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.95 $ 11.76 ======================================= - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 5 1.62% 20.20% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 67,050 $ 33,843 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 49,429 $ 10,159 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 6 Net investment income (loss) (0.85)% 3 1.34% 4 Total expenses 1.35% 7 1.42% 7 Expenses after waivers and reduction to custodian expenses 1.27% 1.35% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 0% 8 0% 8
1. For the period from September 27, 2005 (commencement of operations) to April 30, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.02 and 0.39%, respectively, resulting from dividends received from Oppenheimer International Bond Fund for the six months ended October 31, 2006. 4. Net investment income per share and the net investment income ratio include $.07 and 0.63%, respectively, resulting from a dividend received from Oppenheimer Quest International Value Fund, Inc. in December 2005. 5. 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 of 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. 6. Annualized for periods of less than one full year. 7. Expenses paid including all underlying fund expenses were as follows: Six Months Ended October 31, 2006 2.26% Period Ended April 30, 2006 2.32% 8. Less than 0.005%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 20 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND
SIX MONTHS PERIOD ENDED ENDED OCT. 31, 2006 APRIL 30, CLASS C (UNAUDITED) 2006 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.77 $ 10.00 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 (.04) 3 .04 4 Net realized and unrealized gain .23 1.96 --------------------------------------- Total from investment operations .19 2.00 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.23) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 11.96 $ 11.77 ======================================= - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 5 1.62% 20.31% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 174,749 $ 84,529 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 127,566 $ 24,928 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 6 Net investment income (loss) (0.72)% 3 0.67% 4 Total expenses 1.22% 7 1.28% 7 Expenses after waivers and reduction to custodian expenses 1.15% 1.21% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 0% 8 0% 8
1. For the period from September 27, 2005 (commencement of operations) to April 30, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.02 and 0.39%, respectively, resulting from dividends received from Oppenheimer International Bond Fund for the six months ended October 31, 2006. 4. Net investment income per share and the net investment income ratio include $.07 and 0.63%, respectively, resulting from a dividend received from Oppenheimer Quest International Value Fund, Inc. in December 2005. 5. 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 of 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. 6. Annualized for periods of less than one full year. 7. Expenses paid including all underlying fund expenses were as follows: Six Months Ended October 31, 2006 2.14% Period Ended April 30, 2006 2.18% 8. Less than 0.005%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 21 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND FINANCIAL HIGHLIGHTS Continued - --------------------------------------------------------------------------------
SIX MONTHS PERIOD ENDED ENDED OCT. 31, 2006 APRIL 30, CLASS N (UNAUDITED) 2006 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.80 $ 10.00 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income (loss) 2 (.02) 3 .10 4 Net realized and unrealized gain .24 1.93 --------------------------------------- Total from investment operations .22 2.03 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.23) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.02 $ 11.80 ======================================= - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 5 1.87% 20.66% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 16,023 $ 5,989 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 10,045 $ 1,477 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 6 Net investment income (loss) (0.27)% 3 1.61% 4 Total expenses 0.76% 7 0.79% 7 Expenses after waivers and reduction to custodian expenses 0.69% 0.72% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 0% 8 0% 8
1. For the period from September 27, 2005 (commencement of operations) to April 30, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.02 and 0.39%, respectively, resulting from dividends received from Oppenheimer International Bond Fund for the six months ended October 31, 2006. 4. Net investment income per share and the net investment income ratio include $.07 and 0.63%, respectively, resulting from a dividend received from Oppenheimer Quest International Value Fund, Inc. in December 2005. 5. 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 of 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. 6. Annualized for periods of less than one full year. 7. Expenses paid including all underlying fund expenses were as follows: Six Months Ended October 31, 2006 1.68% Period Ended April 30, 2006 1.69% 8. Less than 0.005%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 22 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND
SIX MONTHS PERIOD ENDED ENDED OCT. 31, 2006 APRIL 30, CLASS Y (UNAUDITED) 2006 1 - ---------------------------------------------------------------------------------------------------------------------------------- PER SHARE OPERATING DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.84 $ 10.00 - ---------------------------------------------------------------------------------------------------------------------------------- Income (loss) from investment operations: Net investment income 2 .03 3 .09 4 Net realized and unrealized gain .24 1.99 --------------------------------------- Total from investment operations .27 2.08 - ---------------------------------------------------------------------------------------------------------------------------------- Dividends and/or distributions to shareholders: Dividends from net investment income -- (.24) - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, end of period $ 12.11 $ 11.84 ======================================= - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN, AT NET ASSET VALUE 5 2.28% 21.16% - ---------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------- RATIOS/SUPPLEMENTAL DATA - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period (in thousands) $ 1,840 $ 1,405 - ---------------------------------------------------------------------------------------------------------------------------------- Average net assets (in thousands) $ 1,489 $ 469 - ---------------------------------------------------------------------------------------------------------------------------------- Ratios to average net assets: 6 Net investment income 0.48% 3 1.41% 4 Total expenses 0.02% 7 0.08% 7 Expenses after waivers and reduction to custodian expenses (0.06)% 8 0.01% - ---------------------------------------------------------------------------------------------------------------------------------- Portfolio turnover rate 0% 9 0% 9
1. For the period from September 27, 2005 (commencement of operations) to April 30, 2006. 2. Per share amounts calculated based on the average shares outstanding during the period. 3. Net investment income per share and the net investment income ratio include $.02 and 0.39%, respectively, resulting from dividends received from Oppenheimer International Bond Fund for the six months ended October 31, 2006. 4. Net investment income per share and the net investment income ratio include $.07 and 0.63%, respectively, resulting from a dividend received from Oppenheimer Quest International Value Fund, Inc. in December 2005. 5. 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 of 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. 6. Annualized for periods of less than one full year. 7. Expenses paid including all underlying fund expenses were as follows: Six Months Ended October 31, 2006 0.93% Period Ended April 30, 2006 0.98% 8. The amount of indirect expenses reimbursed for the class exceed the amount of direct expenses that it incurred. 9. Less than 0.005%. SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS. 23 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND NOTES TO FINANCIAL STATEMENTS Unaudited - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Oppenheimer International Diversified Fund (the "Fund") is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund's investment objective is to seek to achieve a high total return through both capital appreciation and 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 portfolio consisting of a target-weighted allocation in Class A or Class Y shares of other Oppenheimer funds. The Fund's investment advisor is OppenheimerFunds, Inc. (the "Manager"). The Fund offers Class A, Class B, Class C, Class N and Class Y shares. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class B, Class C and Class N shares are sold without a front-end sales charge but may be subject to a contingent deferred sales charge (CDSC). Class N shares are sold only through retirement plans. Retirement plans that offer Class N shares may impose charges on those accounts. Class Y shares are sold to certain institutional investors without either a front-end sales charge or a CDSC, 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 six years after the date of purchase. The following is a summary of significant accounting policies consistently followed by the Fund. - -------------------------------------------------------------------------------- SECURITIES VALUATION. The Fund calculates the net asset value of its shares 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 business. Securities may be valued primarily using dealer-supplied valuations or a portfolio pricing service authorized by the Board of Trustees. Securities listed or traded on National Stock Exchanges or other domestic exchanges are valued based on the last sale price of the security traded on that exchange prior to the time when the Fund's assets are valued. Securities traded on NASDAQ(R) are valued based on the closing price provided by NASDAQ prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the last sale price on the prior trading day, if it is within the spread of the closing "bid" and "asked" prices, and if not, at the closing bid price. Securities traded on foreign exchanges are valued based on the last sale price on the principal exchange on which the security is traded, as identified by the portfolio pricing service, prior to the time when the Fund's assets are valued. In the absence of a sale, the security is valued at the official closing price on the principal exchange. Corporate, government and municipal debt instruments having a remaining maturity in excess of sixty days and all mortgage-backed securities 24 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND will be valued at the mean between the "bid" and "asked" prices. 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. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value. Foreign and domestic securities whose values have been materially affected by what the Manager identifies as a significant event occurring before the Fund's assets are valued but after the close of their respective exchanges will be fair valued. Fair value is determined in good faith using consistently applied procedures under the supervision of the Board of Trustees. Investments in open-end registered investment companies are valued at that fund's net asset value. Short-term "money market type" debt securities with remaining maturities of sixty days or less are valued at amortized cost (which approximates market value). - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- JOINT REPURCHASE AGREEMENTS. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated funds advised by the Manager, may transfer uninvested cash balances into joint trading accounts on a daily basis. These balances are invested in one or more repurchase agreements. Securities pledged as collateral for repurchase agreements are held by a custodian bank until the agreements mature. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal. In the event of default by the other party to the agreement, retention of the collateral may be subject to legal proceedings. - -------------------------------------------------------------------------------- ALLOCATION OF INCOME, EXPENSES, GAINS AND LOSSES. Income, expenses (other than those attributable to a specific class), gains and losses are allocated 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. 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 25 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES Continued 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. As of October 31, 2006, the Fund had available for federal income tax purposes an estimated capital loss carryforward of $122,858 expiring by 2014. 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. As of October 31, 2006, it is estimated that the Fund did not utilize any capital loss carryforward to offset realized capital gains. During the period ended April 30, 2006, the Fund did not utilize any capital loss carryforward to offset realized capital gains realized in that fiscal year. - -------------------------------------------------------------------------------- TRUSTEES' COMPENSATION. The Fund has adopted an unfunded retirement plan for the Fund's independent trustees. Benefits are based on years of service and fees paid to each trustee during the years of service. During the six months ended October 31, 2006, the Fund's projected benefit obligations were increased by $7,755, resulting in an accumulated liability of $9,030 as of October 31, 2006. The Board of Trustees has adopted a deferred compensation plan for independent trustees that enables trustees to elect to defer receipt of all or a portion of 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 Plan. - -------------------------------------------------------------------------------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions to shareholders, which are determined in accordance with income tax regulations, are recorded on the ex-dividend date. Income and capital gain distributions, if any, are declared and paid annually. - -------------------------------------------------------------------------------- INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date or upon ex-dividend notification in the case of certain foreign dividends where the ex-dividend date may have passed. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes accretion of discount and amortization of premium, is accrued as earned. 26 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND - -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------------- OTHER. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST The Fund has authorized an unlimited number of $0.001 par value shares of beneficial interest of each class. Transactions in shares of beneficial interest were as follows:
SIX MONTHS ENDED OCTOBER 31, 2006 PERIOD ENDED APRIL 31, 2006 1,2 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------- CLASS A Sold 18,593,699 $ 210,588,608 15,954,779 $ 174,923,126 Dividends and/or distributions reinvested -- -- 59,487 613,903 Redeemed (2,447,257) (27,218,168) (530,333) (5,738,383) ----------------------------------------------------------------------- Net increase 16,146,442 $ 183,370,440 15,483,933 $ 169,798,646 =======================================================================
27 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2. SHARES OF BENEFICIAL INTEREST Continued
SIX MONTHS ENDED OCTOBER 31, 2006 PERIOD ENDED APRIL 31, 2006 1,2 SHARES AMOUNT SHARES AMOUNT - ------------------------------------------------------------------------------------------------------- CLASS B Sold 3,160,688 $ 35,523,492 2,903,240 $ 31,813,205 Dividends and/or distributions reinvested -- -- 10,346 106,666 Redeemed (426,346) (4,744,635) (35,645) (394,746) ----------------------------------------------------------------------- Net increase 2,734,342 $ 30,778,857 2,877,941 $ 31,525,125 ======================================================================= - ------------------------------------------------------------------------------------------------------- CLASS C Sold 8,049,129 $ 90,773,433 7,231,052 $ 79,421,279 Dividends and/or distributions reinvested -- -- 18,954 195,420 Redeemed (623,766) (6,898,593) (65,720) (739,510) ----------------------------------------------------------------------- Net increase 7,425,363 $ 83,874,840 7,184,286 $ 78,877,189 ======================================================================= - ------------------------------------------------------------------------------------------------------- CLASS N Sold 933,649 $ 10,475,760 523,141 $ 5,813,469 Dividends and/or distributions reinvested -- -- 1,258 12,979 Redeemed (108,234) (1,225,349) (16,770) (191,734) ----------------------------------------------------------------------- Net increase 825,415 $ 9,250,411 507,629 $ 5,634,714 ======================================================================= - ------------------------------------------------------------------------------------------------------- CLASS Y Sold 52,262 $ 589,312 119,418 $ 1,313,165 Dividends and/or distributions reinvested -- -- 275 2,842 Redeemed (18,976) (210,514) (1,081) (12,180) ----------------------------------------------------------------------- Net increase 33,286 $ 378,798 118,612 $ 1,303,827 =======================================================================
1. For the period from September 27, 2005 (commencement of operations) to April 30, 2006, for Class A, Class B, Class C, Class N and Class Y shares. 2. The Fund sold 10,000 Class A shares at a value of $100,000 and 100 shares of each Class B, Class C, Class N and Class Y at a value of $1,000, $1,000, $1,000 and $1,000, respectively, to the Manager upon seeding of the Fund on August 25, 2005. - -------------------------------------------------------------------------------- 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the six months ended October 31, 2006, were as follows: PURCHASES SALES - ------------------------------------------------------------------ Investment securities $315,512,357 $1,573,407 - -------------------------------------------------------------------------------- 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. The weighted indirect management fees collected from 28 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND the Underlying Funds, as a percent of average daily net assets of the Fund for the six months ended October 31, 2006 were 0.68%. - -------------------------------------------------------------------------------- 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 October 31, 2006, the Fund paid $348,314 to OFS for services to the Fund. Additionally, Class Y shares are subject to minimum fees of $10,000 per annum 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. - -------------------------------------------------------------------------------- OFFERING AND ORGANIZATIONAL COSTS. The Manager paid all offering and organizational costs associated with the registration and seeding of the Fund. - -------------------------------------------------------------------------------- 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 for Class A shares. It reimburses the Distributor for a portion of its costs incurred for services provided to accounts that hold Class A shares. Reimbursement is made 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 services 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 for Class B, Class C and Class N shares 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 up to 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 determines its uncompensated expenses under the plan at calendar quarter ends. The Distributor's aggregate uncompensated expenses under the plan at September 30, 2006 for Class B, Class C and Class N shares were $1,299,542, $1,437,023 and $118,807, respectively. Fees incurred by the Fund under the plans are detailed in the Statement of Operations. 29 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND NOTES TO FINANCIAL STATEMENTS Unaudited / Continued - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES Continued 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 - ----------------------------------------------------------------------------------------------------------- October 31, 2006 $704,562 $111 $52,764 $31,597 $312
- -------------------------------------------------------------------------------- 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 Combined Total Annual and Underlying Fund Operating Expenses as a percentage of average daily net assets will not exceed the following annual rates: 1.75%, 2.50%, 2.50% and 2.00%, for Class A, Class B, Class C and Class N, respectively. During the six-months ended October 31, 2006, the Manager reimbursed the Fund $103,562, $18,579, $47,956, $3,779 and $559 for the 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. 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. - -------------------------------------------------------------------------------- 5. RECENT ACCOUNTING PRONOUNCEMENTS In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB Interpretation No. 48 ("FIN 48"), ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with FASB Statement No. 109, ACCOUNTING FOR INCOME TAXES. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Fund's tax returns to determine whether it is "more-likely-than-not" that tax positions taken in the Fund's tax return will be ultimately sustained. A tax liability and expense must be recorded in respect of any tax position that, in Management's judgment, will not be fully realized. FIN 48 is effective for fiscal years beginning after December 15, 2006. As of October 31, 2006, the Manager is evaluating the implications of FIN 48. Its impact in the Fund's financial statements has not yet been determined. In September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 157, FAIR VALUE MEASUREMENTS. This standard 30 | OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of October 31, 2006, the Manager does not believe the adoption of SFAS No. 157 will materially impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period. - -------------------------------------------------------------------------------- 6. LITIGATION A consolidated amended complaint was filed as a putative class action against the Manager and the Transfer Agent and other defendants (including 51 of the Oppenheimer funds excluding the Fund) in the U.S. District Court for the Southern District of New York on January 10, 2005 and was amended on March 4, 2005. The complaint alleged, among other things, that the Manager charged excessive fees for distribution and other costs, and that by permitting and/or participating in those actions, the Directors/Trustees and the Officers of the funds breached their fiduciary duties to fund shareholders under the Investment Company Act of 1940 and at common law. The plaintiffs sought unspecified damages, an accounting of all fees paid, and an award of attorneys' fees and litigation expenses. In response to the defendants' motions to dismiss the suit, seven of the eight counts in the complaint, including the claims against certain of the Oppenheimer funds, as nominal defendants, and against certain present and former Directors, Trustees and Officers of the funds, and the Distributor, as defendants, were dismissed with prejudice, by court order dated March 10, 2006, and the remaining count against the Manager and the Transfer Agent was dismissed with prejudice by court order dated April 5, 2006. The plaintiffs filed an appeal of those dismissals on May 11, 2006. The Manager believes that the allegations contained in the complaint are without merit and that there are substantial grounds to sustain the district court's rulings. The Manager also believes that it is premature to render any opinion as to the likelihood of an outcome unfavorable to it, the funds, the Directors/Trustees or the Officers on the appeal of the decisions of the district court, and that no estimate can yet be made with any degree of certainty as to the amount or range of any potential loss. 31 | OPPENHEIMER INTERNATIONAL DIVERSIFIED 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. 32 | OPPENHEIMER INTERNATIONAL DIVERSIFIED 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: o the name, address, and business, educational, and/or other pertinent background of the person being recommended; o a statement concerning whether the person is an "interested person" as defined in the Investment Company Act of 1940; o 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 o 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 October 31, 2006, 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 International Divesified Fund By: /s/ John V. Murphy ____________________________ John V. Murphy Principal Executive Officer Date: December 12, 2006 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: December 12, 2006 By: /s/ Brian W. Wixted ____________________________ Brian W. Wixted Principal Financial Officer Date: December 12, 2006 EX-99.CERT 2 rs195_35961cert302.txt RS195_35961CERT302 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 International Divesified Fund; 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: December 12, 2006 /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 International Divesified Fund; 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: December 12, 2006 /s/ Brian W. Wixted ____________________________ Brian W. Wixted Principal Financial Officer EX-99.906CERT 3 rs195_35961cert906.txt RS195_35961CERT906 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 International Divesified Fund (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 October 31, 2006 (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. ss. 1350 and is not being filed as part of the Form N-CSR filed with the Commission. Principal Executive Officer Principal Financial Officer Oppenheimer International Divesified Oppenheimer International Divesified Fund Fund /s/ John V. Murphy /s/ Brian W. Wixted ____________________________ ____________________________ John V. Murphy Brian W. Wixted Date: December 12, 2006 Date: December 12, 2006 -----END PRIVACY-ENHANCED MESSAGE-----