N-CSR 1 d385717dncsr.htm OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND Oppenheimer International Diversified Fund

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 Diversified Fund

(Exact name of registrant as specified in charter)

6803 South Tucson Way, Centennial, Colorado 80112-3924

(Address of principal executive offices) (Zip code)

Cynthia Lo Bessette

OFI Global Asset Management, Inc.

225 Liberty Street, 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: 4/30/2017


Item 1. Reports to Stockholders.


 

LOGO


Table of Contents

 

Fund Performance Discussion      3  
Top Holdings and Allocations      6  
Fund Expenses      9  
Statement of Investments      11  
Statement of Assets and Liabilities      12  
Statement of Operations      14  
Statements of Changes in Net Assets      16  
Financial Highlights      17  
Notes to Financial Statements      23  
Report of Independent Registered Public Accounting Firm      35  
Federal Income Tax Information      36  
Portfolio Proxy Voting Policies and Guidelines; Updates to Statement of Investments      37  
Trustees and Officers      38  
Privacy Policy Notice      44  

 

 

Class A Shares

AVERAGE ANNUAL TOTAL RETURNS AT 4/30/17

 

     Class A Shares of the Fund    
           Without Sales Charge           With Sales Charge    

    MSCI All Country    

World ex USA Index

1-Year    12.89%   6.39%   12.59%
5-Year    7.84    6.57      5.13  
10-Year    3.50     2.89      1.12  

Performance data quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Fund returns include changes in share price, reinvested distributions, and a 5.75% maximum applicable sales charge except where “without sales charge” is indicated. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. Returns for periods of less than one year are cumulative and not annualized. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.

 

2       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


Fund Performance Discussion1

In a volatile environment for global equity markets, the Fund’s Class A shares (without sales charge) produced a total return of 12.89% during the reporting period. In comparison, the MSCI All Country World ex USA Index produced a return of 12.59% during the same period.

MARKET OVERVIEW

Global equity markets were volatile over the reporting period. 2016 was off to a strong start around commodity price recoveries, but growth concerns continued to weigh on equity markets. In June 2016, global equity markets experienced a short-term sell-off around the United Kingdom’s vote to leave the European Union (commonly known as “Brexit”). A dramatic turn in market sentiment then occurred over the fourth quarter of 2016. The outcome of

 

the presidential election in the U.S., and a reassessment of electoral dynamics elsewhere, generated expectations of higher economic growth and rising interest rates.

Within the equity markets, investors developed an appetite for cyclical industries and, on the thinking that a rising tide raises all boats, for lower quality names as well. In this environment, sectors such as energy, materials and financials performed well.

 

 

 

COMPARISON OF CHANGE IN VALUE OF $10,000 HYPOTHETICAL INVESTMENTS IN:

 

LOGO

1. The Fund is invested in Class I shares of all underlying funds discussed in this Fund Performance Discussion, except for Oppenheimer Master International Value Fund, LLC, which does not offer Class I shares.

 

3       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


The first quarter of 2017 continued the market strength that began post the U.S. election. Within the equity markets, the run-up for energy stalled in the first quarter and miners did not outperform the market by much, which was a big shift from the last three quarters of 2016. Information technology was the strongest performing sector. Energy was the laggard, posting a slight loss, the only sector that did so in the first quarter.

FUND REVIEW

The Fund’s portfolio consisted of five Oppenheimer mutual funds during the reporting period: Oppenheimer International Growth Fund, Oppenheimer Developing Markets Fund, Oppenheimer International Small-Mid Company Fund, Oppenheimer International Equity Fund (named Oppenheimer International Value Fund prior to 12/28/16) and Oppenheimer Master International Value Fund, LLC. All of the underlying funds produced positive absolute results during the reporting period. All of the underlying funds’ Class I shares also outperformed their respective benchmarks, with the exception of Oppenheimer International Growth Fund. This underlying fund produced positive performance, but underperformed its benchmark, the MSCI All Country World ex USA Index, primarily due to stock selection in the consumer discretionary sector and its exposure to the United Kingdom.

The strongest performing holdings for the Fund this reporting period were Oppenheimer Developing Markets Fund and Oppenheimer International Small-Mid Company Fund. Oppenheimer Developing Markets Fund benefited as emerging market equities fared particularly well this reporting period. Although the outcome of the U.S. election resulted in a bit of reversal in emerging market equity performance as investors considered the implications of a range of potential policy changes, they rebounded shortly thereafter. This reflects a market that has moved away from the worst case scenario on the enactment of protectionist policies by the current U.S. administration. For the one-year reporting period, this underlying fund outperformed its benchmark largely due to stock selection in the consumer discretionary sector.

Oppenheimer International Small-Mid Company Fund outperformed its benchmark, the MSCI ACWI ex USA SMID Net Index, in nine out of eleven sectors during the reporting period, led by the strong performance of holdings in the health care and consumer discretionary sectors. An underweight position in the real estate sector also benefited performance.

STRATEGY & OUTLOOK

The Fund is designed to offer investors broad-based exposure to non-U.S. equities with a single portfolio by combining underlying funds that have slightly varied individual mandates. All of the constituent portfolios are actively

 

 

4       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


managed, fundamental, bottom-up, long-term, equity portfolios. We seek to maintain the relative weightings of those funds at fairly constant levels within the overall Fund. Periodically we will rebalance the portfolio due to shifting investment outlooks. Over the first half of the reporting period, the Fund rebalanced the long-term strategic weight of the underlying funds. The new target allocations, as of 10/31/16 are:

 

  Oppenheimer International Growth Fund (25%)

 

  Oppenheimer International Equity Fund + Oppenheimer Master International Value Fund, LLC (25%).

 

  Oppenheimer Developing Markets Fund (25%)

 

  Oppenheimer International Small-Mid Company Fund (25%)

The weightings were adjusted to provide a more balanced exposure to emerging market equities and international small- and mid-cap equities within the portfolio going forward. We believe the new allocation will best serve investors over the long-term.

 

LOGO   

LOGO

 

George R. Evans, CFA

Portfolio Manager

 

 

5       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


Top Holdings and Allocations

 

ASSET CLASS ALLOCATION

 

Oppenheimer International Small-Mid Company Fund, Cl. I      25.4
Oppenheimer International Growth Fund, Cl. I      25.1  
Oppenheimer Developing Markets Fund, Cl. I      24.3  
Oppenheimer Master International Value Fund, LLC      15.3  
Oppenheimer International Equity Fund, Cl. I      9.8  

Portfolio holdings are subject to change. Percentages are as of April 30, 2017, and are based on the total market value of investments.

 

 

6       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


Share Class Performance

AVERAGE ANNUAL TOTAL RETURNS WITHOUT SALES CHARGE AS OF 4/30/17

 

   

Inception

Date

  1-Year       5-Year       10-Year        
Class A (OIDAX)   9/27/05   12.89%   7.84%   3.50%    
Class B (OIDBX)   9/27/05   12.10      6.98      2.97       
Class C (OIDCX)   9/27/05   12.05      7.03      2.73       
Class I (OIDIX)   8/28/12   13.39      9.35*     N/A       
Class R (OIDNX)   9/27/05   12.64      7.54      3.20       
Class Y (OIDYX)   9/27/05   13.16      8.10      3.80       

AVERAGE ANNUAL TOTAL RETURNS WITH SALES CHARGE AS OF 4/30/17

 

   

Inception

Date

  1-Year       5-Year       10-Year        
Class A (OIDAX)   9/27/05   6.39%   6.57%   2.89%    
Class B (OIDBX)   9/27/05   7.10      6.67      2.97       
Class C (OIDCX)   9/27/05   11.05      7.03      2.73       
Class I (OIDIX)   8/28/12   13.39      9.35*     N/A       
Class R (OIDNX)   9/27/05   12.64      7.54      3.20       
Class Y (OIDYX)   9/27/05   13.16      8.10      3.80       

* Shows performance since inception.

The performance data quoted represents past performance, which does not guarantee future results. The investment return and principal value of an investment in the Fund will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Returns do not consider capital gains or income taxes on an individual’s investment. For performance data current to the most recent month-end, visit oppenheimerfunds.com or call 1.800.CALL OPP (225.5677). Fund returns include changes in share price, reinvested distributions, and the applicable sales charge: for Class A shares, the current maximum initial sales charge of 5.75%; for Class B shares, the contingent deferred sales charge of 5% (1-year) and 2% (5-year); and for Class C shares, the contingent deferred sales charge (“CDSC”) of 1% for the 1-year period. Prior to 7/1/14, Class R shares were named Class N shares. There is no sales charge for Class I, Class R and Class Y shares. Because Class B shares convert to Class A shares 72 months after purchase, the since inception return for Class B shares uses Class A performance for the period after conversion. Returns for periods of less than one year are cumulative and not annualized. See Fund prospectuses and summary prospectuses for more information on share classes and sales charges.

The Fund’s performance is compared to the performance of the MSCI All Country World ex USA Index. The MSCI All Country World ex USA Index is designed to measure the equity market performance of developed and emerging markets and excludes the U.S. The Index is unmanaged and cannot be purchased directly by investors. While index comparisons may be useful to provide a benchmark for the Fund’s performance, it must be noted that the Fund’s investments are not limited to the investments comprising the Index. Index performance

 

7       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


includes reinvestment of income, but does not reflect transaction costs, fees, expenses or taxes. Index performance is shown for illustrative purposes only as a benchmark for the Fund’s performance, and does not predict or depict performance of the Fund. The Fund’s performance reflects the effects of the Fund’s business and operating expenses.

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. or its affiliates.

Before investing in any of the Oppenheimer funds, investors should carefully consider a fund’s investment objectives, risks, charges and expenses. Fund prospectuses and summary prospectuses contain this and other information about the funds, and may be obtained by asking your financial advisor, visiting oppenheimerfunds.com, or calling 1.800.CALL OPP (225.5677). Read prospectuses and summary prospectuses carefully before investing.

Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.

 

8       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 and/or contingent deferred sales charges on redemptions; 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 April 30, 2017.

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 6 Months Ended April 30, 2017” 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 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). 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.

 

9       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


Actual   

Beginning

Account

Value

November 1, 2016

  

Ending

Account

Value

April 30, 2017

  

Expenses

Paid During

6 Months Ended

April 30, 2017

Class A    $    1,000.00    $    1,104.40    $        3.08
Class B          1,000.00          1,100.90              7.05
Class C          1,000.00          1,100.40              7.05
Class I          1,000.00          1,106.60              0.89
Class R          1,000.00          1,103.30              4.44
Class Y          1,000.00          1,105.80              1.83

Hypothetical

(5% return before expenses)

                 
Class A          1,000.00          1,021.87              2.96
Class B          1,000.00          1,018.10              6.78
Class C          1,000.00          1,018.10              6.78
Class I          1,000.00          1,023.95              0.85
Class R          1,000.00          1,020.58              4.27
Class Y          1,000.00          1,023.06              1.76

Expenses are equal to the Fund’s annualized expense ratio for that class, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). Those annualized expense ratios, excluding indirect expenses from affiliated funds, based on the 6-month period ended April 30, 2017 are as follows:

 

Class    Expense Ratios  
Class A      0.59
Class B      1.35  
Class C      1.35  
Class I      0.17  
Class R      0.85  
Class Y      0.35  

The expense ratios reflect voluntary and/or contractual waivers and/or reimbursements of expenses by the Fund’s Manager and Transfer Agent. Some of these undertakings may be modified or terminated at any time, as indicated in the Fund’s prospectus. 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.

 

10       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


STATEMENT OF INVESTMENTS April 30, 2017

 

    

Shares

    Value  
Investment Companies—99.9%1    

Foreign Equity Funds—99.9%

   
Oppenheimer Developing Markets Fund, Cl. I     19,424,399     $ 708,990,579  
Oppenheimer International Equity Fund, Cl. I     14,801,041       284,031,971  
Oppenheimer International Growth Fund, Cl. I     18,738,339       731,732,147  
Oppenheimer International Small-Mid Company Fund, Cl. I         17,419,071       738,220,226  

Oppenheimer Master International Value Fund, LLC

    35,101,151       444,824,814  
                 
Total Investments, at Value (Cost $1,993,096,197)     99.9%       2,907,799,737  
Net Other Assets (Liabilities)     0.1       3,665,241  

Net Assets

    100.0%     $   2,911,464,978  
               

Footnotes to Statement of Investments

1. Is or was an affiliate, as defined in the Investment Company Act of 1940, as amended, at or during the reporting period, 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 reporting period in which the issuer was an affiliate are as follows:

 

      Shares
April 29, 2016a
    

Gross

Additions

     Gross
Reductions
    Shares
April 30, 2017
 
Oppenheimer Developing Markets Fund, Cl. I      15,103,945          6,023,651          1,703,197         19,424,399    
Oppenheimer International Equity Fund, Cl. Ib      14,439,776          361,265          —         14,801,041    
Oppenheimer International Growth Fund, Cl. I      21,906,567          1,677,125          4,845,353         18,738,339    
Oppenheimer International Small- Mid Company Fund, Cl. I      15,920,804          2,960,188          1,461,921         17,419,071    
Oppenheimer Master International Value Fund, LLC      47,069,287          4,333,538          16,301,674         35,101,151    
              Value      Income     Realized Gain
(Loss)
 
Oppenheimer Developing Markets Fund, Cl. I       $ 708,990,579      $ 4,360,791     $ (7,636,815)  
Oppenheimer International Equity Fund, Cl. Ib         284,031,971        6,166,795        
Oppenheimer International Growth Fund, Cl. I         731,732,147        9,775,407       22,884,701  
Oppenheimer International Small-Mid Company Fund, Cl. I         738,220,226        3,841,058       2,499,907  
Oppenheimer Master International Value Fund, LLC         444,824,814        11,256,408 c      7,619,136 c 
Total       $     2,907,799,737      $     35,400,459     $       25,366,929  
                            

a. Represents the last business day of the Fund’s reporting period.

b. Prior to December 28, 2016, this fund was named Oppenheimer International Value Fund.

c. Represents the amount allocated to the Fund from Oppenheimer Master International Value Fund, LLC.

See accompanying Notes to Financial Statements.

 

11       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


STATEMENT OF ASSETS AND LIABILITIES April 30, 2017

 

 

 
Assets   
Investments, at value—see accompanying statement of investments—affiliated companies (cost $1,993,096,197)     $ 2,907,799,737     

 

 
Cash      11,105,254     

 

 
Receivables and other assets:   
Shares of beneficial interest sold      5,018,508     
Other      107,960     
  

 

 

 
Total assets      2,924,031,459     

 

 
Liabilities   
Payables and other liabilities:   
Investments purchased      7,830,648     
Shares of beneficial interest redeemed      4,166,493     
Distribution and service plan fees      376,517     
Trustees’ compensation      138,225     
Shareholder communications      13,010     
Other      41,588     
  

 

 

 
Total liabilities      12,566,481     

 

 
Net Assets    $   2,911,464,978     
  

 

 

 

 

 
Composition of Net Assets   
Par value of shares of beneficial interest    $ 185,015     

 

 
Additional paid-in capital      2,437,071,556     

 

 
Accumulated net investment income      573,836     

 

 
Accumulated net realized loss on investments      (441,068,969)    

 

 
Net unrealized appreciation on investments      914,703,540     
  

 

 

 
Net Assets    $ 2,911,464,978     
  

 

 

 

 

12       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

 

 
Net Asset Value Per Share   

 

Class A Shares:

 

  
Net asset value and redemption price per share (based on net assets of $1,302,413,591 and 82,709,046 shares of beneficial interest outstanding)    $ 15.75    

 

Maximum offering price per share (net asset value plus sales charge of 5.75% of offering price)

   $ 16.71    

 

 

Class B Shares:

 

  
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $11,028,951 and 717,220 shares of beneficial interest outstanding)    $ 15.38    

 

 

Class C Shares:

 

  
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $394,496,791 and 25,720,485 shares of beneficial interest outstanding)    $ 15.34    

 

 

Class I Shares:

 

  
Net asset value, redemption price and offering price per share (based on net assets of $197,537,179 and 12,374,525 shares of beneficial interest outstanding)    $ 15.96    

 

 

Class R Shares:

 

  
Net asset value, redemption price (excludes applicable contingent deferred sales charge) and offering price per share (based on net assets of $180,808,381 and 11,622,804 shares of beneficial interest outstanding)    $ 15.56    

 

 

Class Y Shares:

 

  
Net asset value, redemption price and offering price per share (based on net assets of $825,180,085 and 51,870,447 shares of beneficial interest outstanding)    $ 15.91    

See accompanying Notes to Financial Statements.

 

13       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


STATEMENT OF OPERATIONS For the Year Ended April 30, 2017

 

 

 
Allocation of Income and Expenses from Master Fund1   
Net investment income allocated from Oppenheimer Master International Value Fund, LLC:   
Dividends     $ 11,256,408     
Net expenses      (3,836,197)    
  

 

 

 
Net investment income allocated from Oppenheimer Master International Value Fund, LLC      7,420,211     

 

 
Investment Income   
Dividends from affiliated companies      24,144,051     

 

 
Interest      3,280     
  

 

 

 
Total investment income            24,147,331     

 

 
Expenses   
Distribution and service plan fees:   
Class A      3,117,319     
Class B      167,086     
Class C      3,980,169     
Class R      834,657     

 

 
Transfer and shareholder servicing agent fees:   
Class A      2,774,145     
Class B      36,790     
Class C      876,688     
Class I      44,614     
Class R      367,575     
Class Y      1,401,007     

 

 
Shareholder communications:   
Class A      27,601     
Class B      1,097     
Class C      9,395     
Class I      742     
Class R      1,908     
Class Y      8,904     

 

 
Trustees’ compensation      42,727     

 

 
Custodian fees and expenses      30,602     

 

 
Borrowing fees      9,974     

 

 
Other      105,102     
  

 

 

 
Total expenses      13,838,102     
Less waivers and reimbursements of expenses      (124,044)    
  

 

 

 
Net expenses      13,714,058     

 

 

Net Investment Income

     17,853,484     

 

14       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

 

 
Realized and Unrealized Gain   
Net realized gain on investments from affiliated companies    $ 17,747,793     
Increase from payment by affiliate      12,290     

 

 
Net realized gain allocated from Oppenheimer Master International Value Fund, LLC      7,619,136     
  

 

 

 
Net realized gain      25,379,219     

 

 
Net change in unrealized appreciation/depreciation on investments      244,719,080     

 

 
Net change in unrealized appreciation/depreciation allocated from Oppenheimer Master International Value Fund, LLC      40,132,011     
  

 

 

 
Net change in unrealized appreciation/depreciation      284,851,091     

 

 

Net Increase in Net Assets Resulting from Operations

   $     328,083,794     
  

 

 

 

1. The Fund invests in an affiliated mutual fund that expects to be treated as a partnership for tax purposes. See Note 4 of the accompanying Notes.

See accompanying Notes to Financial Statements.

 

15       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


STATEMENTS OF CHANGES IN NET ASSETS

 

     Year Ended
April 30, 2017
     Year Ended
April 29, 20161
 

 

 
Operations      
Net investment income    $ 17,853,484        $ 11,507,243    

 

 
Net realized gain (loss)      25,379,219          (24,334,376)   

 

 
Net change in unrealized appreciation/depreciation      284,851,091          (151,768,502)   
  

 

 

 
Net increase (decrease) in net assets resulting from operations      328,083,794          (164,595,635)   

 

 
Dividends and/or Distributions to Shareholders      
Dividends from net investment income:      
Class A      (4,891,333)         (13,052,928)   
Class B      —          —    
Class C      —          (835,683)   
Class I      (1,227,382)         (1,564,520)   
Class R      (298,405)         (1,071,703)   
Class Y      (4,496,213)         (6,129,430)   
  

 

 

 
    

 

(10,913,333) 

 

 

 

    

 

(22,654,264) 

 

 

 

 

 
Beneficial Interest Transactions      
Net increase (decrease) in net assets resulting from beneficial interest transactions:      
Class A      (187,510,113)         (83,793,909)   
Class B      (14,029,412)         (15,509,063)   
Class C      (78,327,342)         (38,445,436)   
Class I      52,113,345          39,701,230    
Class R      (5,238,797)         2,188,806    
Class Y      198,805,511          39,109,600    
  

 

 

 
     (34,186,808)         (56,748,772)   

 

 
Net Assets      
Total increase (decrease)      282,983,653          (243,998,671)   

 

 
Beginning of period      2,628,481,325          2,872,479,996    
  

 

 

 
End of period (including accumulated net investment income (loss) of $573,836 and $(6,356,362), respectively)    $   2,911,464,978        $   2,628,481,325    
  

 

 

 

1. Represents the last business day of the Fund’s reporting period.

See accompanying Notes to Financial Statements.

 

16       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


FINANCIAL HIGHLIGHTS

 

Class A   

Year Ended
April 30,

2017

  

Year Ended
April 29,

20161

  

Year Ended
April 30,

2015

  

Year Ended
April 30,

2014

  

Year Ended
April 30,

2013

 

Per Share Operating Data               
Net asset value, beginning of period    $14.01    $14.96    $14.73    $13.11    $11.30

 

Income (loss) from investment operations:               
Net investment income2    0.10    0.07    0.10    0.09    0.12
Net realized and unrealized gain (loss)    1.70    (0.89)    0.22    1.65    1.90
  

 

Total from investment operations    1.80    (0.82)    0.32    1.74    2.02

 

Dividends and/or distributions to shareholders:               
Dividends from net investment income    (0.06)    (0.13)    (0.09)    (0.12)    (0.21)
  

 

Net asset value, end of period    $15.75    $14.01    $14.96    $14.73    $13.11
  

 

  

 

 

Total Return, at Net Asset Value3    12.89%    (5.45)%    2.21%    13.23%    18.06%

 

Ratios/Supplemental Data               
Net assets, end of period (in thousands)        $1,302,414            $1,343,636            $1,527,713            $1,677,504            $1,344,557    

 

Average net assets (in thousands)    $1,259,992    $1,398,744    $1,581,956    $1,511,242    $1,163,778

 

Ratios to average net assets:4,5               
Net investment income    0.72%    0.52%    0.70%    0.66%    1.05%
Expenses excluding specific expenses listed below    0.62%    0.65%    0.65%    0.68%    0.68%
Interest and fees from borrowings    0.00%6    0.00%6    0.00%    0.00%    0.00%
  

 

Total expenses7    0.62%    0.65%    0.65%    0.68%    0.68%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses    0.62%8    0.65%    0.65%    0.68%8    0.67%

 

Portfolio turnover rate    16%    3%    7%    18%    9%

1. Represents the last business day of the Fund’s reporting period.

2. Per share amounts calculated based on the average shares outstanding during the period.

3. Assumes an initial 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. Includes the Fund’s share of the allocated expenses and/or net investment income from Oppenheimer Master International Value Fund, LLC.

6. Less than 0.005%.

7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:

 

 

Year Ended April 30, 2017      1.32                                                                                                                     
Year Ended April 29, 2016      1.26  
Year Ended April 30, 2015      1.26  
Year Ended April 30, 2014      1.31  
Year Ended April 30, 2013      1.40  

8. Waiver was less than 0.005%.

See accompanying Notes to Financial Statements.

 

17       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


FINANCIAL HIGHLIGHTS Continued

 

Class B   

Year Ended
April 30,

2017

  

Year Ended
April 29,

20161

  

Year Ended
April 30,

2015

  

Year Ended
April 30,

2014

  

Year Ended
April 30,

2013

 

Per Share Operating Data               
Net asset value, beginning of period    $13.72    $14.63    $14.42    $12.85    $11.06

 

Income (loss) from investment operations:               
Net investment income (loss)2    (0.02)    (0.04)    (0.01)    (0.04)    0.02
Net realized and unrealized gain (loss)    1.68    (0.87)    0.22    1.61    1.86
  

 

Total from investment operations    1.66    (0.91)    0.21    1.57    1.88

 

Dividends and/or distributions to shareholders:               
Dividends from net investment income    0.00    0.00    0.00    0.00    (0.09)

 

Net asset value, end of period    $15.38    $13.72    $14.63    $14.42    $12.85
  

 

  

 

 

Total Return, at Net Asset Value3    12.10%    (6.22)%    1.46%    12.22%    17.07%

 

Ratios/Supplemental Data               
Net assets, end of period (in thousands)        $11,029            $23,560            $41,707            $63,052            $82,632    

 

Average net assets (in thousands)    $16,663    $31,464    $50,076    $72,836    $88,638

 

Ratios to average net assets:4,5               
Net investment income (loss)    (0.11)%    (0.29)%    (0.05)%    (0.22)%    0.15%
Expenses excluding specific expenses listed below    1.38%    1.40%    1.40%    1.54%    1.69%
Interest and fees from borrowings    0.00%6    0.00%6    0.00%    0.00%    0.00%
  

 

Total expenses7    1.38%    1.40%    1.40%    1.54%    1.69%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses    1.38%8    1.40%    1.40%    1.52%    1.57%

 

Portfolio turnover rate    16%    3%    7%    18%    9%

1. Represents the last business day of the Fund’s reporting period.

2. Per share amounts calculated based on the average shares outstanding during the period.

3. Assumes an initial 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. Includes the Fund’s share of the allocated expenses and/or net investment income from Oppenheimer Master International Value Fund, LLC.

6. Less than 0.005%.

7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:

 

 

Year Ended April 30, 2017      2.08                                                                                                                     
Year Ended April 29, 2016      2.01  
Year Ended April 30, 2015      2.01  
Year Ended April 30, 2014      2.17  
Year Ended April 30, 2013      2.41  

8. Waiver was less than 0.005%.

See accompanying Notes to Financial Statements.

 

18       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

Class C   

Year Ended
April 30,

2017

  

Year Ended
April 29,

20161

  

Year Ended
April 30,

2015

  

Year Ended
April 30,

2014

  

Year Ended
April 30,

2013

 

Per Share Operating Data               
Net asset value, beginning of period    $13.69    $14.62    $14.41    $12.85    $11.08

 

Income (loss) from investment operations:               
Net investment income (loss)2    (0.01)    (0.03)    (0.00)3    (0.02)    0.04
Net realized and unrealized gain (loss)    1.66    (0.87)    0.21    1.61    1.86
  

 

Total from investment operations    1.65    (0.90)    0.21    1.59    1.90

 

Dividends and/or distributions to shareholders:               
Dividends from net investment income    0.00    (0.03)    0.00    (0.03)    (0.13)

 

Net asset value, end of period    $15.34    $13.69    $14.62    $14.41    $12.85
  

 

  

 

 

Total Return, at Net Asset Value4    12.05%    (6.19)%    1.46%    12.35%    17.20%

 

Ratios/Supplemental Data               
Net assets, end of period (in thousands)        $394,497            $428,917            $500,310            $516,602            $409,450    

 

Average net assets (in thousands)    $398,087    $454,130    $501,925    $462,164    $362,107

 

Ratios to average net assets:5,6               
Net investment income (loss)    (0.04)%    (0.24)%    (0.02)%    (0.09)%    0.31%
Expenses excluding specific expenses listed below    1.37%    1.40%    1.40%    1.42%    1.43%
Interest and fees from borrowings    0.00%7    0.00%7    0.00%    0.00%    0.00%
  

 

Total expenses8    1.37%    1.40%    1.40%    1.42%    1.43%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses    1.37%9    1.40%    1.40%    1.42%9    1.42%

 

Portfolio turnover rate    16%    3%    7%    18%    9%

1. Represents the last business day of the Fund’s reporting period.

2. Per share amounts calculated based on the average shares outstanding during the period.

3. Less than $0.005.

4. Assumes an initial 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. Includes the Fund’s share of the allocated expenses and/or net investment income from Oppenheimer Master International Value Fund, LLC.

7. Less than 0.005%.

8. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:

 

Year Ended April 30, 2017      2.07                                                                                                                     
Year Ended April 29, 2016      2.01  
Year Ended April 30, 2015      2.01  
Year Ended April 30, 2014      2.05  
Year Ended April 30, 2013      2.15  

9. Waiver was less than 0.005%.

See accompanying Notes to Financial Statements.

 

19       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


FINANCIAL HIGHLIGHTS Continued

 

Class I   

Year Ended
April 30,

2017

  

Year Ended
April 29,

20161

  

Year Ended
April 30,

2015

  

Year Ended
April 30,

2014

  

Period

Ended
April 30,

20132

 

Per Share Operating Data               
Net asset value, beginning of period    $14.20    $15.17    $14.94    $13.24    $11.25

 

Income (loss) from investment operations:               
Net investment income3    0.17    0.14    0.17    0.14    0.05
Net realized and unrealized gain (loss)    1.71    (0.91)    0.22    1.74    2.21
  

 

Total from investment operations    1.88    (0.77)    0.39    1.88    2.26

 

Dividends and/or distributions to shareholders:               
Dividends from net investment income    (0.12)    (0.20)    (0.16)    (0.18)    (0.27)

 

Net asset value, end of period    $15.96    $14.20    $15.17    $14.94    $13.24
  

 

  

 

 

Total Return, at Net Asset Value4    13.39%    (5.07)%    2.68%    14.17%    20.33%

 

Ratios/Supplemental Data               
Net assets, end of period (in thousands)        $197,537            $124,159            $90,659            $77,012            $10,196    

 

Average net assets (in thousands)    $148,912    $105,658    $82,045    $43,239    $4,967

 

Ratios to average net assets:5,6               
Net investment income    1.15%    0.99%    1.16%    1.03%    0.59%
Expenses excluding specific expenses listed below    0.18%    0.21%    0.21%    0.21%    0.27%
Interest and fees from borrowings    0.00%7    0.00%7    0.00%    0.00%    0.00%
  

 

Total expenses8    0.18%    0.21%    0.21%    0.21%    0.27%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses    0.18%9    0.21%    0.21%    0.21%9    0.26%

 

Portfolio turnover rate    16%    3%    7%    18%    9%

1. Represents the last business day of the Fund’s reporting period.

2. For the period from August 28, 2012 (inception of offering) to April 30, 2013.

3. Per share amounts calculated based on the average shares outstanding during the period.

4. Assumes an initial 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. Includes the Fund’s share of the allocated expenses and/or net investment income from Oppenheimer Master International Value Fund, LLC.

7. Less than 0.005%.

8. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:

 

Year Ended April 30, 2017      0.88                                                                                                                     
Year Ended April 29, 2016      0.82  
Year Ended April 30, 2015      0.82  
Year Ended April 30, 2014      0.84  
Period Ended April 30, 2013      0.99  

9. Waiver was less than 0.005%.

See accompanying Notes to Financial Statements.

 

20       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

Class R   

Year Ended
April 30,

2017

  

Year Ended
April 29,

20161

  

Year Ended
April 30,

2015

  

Year Ended
April 30,

2014

  

Year Ended
April 30,

2013

 

Per Share Operating Data               
Net asset value, beginning of period    $13.84    $14.78    $14.56    $12.97    $11.19

 

Income (loss) from investment operations:               
Net investment income2    0.07    0.04    0.07    0.05    0.09
Net realized and unrealized gain (loss)    1.68    (0.89)    0.21    1.62    1.87
  

 

Total from investment operations    1.75    (0.85)    0.28    1.67    1.96

 

Dividends and/or distributions to shareholders:               
Dividends from net investment income    (0.03)    (0.09)    (0.06)    (0.08)    (0.18)

 

Net asset value, end of period    $15.56    $13.84    $14.78    $14.56    $12.97
  

 

  

 

 

Total Return, at Net Asset Value3    12.64%    (5.73)%    1.96%    12.90%    17.64%

 

Ratios/Supplemental Data               
Net assets, end of period (in thousands)        $180,808            $165,915            $175,025            $206,864            $140,798    

 

Average net assets (in thousands)    $167,052    $162,876    $201,690    $166,750    $119,129

 

Ratios to average net assets:4,5               
Net investment income    0.47%    0.26%    0.49%    0.38%    0.76%
Expenses excluding specific expenses listed below    0.87%    0.90%    0.90%    0.94%    1.01%
Interest and fees from borrowings    0.00%6    0.00%6    0.00%    0.00%    0.00%
  

 

Total expenses7    0.87%    0.90%    0.90%    0.94%    1.01%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses    0.87%8    0.90%    0.90%    0.94%8    1.00%

 

Portfolio turnover rate    16%    3%    7%    18%    9%

1. Represents the last business day of the Fund’s reporting period.

2. Per share amounts calculated based on the average shares outstanding during the period.

3. Assumes an initial 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. Includes the Fund’s share of the allocated expenses and/or net investment income from Oppenheimer Master International Value Fund, LLC.

6. Less than 0.005%.

7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:

 

Year Ended April 30, 2017      1.57                                                                                                                     
Year Ended April 29, 2016      1.51  
Year Ended April 30, 2015      1.51  
Year Ended April 30, 2014      1.57  
Year Ended April 30, 2013      1.73  

8. Waiver was less than 0.005%.

See accompanying Notes to Financial Statements.

 

21       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


FINANCIAL HIGHLIGHTS Continued

 

Class Y   

Year Ended
April 30,

2017

  

Year Ended
April 29,

20161

  

Year Ended
April 30,

2015

  

Year Ended
April 30,

2014

  

Year Ended
April 30,

2013

 

Per Share Operating Data               
Net asset value, beginning of period    $14.16    $15.13    $14.89    $13.25    $11.42

 

Income (loss) from investment operations:               
Net investment income2    0.15    0.11    0.15    0.13    0.16
Net realized and unrealized gain (loss)    1.70    (0.91)    0.22    1.66    1.91
  

 

Total from investment operations    1.85    (0.80)    0.37    1.79    2.07

 

Dividends and/or distributions to shareholders:               
Dividends from net investment income    (0.10)    (0.17)    (0.13)    (0.15)    (0.24)

 

Net asset value, end of period    $15.91    $14.16    $15.13    $14.89    $13.25
  

 

  

 

 

Total Return, at Net Asset Value3    13.16%    (5.27)%    2.56%    13.50%    18.31%

 

Ratios/Supplemental Data               
Net assets, end of period (in thousands)        $825,180            $542,294            $537,066            $474,620            $308,400    

 

Average net assets (in thousands)    $637,414    $513,532    $520,362    $385,307    $246,307

 

Ratios to average net assets:4,5               
Net investment income    1.00%    0.77%    1.00%    0.95%    1.36%
Expenses excluding specific expenses listed below    0.37%    0.40%    0.40%    0.42%    0.44%
Interest and fees from borrowings    0.00%6    0.00%6    0.00%    0.00%    0.00%
  

 

Total expenses7    0.37%    0.40%    0.40%    0.42%    0.44%
Expenses after payments, waivers and/or reimbursements and reduction to custodian expenses    0.37%8    0.40%    0.40%    0.42%8    0.43%

 

Portfolio turnover rate    16%    3%    7%    18%    9%

1. Represents the last business day of the Fund’s reporting period.

2. Per share amounts calculated based on the average shares outstanding during the period.

3. Assumes an initial 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. Includes the Fund’s share of the allocated expenses and/or net investment income from Oppenheimer Master International Value Fund, LLC.

6. Less than 0.005%.

7. Total expenses including indirect expenses from affiliated fund fees and expenses were as follows:

 

Year Ended April 30, 2017      1.07                                                                                                                     
Year Ended April 29, 2016      1.01  
Year Ended April 30, 2015      1.01  
Year Ended April 30, 2014      1.05  
Year Ended April 30, 2013      1.16  

8. Waiver was less than 0.005%.

See accompanying Notes to Financial Statements.

 

22       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


NOTES TO FINANCIAL STATEMENTS April 30, 2017

 

 

 

 

1. Organization

Oppenheimer International Diversified Fund (the “Fund”) is registered under the Investment Company Act of 1940 (“1940 Act”), as amended, as a diversified open-end management investment company. The Fund’s investment objective is to seek capital appreciation. The Fund’s investment adviser is OFI Global Asset Management, Inc. (“OFI Global” or the “Manager”), a wholly-owned subsidiary of OppenheimerFunds, Inc. (“OFI” or the “Sub-Adviser”). The Manager has entered into a sub-advisory agreement with OFI.

The Fund offers Class A, Class C, Class I, Class R and Class Y shares, and previously offered Class B shares for new purchase through June 29, 2012. Subsequent to that date, no new purchases of Class B shares are permitted, however reinvestment of dividend and/or capital gain distributions and exchanges of Class B shares into and from other Oppenheimer funds are allowed. As of July 1, 2014, Class N shares were renamed Class R shares. Class N shares subject to a contingent deferred sales charge (“CDSC”) on July 1, 2014, continue to be subject to a CDSC after the shares were renamed. Purchases of Class R shares occurring on or after July 1, 2014, are not subject to a CDSC upon redemption. Class A shares are sold at their offering price, which is normally net asset value plus a front-end sales charge. Class C and Class R shares are sold, and Class B shares were sold, without a front-end sales charge but may be subject to a CDSC. Class R shares are sold only through retirement plans. Retirement plans that offer Class R shares may impose charges on those accounts. Class I and Class Y shares are sold to certain institutional investors or intermediaries without either a front-end sales charge or a CDSC, however, the intermediaries may impose charges on their accountholders who beneficially own Class I and Class Y shares. 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 R shares have separate distribution and/or service plans under which they pay fees. Class I and Class Y shares do not pay such fees. 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 followed in the Fund’s preparation of financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”).

 

 

2. Significant Accounting Policies

Security Valuation. All investments in securities are recorded at their estimated fair value, as described in Note 3.

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.

 

23       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


NOTES TO FINANCIAL STATEMENTS Continued

 

 

 

2. Significant Accounting Policies (Continued)

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. GAAP, 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 distributions received from the Underlying Funds are recorded on the ex-dividend date. Upon receipt of notification from an Underlying Fund, and subsequent to the ex-dividend date, some of the dividend income originally recorded by the Fund may be reclassified as a tax return of capital by reducing the cost basis of the Underlying Fund and/or increasing the realized gain on sales of investments in the Underlying 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 overdraft at a rate equal to the Prime Rate plus 0.35%. 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.

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 remains open for the three preceding fiscal reporting period ends. The Fund has analyzed its tax positions for the fiscal year ended April 30, 2017, including open tax years, and does not believe there are any uncertain tax positions requiring recognition in the Fund’s financial statements.

The tax components of capital shown in the following table represent distribution requirements the Fund must satisfy under the income tax regulations, losses the Fund may be

 

24       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

 

 

2. Significant Accounting Policies (Continued)

able to offset against income and gains realized in future years and unrealized appreciation or depreciation of securities and other investments for federal income tax purposes.

 

Undistributed

Net Investment

Income

   Undistributed
Long-Term
Gain
     Accumulated
Loss
Carryforward1,2,3,4
     Net Unrealized
Appreciation
Based on cost of
Securities and
Other Investments
for Federal Income
Tax Purposes
 

 

 
$18,643,434      $—        $328,605,136        $784,305,374  

1. At period end, the Fund had $328,605,136 of net capital loss carryforward available to offset future realized capital gains, if any, and thereby reduce future taxable gain distributions. Details of the capital loss carryforwards are included in the table below. Capital loss carryovers with no expiration, if any, must be utilized prior to those with expiration dates.

 

Expiring       

 

 
2018    $ 315,770,085  
No expiration      12,835,051  
  

 

 

 
Total    $             328,605,136  
  

 

 

 

2. During the reporting period, the Fund utilized $27,804,888 of capital loss carryforward to offset capital gains realized in that fiscal year.

3. During the previous reporting period, the Fund did not utilize any capital loss carryforward.

4. During the reporting period, $79,922,292 of unused capital loss carryforward expired.

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 are determined in accordance with federal income tax requirements, which may differ from the character of net investment income or net realized gains presented in those financial statements in accordance with U.S. GAAP. 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.

Accordingly, the following amounts have been reclassified for the reporting period. Net assets of the Fund were unaffected by the reclassifications.

 

Reduction

to Paid-in Capital

   Reduction
to Accumulated
Net Investment
Income
     Reduction
to Accumulated Net
Realized Loss on
Investments
 

 

 
$79,923,837      $9,953        $79,933,790  

The tax character of distributions paid during the reporting periods:

 

25       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


NOTES TO FINANCIAL STATEMENTS Continued

 

 

 

2. Significant Accounting Policies (Continued)

 

     Year Ended
April 30, 2017
     Year Ended
April 30, 2016
 

 

 
Distributions paid from:      
Ordinary income    $             10,913,333      $             22,654,264  

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 at period end 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     $  2,123,494,363    
  

 

 

 
Gross unrealized appreciation     $ 784,305,374    
Gross unrealized depreciation      —    
  

 

 

 
Net unrealized appreciation     $ 784,305,374    
  

 

 

 

Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP 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.

Recent Accounting Pronouncement. In October 2016, the Securities and Exchange Commission (“SEC”) adopted amendments to rules under the Investment Company Act of 1940 (“final rules”) intended to modernize the reporting and disclosure of information by registered investment companies. The final rules amend Regulation S-X and require funds to provide standardized, enhanced derivative disclosure in fund financial statements in a format designed for individual investors. The amendments to Regulation S-X also update the disclosures for other investments and investments in, and advances to affiliates and amend the rules regarding the general form and content of fund financial statements. The compliance date for the amendments to Regulation S-X is August 1, 2017. OFI Global is currently evaluating the amendments and their impact, if any, on the Fund’s financial statements.

 

 

3. Securities Valuation

The Fund calculates the net asset value of its shares based upon the net asset value of the applicable investment companies. For each investment company, the net asset value per share for a class of shares is determined as of 4:00 P.M. eastern time, on each day the New York Stock Exchange (the “Exchange”) is open for trading, except in the case of a scheduled early closing of the Exchange, in which case the Fund will calculate net asset value of the shares as of the scheduled early closing time of the Exchange. This is calculated by dividing the value of the investment company’s net assets attributable to that class by the number of outstanding shares of that class on that day.

 

26       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

 

 

3. Securities Valuation (Continued)

The Fund’s Board has adopted procedures for the valuation of the Fund’s securities and has delegated the day-to-day responsibility for valuation determinations under those procedures to the Manager. The Manager has established a Valuation Committee which is responsible for determining a fair valuation for any security for which market quotations are not readily available. The Valuation Committee’s fair valuation determinations are subject to review, approval and ratification by the Fund’s Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined.

Valuations Methods and Inputs

To determine their net asset values, the Underlying Funds’ assets are valued primarily on the basis of current market quotations as generally supplied by third party portfolio pricing services or by dealers. Such market quotations are typically based on unadjusted quoted prices in active markets for identical securities or other observable market inputs.

If a market value or price cannot be determined for a security using the methodologies described above, or if, in the “good faith” opinion of the Manager, the market value or price obtained does not constitute a “readily available market quotation,” or a significant event has occurred that would materially affect the value of the security, the security is fair valued either (i) by a standardized fair valuation methodology applicable to the security type or the significant event as previously approved by the Valuation Committee and the Fund’s Board or (ii) as determined in good faith by the Manager’s Valuation Committee. The Valuation Committee considers all relevant facts that are reasonably available, through either public information or information available to the Manager, when determining the fair value of a security. Fair value determinations by the Manager are subject to review, approval and ratification by the Fund’s Board at its next regularly scheduled meeting covering the calendar quarter in which the fair valuation was determined. The methodologies used for valuing securities are not necessarily an indication of the risks associated with investing in those Underlying Funds.

To assess the continuing appropriateness of security valuations, the Manager, or its third party service provider who is subject to oversight by the Manager, regularly compares prior day prices, prices on comparable securities, and sale prices to the current day prices and challenges those prices exceeding certain tolerance levels with the third party pricing service or broker source. For those securities valued by fair valuations, whether through a standardized fair valuation methodology or a fair valuation determination, the Valuation Committee reviews and affirms the reasonableness of the valuations based on such methodologies and fair valuation determinations on a regular basis after considering all relevant information that is reasonably available.

Classifications

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. Various data inputs may be 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

 

27       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


NOTES TO FINANCIAL STATEMENTS Continued

 

 

 

3. Securities Valuation (Continued)

accounting standards:

1) Level 1-unadjusted quoted prices in active markets for identical assets or liabilities (including securities actively traded on a securities exchange)

2) Level 2-inputs other than unadjusted quoted prices that are observable for the asset or liability (such as unadjusted quoted prices for similar assets and market corroborated inputs such as interest rates, prepayment speeds, credit risks, etc.)

3) Level 3-significant unobservable inputs (including the Manager’s own judgments about assumptions that market participants would use in pricing the asset or liability).

The inputs used for valuing securities are not necessarily an indication of the risks associated with investing in those securities.

The Fund classifies each of its investments in investment companies which are publicly offered as Level 1. Investment companies that are not publicly offered, if any, are measured using net asset value and are classified as Level 2 in the fair value hierarchy.

The table below categorizes amounts that are included in the Fund’s Statement of Assets and Liabilities at period end based on valuation input level:

 

    

Level 1—

Unadjusted

Quoted Prices

    

Level 2—

Other Significant

Observable Inputs

    

Level 3—

Significant

  Unobservable

Inputs

     Value    

 

 

Assets Table

           

Investments, at Value:

           

Investment Companies

   $ 2,462,974,923      $ 444,824,814      $      $ 2,907,799,737  
  

 

 

 

Total Assets

   $     2,462,974,923      $     444,824,814      $      $     2,907,799,737  
  

 

 

 

Forward currency exchange contracts and futures contracts, if any, are reported at their unrealized appreciation/depreciation at measurement date, which represents the change in the contract’s value from trade date. All additional assets and liabilities included in the above table are reported at their market value at measurement date.

 

 

4. Investments and Risks

Risks of Investing in the Underlying Funds. The Fund invests in other mutual funds advised by the Manager. The Underlying Funds are registered open-end management investment companies under the 1940 Act, as amended. The Manager is the investment adviser of, and the Sub-Adviser provides investment and related advisory services to, the Underlying Funds. The Fund’s Investments in Underlying Funds are included in the Statement of Investments. Shares of Underlying Funds are valued at their net asset value per share. As a shareholder, the Fund is subject to its proportional share of the Underlying Funds’ expenses, including their management fee.

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.

 

28       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

 

 

4. Investments and Risks (Continued)

Significant Holdings. At period end, the Fund’s investment in Oppenheimer International Growth Fund and Oppenheimer International Small-Mid Company Fund, accounted for 25.1% and 25.4% of the Fund’s net assets, respectively. Additional information on Oppenheimer International Growth Fund and Oppenheimer International Small-Mid Company Fund, including the audited financials, can be found on the SEC website.

Investment in Oppenheimer Master Fund. The Fund is permitted to invest in entities sponsored and/or advised by the Manager or an affiliate. Certain of these entities in which the Fund invests are mutual funds registered under the 1940 Act, as amended, that expect to be treated as partnerships for tax purposes, specifically Oppenheimer Master International Value Fund, LLC (the “Master Fund”). The Master Fund 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 Master Fund than in another, the Fund will have greater exposure to the risks of that Master Fund.

The investment objective of the Master Fund is to seek capital appreciation. The Fund’s investment in the Master Fund is included in the Statement of Investments. The Fund recognizes income and gain (loss) on its investment in the Master Fund according to its allocated pro-rata share, based on its relative proportion of total outstanding Master Fund shares held, of the total net income earned and the net gain (loss) realized on investments sold by the Master Fund. As a shareholder, the Fund is subject to its proportional share of the Master Fund’s expenses, including its management fee. The Fund owns 99.99% of the Master Fund at period end.

 

 

5. Market Risk Factors

The Fund’s investments in securities and/or financial derivatives may expose the Fund to various market risk factors:

Commodity Risk. Commodity risk relates to the change in value of commodities or commodity indexes as they relate to increases or decreases in the commodities market. Commodities are physical assets that have tangible properties. Examples of these types of assets are crude oil, heating oil, metals, livestock, and agricultural products.

Credit Risk. Credit risk relates to the ability of the issuer of debt to meet interest and principal payments, or both, as they come due. In general, lower-grade, higher-yield debt securities are subject to credit risk to a greater extent than lower-yield, higher-quality securities.

Equity Risk. Equity risk relates to the change in value of equity securities as they relate to increases or decreases in the general market.

Foreign Exchange Rate Risk. Foreign exchange rate risk relates to the change in the U.S. dollar value of a security held that is denominated in a foreign currency. The U.S. dollar value of a foreign currency denominated security will decrease as the dollar appreciates against the currency, while the U.S. dollar value will increase as the dollar depreciates against the currency.

 

29       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


NOTES TO FINANCIAL STATEMENTS Continued

 

 

 

5. Market Risk Factors (Continued)

Interest Rate Risk. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.

Volatility Risk. Volatility risk refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.

 

 

6. 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:

 

     Year Ended April 30, 2017     Year Ended April 29, 20161     
     Shares     Amount     Shares     Amount     

 

 

Class A

        

Sold

     14,575,418     $ 209,599,175       15,657,053     $ 220,961,054     

Dividends and/or distributions reinvested

     327,686       4,505,686       864,663       11,932,359     

Redeemed

                 (28,124,657         (401,614,974                 (22,688,248         (316,687,322)    
  

 

 

 
Net decrease      (13,221,553   $ (187,510,113     (6,166,532   $ (83,793,909)    
  

 

 

 

 

 

Class B

        

Sold

     22,335     $ 313,692       64,961     $ 911,001     

Dividends and/or distributions reinvested

                       —     

Redeemed

     (1,021,747     (14,343,104     (1,198,375     (16,420,064)    
  

 

 

 
Net decrease      (999,412   $ (14,029,412     (1,133,414   $ (15,509,063)    
  

 

 

 

 

 

Class C

        

Sold

     2,735,746     $ 38,359,117       4,034,511     $ 55,791,859     

Dividends and/or distributions reinvested

                 56,297       761,691     

Redeemed

     (8,348,231     (116,686,459     (6,973,404     (94,998,986)    
  

 

 

 
Net decrease      (5,612,485   $ (78,327,342     (2,882,596   $ (38,445,436)    
  

 

 

 

 

 

Class I

        

Sold

     7,057,762     $ 102,619,613       4,277,924     $ 61,186,135     

Dividends and/or distributions reinvested

     88,131       1,226,785       111,899       1,564,344     

Redeemed

     (3,513,105     (51,733,053     (1,622,429     (23,049,249)    
  

 

 

 
Net increase      3,632,788     $ 52,113,345       2,767,394     $ 39,701,230     
  

 

 

 

 

30       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

 

 

6. Shares of Beneficial Interest (Continued)

 

     Year Ended April 30, 2017     Year Ended April 29, 20161  
     Shares     Amount     Shares     Amount  

 

 

Class R

        

Sold

     3,333,713     $ 47,257,238       3,637,577     $ 50,440,243     

Dividends and/or distributions reinvested

     19,480       264,932       72,290       986,761     

Redeemed

                 (3,717,939         (52,760,967                 (3,562,649         (49,238,198)    
  

 

 

 
Net increase (decrease)      (364,746   $ (5,238,797     147,218     $ 2,188,806     
  

 

 

 

 

 

Class Y

        

Sold

     27,521,445     $ 400,341,587       12,802,683     $ 181,005,980     

Dividends and/or distributions reinvested

     296,315       4,112,847       404,351       5,636,652     

Redeemed

     (14,252,266     (205,648,923     (10,409,113     (147,533,032)    
  

 

 

 
Net increase      13,565,494     $ 198,805,511       2,797,921     $ 39,109,600     
  

 

 

 

1. Represents the last business day of the Fund’s reporting period.

 

 

7. Purchases and Sales of Securities

The aggregate cost of purchases and proceeds from sales of securities, other than short-term obligations, for the reporting period were as follows:

 

     Purchases      Sales  

 

 

Investment securities

   $ 434,387,798                          $ 469,845,022  

 

 

8. 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 the Fund’s investments in the Underlying Funds. The weighted indirect management fees collected from the Fund’s investment in the Underlying Funds, as a percent of average daily net assets of the Fund for the reporting period was 0.65%. This amount is gross of any waivers or reimbursements of management fees implemented at the Underlying Fund level. Under the sub-advisory agreement, the Manager pays the Sub-Adviser a percentage of the indirect management fees (after all applicable waivers) from the Fund’s investments in the Underlying Funds.

Sub-Adviser Fees. The Manager has retained the Sub-Adviser to provide the day-to-day portfolio management of the Fund. Under the Sub-Advisory Agreement, the Manager pays the Sub-Adviser an annual fee in monthly installments, equal to a percentage of the indirect investment management fee collected by the Manager, which shall be calculated after any investment management fee waivers. The fee paid to the Sub-Adviser is paid by the Manager, not by the Fund.

Transfer Agent Fees. OFI Global (the “Transfer Agent”) serves as the transfer and shareholder servicing agent for the Fund. The Fund pays the Transfer Agent a fee based on

 

31       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


NOTES TO FINANCIAL STATEMENTS Continued

 

 

 

8. Fees and Other Transactions with Affiliates (Continued)

annual net assets. Fees incurred and average net assets for each class with respect to these services are detailed in the Statement of Operations and Financial Highlights, respectively.

Sub-Transfer Agent Fees. The Transfer Agent has retained Shareholder Services, Inc., a wholly-owned subsidiary of OFI (the “Sub-Transfer Agent”), to provide the day-to-day transfer agent and shareholder servicing of the Fund. Under the Sub-Transfer Agency Agreement, the Transfer Agent pays the Sub-Transfer Agent an annual fee in monthly installments, equal to a percentage of the transfer agent fee collected by the Transfer Agent from the Fund, which shall be calculated after any applicable fee waivers. The fee paid to the Sub-Transfer Agent is paid by the Transfer Agent, not by the Fund.

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 reporting period, the Fund’s projected benefit obligations, payments to retired Trustees and accumulated liability were as follows:

 

Projected Benefit Obligations Increased

   $  

Payments Made to Retired Trustees

     5,851  

Accumulated Liability as of April 30, 2017

                         42,287  

The Fund’s Board of Trustees (“Board”) 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 with the compensation deferral plan.

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 pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund

 

32       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

 

 

8. Fees and Other Transactions with Affiliates (Continued)

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 daily 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 R Shares. The Fund has adopted Distribution and Service Plans (the “Plans”) for Class B, Class C and Class R shares pursuant to Rule 12b-1 under the 1940 Act to compensate the Distributor for distributing those share classes, maintaining accounts and providing shareholder services. Under the Plans, the Fund pays the Distributor an annual asset-based sales charge of 0.75% on Class B and Class C shares’ daily net assets and 0.25% on Class R shares’ daily net assets. The Fund also pays a service fee under the Plans at an annual rate of 0.25% of daily net assets. The Plans continue in effect from year to year only if the Fund’s Board of Trustees votes annually to approve their continuance at an in person meeting called for that purpose. Fees incurred by the Fund under the Plans are detailed in the Statement of Operations.

Sales Charges. Front-end sales charges and 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.

 

Year Ended   

Class A

Front-End
Sales Charges
Retained by
Distributor

     Class A
Contingent
Deferred
Sales Charges
Retained by
Distributor
     Class B
Contingent
Deferred
Sales Charges
Retained by
Distributor
     Class C
Contingent
Deferred
Sales Charges
Retained by
Distributor
     Class R  
Contingent  
Deferred  
Sales Charges  
Retained by  
Distributor  
 

 

 

April 30, 2017

     $261,384        $10,820        $18,185        $25,455        $—    

Waivers and Reimbursements of Expenses. During the period ended April 30, 2017, the Manager voluntarily reimbursed the Fund $12,290 for certain transactions. The payment is reported separately in the Statement of Operations and increased the Fund’s total returns by less than 0.005%.

Effective January 1, 2017, the Transfer Agent has voluntarily agreed to waive fees and/or reimburse Fund expenses in an amount equal to 0.015% of average annual net assets for Classes A, B, C, R and Y.

During the reporting period, the Transfer Agent waived fees and/or reimbursed the Fund for transfer agent and shareholder servicing agent fees as follows:

 

33       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


NOTES TO FINANCIAL STATEMENTS Continued

 

 

 

8. Fees and Other Transactions with Affiliates (Continued)

 

 

Class A    $ 60,802  
Class B      621  
Class C      18,796  
Class R      8,319  
Class Y      35,506  

This fee waiver and/or reimbursement may be terminated at any time.

 

 

9. Borrowings and Other Financing

Joint Credit Facility. A number of mutual funds managed by the Manager participate in a $1.3 billion revolving credit facility (the “Facility”) intended to provide short-term financing, if necessary, subject to certain restrictions in connection with atypical redemption activity. Expenses and fees related to the Facility are paid by the participating funds and are disclosed separately or as other expenses on the Statement of Operations. The Fund did not utilize the Facility during the reporting period.

 

34       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

The Board of Trustees and Shareholders of Oppenheimer International Diversified Fund:

We have audited the accompanying statement of assets and liabilities of Oppenheimer International Diversified Fund, including the statement of investments, as of April 30, 2017, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 2017, by correspondence with the transfer agent. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Oppenheimer International Diversified Fund as of April 30, 2017, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or periods in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.

 

KPMG LLP

Denver, Colorado

June 12, 2017

 

35       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


FEDERAL INCOME TAX INFORMATION Unaudited

 

 

In early 2017, if applicable, shareholders of record received information regarding all dividends and distributions paid to them by the Fund during calendar year 2016.

Dividends, if any, paid by the Fund during the reporting period which are not designated as capital gain distributions should be multiplied by the maximum amount allowable but not less than 1.87% to arrive at the amount eligible for the corporate dividend-received deduction.

A portion, if any, of the dividends paid by the Fund during the reporting period which are not designated as capital gain distributions are eligible for lower individual income tax rates to the extent that the Fund has received qualified dividend income as stipulated by recent tax legislation. The maximum amount allowable but not less than $34,888,466 of the Fund’s fiscal year taxable income may be eligible for the lower individual income tax rates. In early 2017, shareholders of record received information regarding the percentage of distributions that are eligible for lower individual income tax rates.

Recent tax legislation allows a regulated investment company to designate distributions not designated as capital gain distributions, as either interest related dividends or short-term capital gain dividends, both of which are exempt from the U.S. withholding tax applicable to non U.S. taxpayers. For the reporting period, the maximum amount allowable but not less than $167,384 of the ordinary distributions to be paid by the Fund qualifies as an interest related dividend.

The Fund has elected the application of Section 853 of the Internal Revenue Code to permit shareholders to take a federal income tax credit or deduction, at their option, on a per share basis. The maximum amount allowable but not less than $5,411,023 of foreign income taxes were paid by the Fund during the reporting period. A separate notice will be mailed to each shareholder, which will reflect the proportionate share of such foreign taxes which must be treated by shareholders as gross income for federal income tax purposes.

Gross income of the maximum amount allowable but not less than $37,723,292 was derived from sources within foreign countries or possessions of the United States.

The foregoing information is presented to assist shareholders in reporting distributions received from the Fund to the Internal Revenue Service. Because of the complexity of the federal regulations which may affect your individual tax return and the many variations in state and local tax regulations, we recommend that you consult your tax advisor for specific guidance.

 

36       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


PORTFOLIO PROXY VOTING POLICIES AND GUIDELINES;

UPDATES TO STATEMENTS OF INVESTMENTS Unaudited

 

 

The Fund has adopted Portfolio Proxy Voting Policies and Guidelines 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 Guidelines is available (i) without charge, upon request, by calling the Fund toll-free at 1.800.CALL OPP (225.5677), (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.CALL OPP (225.5677), 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 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.

Householding—Delivery of Shareholder Documents

This is to inform you about OppenheimerFunds’ “householding” policy. If more than one member of your household maintains an account in a particular fund, OppenheimerFunds will mail only one copy of the fund’s prospectus (or, if available, the fund’s summary prospectus), annual and semiannual report and privacy policy. The consolidation of these mailings, called householding, benefits your fund through reduced mailing expense, and benefits you by reducing the volume of mail you receive from OppenheimerFunds. Householding does not affect the delivery of your account statements.

Please note that we will continue to household these mailings for as long as you remain an OppenheimerFunds shareholder, unless you request otherwise. If you prefer to receive multiple copies of these materials, please call us at 1.800.CALL-OPP (225-5677). You may also notify us in writing or via email. We will begin sending you individual copies of the prospectus (or, if available, the summary prospectus), reports and privacy policy within 30 days of receiving your request to stop householding.

 

37       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


TRUSTEES AND OFFICERS Unaudited

 

 

 

Name, Position(s) Held with the

Fund, Length of Service, Year of

Birth

  

Principal Occupation(s) During the Past 5 Years; Other Trusteeships/

Directorships Held; Number of Portfolios in the Fund Complex Currently

Overseen

INDEPENDENT TRUSTEES    The address of each Trustee in the chart below is 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Trustee serves for an indefinite term, or until his or her resignation, retirement, death or removal.

Brian F. Wruble,

Chairman of the Board of Trustees (since 2007) and Trustee

(since 2006)

Year of Birth: 1943

   Governor of Community Foundation of the Florida Keys (non-profit) (since July 2012); Director of TCP Capital, Inc. (since November 2015); Chairman Emeritus and Trustee (since August 2011) of The Jackson Laboratory (non-profit); Member of Zurich Insurance Group’s Investment Management Advisory Council (insurance) (October 2004-February 2017); Treasurer (since 2007) and Trustee of the Institute for Advanced Study (non-profit educational institute) (since May 1992); Director of Special Value Opportunities Fund, LLC (registered investment company) (affiliate of the Sub-Adviser’s parent company) (September 2004-June 2015); General Partner of Odyssey Partners, L.P. (hedge fund) (September 1995-December 2007); Special Limited Partner of Odyssey Investment Partners, LLC (private equity investment) (January 1999-September 2004). Oversees 57 portfolios in the OppenheimerFunds complex. Mr. Wruble has served on the Boards of certain Oppenheimer funds since April 2001, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Beth Ann Brown,

Trustee (since 2016)

Year of Birth: 1968

   Advisor, Board of Advisors of Caron Engineering Inc. (since December 2014); Independent Consultant (since September 2012); held the following positions at Columbia Management Investment Advisers LLC: Head of Intermediary Distribution (2008-2012), Managing Director, Strategic Relations (2005-2008), Managing Director, Head of National Accounts (2004-2005); Senior Vice President, National Account Manager (2002-2004), Senior Vice President, Key Account Manager (1999-2002) and Vice President, Key Account Manager (1996-1999) of Liberty Funds Distributor, Inc.; President and Director, of Acton Shapleigh Youth Conservation Corps (non -profit) (2012-2015); and Vice President and Director of Grahamtastic Connection (non -profit) (since May 2013). Oversees 57 portfolios in the OppenheimerFunds complex. Ms. Brown has served on the Boards of certain Oppenheimer funds since January 2016, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Edmund P. Giambastiani, Jr.,

Trustee (since 2013)

Year of Birth: 1948

   Advisory Board Member of the Maxwell School of Citizenship and Public Affairs of Syracuse University (since April 2012); Director of Mercury Defense Systems Inc. (information technology) (August 2011-February 2013); Trustee of the U.S. Naval Academy Foundation Athletic & Scholarship Program (since November 2010); Advisory Board Member of the Massachusetts Institute of Technology Lincoln Laboratory (federally-funded research development center) (since May 2010); Director of The Boeing Company (aerospace and defense) (since October 2009); Trustee of MITRE Corporation (federally-funded research development center) (since September 2008); Independent Director of QinetiQ Group Plc (defense technology and security) (February 2008-August 2011); Chairman of Monster Worldwide, Inc. (on-line career services) (March 2015-November 2016), Director of Monster Worldwide, Inc. (on-line career services) (February 2008-June 2011); Lead Director (June 2011-March 2015); Chairman of Alenia North America, Inc. (military and defense products) (January 2008-October 2009); Director of SRA International,

 

38       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

Edmund P. Giambastiani, Jr.,

Continued

   Inc. (information technology and services) (January 2008-July 2011); President of Giambastiani Group LLC (national security and energy consulting) (since October 2007); United States Navy, career nuclear submarine officer (June 1970-October 2007), Vice Chairman of the Joint Chiefs of Staff (2005-October 2007), Supreme Allied Commander of NATO Commander Transformation (2003-2005), Commander, U.S. Joint Forces Command (2002-2005). Since his retirement from the U.S. Navy in October 2007, Admiral Giambastiani has also served on numerous U.S. Government advisory boards, investigations and task forces for the Secretaries of Defense, State and Interior and the Central Intelligence Agency. He recently completed serving as a federal commissioner on the Military Compensation and Retirement Modernization Commission. Oversees 57 portfolios in the OppenheimerFunds complex. Admiral Giambastiani has served on the Boards of certain Oppenheimer funds since February 2013, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations. For purposes of this report, Admiral Giambastiani is identified as a Trustee.

Elizabeth Krentzman,

Trustee (since 2014)

Year of Birth: 1959

   Director of Cartica Management, LLC Funds (private investment funds) (since 2017); Trustee of University of Florida Law Center Association, Inc. (since 2016); Member of University of Florida Law Advisory Board, Washington, DC Alumni Group (since 2015); Advisory Board Member of the Securities and Exchange Commission Historical Society (since 2007); held the following positions at Deloitte & Touche LLP: Principal and Chief Regulatory Advisor for Asset Management Services (2007 – 2014) and U.S. Mutual Fund Leader (2011 – 2014); General Counsel of the Investment Company Institute (trade association) (June 2004 – April 2007); held the following positions at Deloitte & Touche LLP: National Director of the Investment Management Regulatory Consulting Practice (1997 – 2004), Principal (2003 – 2004), Director (1998 – 2003) and Senior Manager (1997 – 1998); Assistant Director of the Division of Investment Management – Office of Disclosure and Investment Adviser Regulation of the U.S. Securities and Exchange Commission (1996 – 1997) and various positions with the Division of Investment Management – Office of Regulatory Policy (1991 – 1996) of the U.S. Securities and Exchange Commission; Associate at Ropes & Gray LLP (1987 – 1991). Oversees 57 portfolios in the OppenheimerFunds complex. Ms. Krentzman has served on the Boards of certain Oppenheimer funds since August 2014, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Mary F. Miller,

Trustee (since 2006)

Year of Birth: 1942

   Trustee of International House (not-for-profit) (since June 2007); Trustee of the American Symphony Orchestra (not-for-profit) (October 1998-November 2011); and Senior Vice President and General Auditor of American Express Company (financial services company) (July 1998-February 2003). Oversees 57 portfolios in the OppenheimerFunds complex. Ms. Miller has served on the Boards of certain Oppenheimer funds since August 2004, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

 

39       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


TRUSTEES AND OFFICERS Unaudited / Continued

 

Joel W. Motley,

Trustee (since 2006)

Year of Birth: 1952

   Director of Office of Finance Federal Home Loan Bank (since September 2016); Director of Greenwall Foundation (since October 2013); Member of Board and Investment Committee of The Greenwall Foundation (since April 2013); Member of the Vestry of Trinity Wall Street (since April 2012); Director of Southern Africa Legal Services Foundation (since March 2012); Board Member of Pulitzer Center for Crisis Reporting (non-profit journalism) (since March 2011); Managing Director of Public Capital Advisors, LLC (privately-held financial advisor) (since January 2006); Managing Director of Carmona Motley, Inc. (privately-held financial advisor) (since January 2002); Director of Columbia Equity Financial Corp. (privately-held financial advisor) (2002-2007); Managing Director of Carmona Motley Hoffman Inc. (privately-held financial advisor) (January 1998-December 2001); Member of the Finance and Budget Committee of the Council on Foreign Relations, Member of the Investment Committee and Board of Human Rights Watch (since July 2000) and Member of the Investment Committee and Board of Historic Hudson Valley (since February 2010). Oversees 57 portfolios in the OppenheimerFunds complex. Mr. Motley has served on the Boards of certain Oppenheimer funds since October 2002, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

Joanne Pace,

Trustee (since 2013)

Year of Birth: 1958

   Advisory Board Director of Massey Quick and Company, LLC (since October 2014); Board Director of Horizon Blue Cross Blue Shield of New Jersey (since November 2012); Advisory Board Director of The Alberleen Group LLC (since March, 2012); Board Member (since January 2015), Board Member of 100 Women in Hedge Funds (non-profit) (since January 2015); Advisory Council Member of Morgan Stanley Children’s Hospital (non-profit) (since May, 2012); Senior Advisor of SECOR Asset Management, LP (2010-2011); Managing Director and Chief Operating Officer of Morgan Stanley Investment Management (2006-2010); Partner and Chief Operating Officer of FrontPoint Partners, LLC (hedge fund) (2005-2006); held the following positions at Credit Suisse: Managing Director (2003-2005); Global Head of Human Resources and member of Executive Board and Operating Committee (2004-2005), Global Head of Operations and Product Control (2003- 2004); held the following positions at Morgan Stanley: Managing Director (1997- 2003), Controller and Principal Accounting Officer (1999-2003); Chief Financial Officer (temporary assignment) for the Oversight Committee, Long Term Capital Management (1998-1999). Lead Independent Director and Chair of the Audit and Nominating Committee of The Global Chartist Fund, LLC of Oppenheimer Asset Management (2011-2012); Board Director of Managed Funds Association (2008- 2010); Board Director of Morgan Stanley Foundation (2007-2010) and Investment Committee Chair (2008-2010). Oversees 57 portfolios in the OppenheimerFunds complex. Ms. Pace has served on the Boards of certain Oppenheimer funds since November 2012, including as an Advisory Board Member for certain Oppenheimer funds, during which time she has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Board’s deliberations. For purposes of this report, Ms. Pace is identified as a Trustee.

 

40       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

Daniel Vandivort,

Trustee (since 2014)

Year of Birth: 1954

   Treasurer, Chairman of the Audit and Finance Committee (since January 2016); Chairman and Lead Independent Director/Trustee (March 2010-September 2014), Chairman of the Audit Committee (March 2009-September 2014) and Director/ Trustee (December 2008-September 2014) of the Board of Directors/Trustees of Value Line Funds; Trustee, Board of Trustees of Huntington Disease Foundation of America (since January 2015 and June 2007-December 2013); Trustee, Board of Trustees, RIM Retirement Savings Plan (2005-2007); President and Chief Investment Officer, Robeco Investment Management, formerly known as Weiss Peck and Greer (January 2005-June 2007); Member, Management Committee of Robeco Investment Management (2001-2007); Chairman and Trustee of the Board of Trustees of Weiss, Peck and Greer Funds (2004-2005); Managing Director and Head of Fixed Income, Weiss, Peck and Greer (November 1994-January 2005); Managing Director and Head of Fixed Income, CS First Boston Investment Management (January 1992-November 1994); Director, Global Product Development, First Boston Asset Management (November 1989 to January 1992); Vice President, Fixed Income Sales, First Boston Corp. (May 1984-November 1989). Oversees 57 portfolios in the OppenheimerFunds complex. Mr. Vandivort has served on the Boards of certain Oppenheimer funds since 2014, during which time he has become familiar with the Fund’s (and other Oppenheimer funds’) financial, accounting, regulatory and investment matters and has contributed to the Boards’ deliberations.

 

INTERESTED TRUSTEE AND OFFICER    Mr. Steinmetz is an “Interested Trustee” because he is affiliated with the Manager and the Sub-Adviser by virtue of his positions as Chairman of the Sub-Adviser and officer and director of the Manager. Both as a Trustee and as an officer, Mr. Steinmetz serves for an indefinite term, or until his resignation, retirement, death or removal. Mr. Steinmetz’s address is 225 Liberty Street, New York, New York 10281-1008.

Arthur P. Steinmetz,

Trustee (since 2015), President and Principal Executive Officer (since 2014)

Year of Birth: 1958

   Chairman of the Sub-Adviser (since January 2015); CEO and Chairman of the Manager (since July 2014), President of the Manager (since May 2013), a Director of the Manager (since January 2013), Director of the Sub-Adviser (since July 2014), President, Management Director and CEO of Oppenheimer Acquisition Corp. (the Sub-Adviser’s parent holding company) (since July 2014), and President and Director of OFI SteelPath, Inc. (since January 2013). Chief Investment Officer of the OppenheimerFunds advisory entities from (January 2013- December 2013); Executive Vice President of the Manager (January 2013-May 2013); Chief Investment Officer of the Sub-Adviser (October 2010-December 2012); Chief Investment Officer, Fixed-Income, of the Sub-Adviser (April 2009-October 2010); Executive Vice President of the Sub-Adviser (October 2009-December 2012); Director of Fixed Income of the Sub-Adviser (January 2009-April 2009); and a Senior Vice President of the Sub-Adviser (March 1993-September 2009). An officer of 99 portfolios in the OppenheimerFunds complex.

 

OTHER OFFICERS OF THE FUND    The addresses of the Officers in the chart below are as follows: for Mr. Evans, Mss. Lo Bessette, Mss. Foxson and Picciotto, 225 Liberty Street, New York, New York 10281-1008, for Mr. Petersen, 6803 S. Tucson Way, Centennial, Colorado 80112-3924. Each Officer serves for an indefinite term or until his or her resignation, retirement, death or removal.

George R. Evans,

Vice President (since 2005)

Year of Birth: 1959

   CIO Equities of the Sub-Adviser (since January 2013); Director of Equities of the Sub-Adviser (October 2010-December 2012); Senior Vice President of the Sub- Adviser (since July 2004). Director of International Equities of the Sub-Adviser (since July 2004); Vice President of HarbourView Asset Management Corporation (July 1994-November 2001) and Vice President of the Sub-Adviser (October 1993-July 2004). A portfolio manager and officer of other portfolios in the OppenheimerFunds complex.

 

41       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


TRUSTEES AND OFFICERS Unaudited / Continued

 

Cynthia Lo Bessette,

Secretary and Chief Legal Officer (since 2016)

Year of Birth: 1969

   Senior Vice President and Deputy General Counsel (March 2015 to February 2016) and Executive Vice President, General Counsel and Secretary of the Manager (since February 2016); Chief Legal Officer of the Sub-Adviser and the Distributor (since February 2016); Vice President, General Counsel and Secretary of Oppenheimer Acquisition Corp. (since February 2016); General Counsel of OFI SteelPath, Inc., VTL Associates, LLC and Index Management Solutions, LLC (since February 2016); Chief Legal Officer of OFI Global Institutional, Inc., HarbourView Asset Management Corporation, OFI Global Trust Company, Oppenheimer Real Asset Management, Inc., OFI Private Investments Inc., Shareholder Services, Inc. and Trinity Investment Management Corporation (since February 2016); Vice President, Corporate Counsel (February 2012 – March 2015) and Deputy Chief Legal Officer (April 2013 – March 2015) of Jennison Associates LLC; Assistant General Counsel (April 2008 – September 2009) and Deputy General Counsel (October 2009 – February 2012) of Lord Abbett & Co. LLC. An officer of 99 portfolios in the OppenheimerFunds complex.

Jennifer Foxson,

Vice President and Chief Business Officer (since 2014)

Year of Birth: 1969

   Senior Vice President of OppenheimerFunds Distributor, Inc. (since June 2014); Vice President of OppenheimerFunds Distributor, Inc. (April 2006-June 2014); Vice President of the Sub-Adviser (January 1998-March 2006); Assistant Vice President of the Sub-Adviser (October 1991-December 1998). An officer of 99 portfolios in the OppenheimerFunds complex.

Mary Ann Picciotto,

Chief Compliance Officer and Chief Anti-Money Laundering Officer (since 2014)

Year of Birth: 1973

   Senior Vice President and Chief Compliance Officer of the Manager (since March 2014); Chief Compliance Officer of the Sub-Adviser, OFI SteelPath, Inc., OFI Global Trust Company, OFI Global Institutional, Inc., Oppenheimer Real Asset Management, Inc., OFI Private Investments, Inc., Harborview Asset Management Corporation, Trinity Investment Management Corporation, and Shareholder Services, Inc. (since March 2014); Managing Director of Morgan Stanley Investment Management Inc. and certain of its various affiliated entities; Chief Compliance Officer of various Morgan Stanley Funds (May 2010-January 2014); Chief Compliance Officer of Morgan Stanley Investment Management Inc. (April 2007-January 2014). An officer of 99 portfolios in the OppenheimerFunds complex.

Brian S. Petersen,

Treasurer and Principal Financial & Accounting Officer (since 2016)

Year of Birth: 1970

   Senior Vice President of the Manager (since January 2017); Vice President of the Manager (January 2013-January 2017); Vice President of Sub-Adviser (February 2007-December 2012); Assistant Vice President of Sub-Adviser (August 2002- 2007). An officer of 99 portfolios in the OppenheimerFunds complex.

The Fund’s Statement of Additional Information contains additional information about the Fund’s Trustees and Officers is available without charge upon request, by calling 1.800.CALL OPP (225.5677).

 

42       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND

 

Manager    OFI Global Asset Management, Inc.
Sub-Adviser    OppenheimerFunds, Inc.
Distributor    OppenheimerFunds Distributor, Inc.
Transfer and Shareholder Servicing Agent    OFI Global Asset Management, Inc.
Sub-Transfer Agent    Shareholder Services, Inc.
   DBA OppenheimerFunds Services
Independent Registered Public Accounting Firm    KPMG LLP
Legal Counsel    Kramer Levin Naftalis & Frankel LLP

 

 

© 2017 OppenheimerFunds, Inc. All rights reserved.

 

43       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


PRIVACY POLICY NOTICE

 

As an Oppenheimer fund shareholder, you are entitled to know how we protect your personal information and how we limit its disclosure.

Information Sources

We obtain nonpublic personal information about our shareholders from the following sources:

  Applications or other forms
  When you create a user ID and password for online account access
  When you enroll in eDocs DirectSM our electronic document delivery service
  Your transactions with us, our affiliates or others
  Technologies on our website, including: “cookies” and web beacons, which are used to collect data on the pages you visit and the features you use.

If you visit oppenheimerfunds.com and do not log on to the secure account information areas, we do not obtain any personal information about you. When you do log on to a secure area, we do obtain your user ID and password to identify you. We also use this information to provide you with products and services you have requested, to inform you about products and services that you may be interested in and assist you in other ways.

We do not collect personal information through our website unless you willingly provide it to us, either directly by email or in those areas of the website that request information. In order to update your personal information (including your mailing address, email address and phone number) you must first log on and visit your user profile.

If you have set your browser to warn you before accepting cookies, you will receive the warning message with each cookie. You can refuse cookies by turning them off in your browser. However, doing so may limit your access to certain sections of our website.

We use cookies to help us improve and manage our website. For example, cookies help us recognize new versus repeat visitors to the site, track the pages visited, and enable some special features on the website. This data helps us provide a better service for our website visitors.

Protection of Information

We do not disclose any non-public personal information (such as names on a customer list) about current or former customers to anyone, except as permitted by law.

Disclosure of Information

Copies of confirmations, account statements and other documents reporting activity in your fund accounts are made available to your financial advisor (as designated by you). We may also use details about you and your investments to help us, our financial service affiliates, or firms that jointly market their financial products and services with ours, to better serve your investment needs or suggest educational material that may be of interest to you. If this requires us to provide you with an opportunity to “opt in” or “opt out” of such information sharing with a firm not affiliated with us, you will receive notification on how to do so, before any such sharing takes place.

Right of Refusal

We will not disclose your personal information to unaffiliated third parties (except as permitted by law), unless we first offer you a reasonable opportunity to refuse or “opt out” of such disclosure.

 

44       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

Internet Security and Encryption

In general, the email services provided by our website are encrypted and provide a secure and private means of communication with us. To protect your own privacy, confidential and/or personal information should only be communicated via email when you are advised that you are using a secure website. As a security measure, we do not include personal or account information in non-secure emails, and we advise you not to send such information to us in non-secure emails. Instead, you may take advantage of the secure features of our website to encrypt your email correspondence. To do this, you will need to use a browser that supports Secure Sockets Layer (SSL) protocol.

  All transactions, including redemptions, exchanges and purchases, are secured by SSL and 256-bit encryption. SSL is used to establish a secure connection between your PC and OppenheimerFunds’ server. It transmits information in an encrypted and scrambled format.
  Encryption is achieved through an electronic scrambling technology that uses a “key” to code and then decode the data. Encryption acts like the cable converter box you may have on your television set. It scrambles data with a secret code so that no one can make sense of it while it is being transmitted. When the data reaches its destination, the same software unscrambles the data.
  You can exit the secure area by either closing your browser, or for added security, you can use the Log Out button before you close your browser.

Other Security Measures

We maintain physical, electronic and procedural safeguards to protect your personal account information. Our employees and agents have access to that information only so that they may offer you products or provide services, for example, when responding to your account questions.

How You Can Help

You can also do your part to keep your account information private and to prevent unauthorized transactions. If you obtain a user ID and password for your account, safeguard that information. Also, take special precautions when accessing your account on a computer used by others.

Who We Are

This joint notice describes the privacy policies of the Oppenheimer funds, OppenheimerFunds, Inc., each of its investment adviser subsidiaries, OppenheimerFunds Distributor, Inc. and OFI Global Trust Co. It applies to all Oppenheimer fund accounts you presently have, or may open in the future, using your Social Security number—whether or not you remain a shareholder of our funds. This notice was last updated November 2016. In the event it is updated or changed, we will post an updated notice on our website at oppenheimerfunds.com. If you have any questions about this privacy policy, write to us at P.O. Box 5270, Denver, CO 80217-5270, email us by clicking on the Contact Us section of our website at oppenheimerfunds.com or call us at 1.800.CALL OPP (225.5677).

 

45       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


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46       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


    

 

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47       OPPENHEIMER INTERNATIONAL DIVERSIFIED FUND


 

LOGO

Visit us at oppenheimerfunds.com for 24-hr access to account information and transactions or call us at 800.CALL OPP (800.225.5677) for 24-hr automated information and automated transactions. Representatives also available Mon–Fri 8am-8pm ET.

 

Visit Us

 

oppenheimerfunds.com

 

Call Us

 

800 225 5677

    

Follow Us

 

LOGO

    

 

Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc.

225 Liberty Street, New York, NY 10281-1008

© 2017 OppenheimerFunds Distributor, Inc. All rights reserved.

 

RA0195.001.0417 June 12, 2017


Item 2. Code of Ethics.

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions.

Item 3. Audit Committee Financial Expert.

The Board of Trustees of the registrant has determined that Joanne Pace, the Board’s Audit Committee Chairwoman, is an audit committee financial expert and that Ms. Pace is “independent” for purposes of this Item 3.


Item 4. Principal Accountant Fees and Services.

(a)        Audit Fees

The principal accountant for the audit of the registrant’s annual financial statements billed $24,400 in fiscal 2017 and $23,300 in fiscal 2016.

(b)        Audit-Related Fees

The principal accountant for the audit of the registrant’s annual financial statements billed $9,500 in fiscal 2017 and $254 in fiscal 2016.

The principal accountant for the audit of the registrant’s annual financial statements billed $234,635 in fiscal 2017 and $508,990 in fiscal 2016 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

Such services include: Internal control reviews, GIPS attestation procedures, and additional audit services

(c)        Tax Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2017 and no such fees in fiscal 2016.

The principal accountant for the audit of the registrant’s annual financial statements billed $689,805 in fiscal 2017 and $468,498 in fiscal 2016 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.

Such services include: tax compliance, tax planning and tax advice. Tax compliance generally involves preparation of original and amended tax returns, claims for a refund and tax payment-planning services. Tax planning and tax advice includes assistance with tax audits and appeals, tax advice related to mergers and acquisitions and requests for rulings or technical advice from taxing authorities.

(d)        All Other Fees

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2017 and no such fees in fiscal 2016.

The principal accountant for the audit of the registrant’s annual financial statements billed no such fees in fiscal 2017 and no such fees in fiscal 2016 to the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant.


Such fees would include the cost to the principal accountant of attending audit committee meetings and consultations regarding the registrant’s retirement plan with respect to its Trustees.

 

(e) (1) During its regularly scheduled periodic meetings, the registrant’s audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the registrant.

The audit committee has delegated pre-approval authority to its Chairwoman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any fees such pre-approved are presented to the audit committee at its next regularly scheduled meeting.

Under applicable laws, pre-approval of non-audit services may be waived provided that: 1) the aggregate amount of all such services provided constitutes no more than five percent of the total amount of fees paid by the registrant to its principal accountant during the fiscal year in which services are provided 2) such services were not recognized by the registrant at the time of engagement as non-audit services and 3) such services are promptly brought to the attention of the audit committee of the registrant and approved prior to the completion of the audit.

(2) 0%

 

(f) Not applicable as less than 50%.

 

(g) The principal accountant for the audit of the registrant’s annual financial statements billed $933,940 in fiscal 2017 and $977,742 in fiscal 2016 to the registrant and the registrant’s investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant related to non-audit fees. Those billings did not include any prohibited non-audit services as defined by the Securities Exchange Act of 1934.

 

(h) The registrant’s audit committee of the board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. No such services were rendered.

Item 5. Audit Committee of Listed Registrants

Not applicable.


Item 6. Schedule of Investments.

a) Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.

b) 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

None

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 4/30/2017, 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) Exhibit attached hereto.

(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 Diversified Fund

 

By:  

/s/ Arthur P. Steinmetz

  Arthur P. Steinmetz
  Principal Executive Officer

Date:

  6/16/2017

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/ Arthur P. Steinmetz

    Arthur P. Steinmetz
    Principal Executive Officer

Date:

    6/16/2017
By:    

/s/ Brian S. Petersen

    Brian S. Petersen
    Principal Financial Officer

Date:

    6/16/2017